The term repatriation is widely used in the world of politics and business. In what terms and for what purpose does this occur most often?
The meaning of the word "repatriation"
In a general sense, “repatriation” is the return of someone or the return of something from another country to their homeland. It can be, for example, citizens who come to the state in which they were born and grew up, from abroad, where for some reason they lived for a long time. As a rule, this kind of repatriation is characteristic of people returning to their ethnic homeland. At the level of international law, this phenomenon was recorded at the Geneva Convention in 1949.
It addressed issues of repatriation in peacetime - as opposed to the practice of moving citizens between countries during the recent military operations relative to that time. There are other interpretations of the term. These include, for example, the repatriation of capital: when the money earned by a person abroad returns to his homeland. This term may also be associated with the sphere of culture and art. In this case, those or other values located abroad are returned to the country of historical origin.
Civil Repatriation: World Experience
People returning after a long life abroad are called repatriates. In different states, the practice of government interaction with these individuals may have national characteristics. In some countries, returnees are in the status of immigrants with the right to temporary residence. In others, people returning from abroad will soon receive citizenship. There are countries with a very large proportion of such individuals. In Israel, for example, a fifth of the population are returnees.
Among the states devoting to the problem of returning indigenous people or former citizens to their homeland are Russia, Armenia, Greece, Germany, Hungary, and the Baltic countries. Returnees in these countries are guaranteed a wide range of civil rights. According to some experts, the return of people to their historical homeland is an extremely positive phenomenon. Largely because the country's demographic and labor resources are replenished. Repatriation is good for the country, based on this point of view.
When capitals flow home
There are many interpretations that determine what repatriation of funds is. This may be, as some experts believe, a deliberate attempt by the state to return previously illegally exported capital. Thus, in this vein, the term in question is an element of national monetary regulation. Managing the repatriation of money helps the government and the Central Bank of the country control inflation, the national currency, and ensure the quality of financial settlements in the economy. Some states specialize in the export of capital, and repatriation will also be an integral part of their work, which allows them to improve national indicators of the balance of payments and foreign exchange processes. In the process of cross-border movement of money, as a rule, not only countries that are the birthplace of the owner of capital, but also the state from which the funds are taken out, are involved. Currency flows may be subject to special taxes. There are many legal subtleties when making cross-border payments through repatriation channels.
The goals pursued by states in the repatriation of money
Any interstate financial movement, including such a phenomenon as the repatriation of foreign exchange earnings, is an instrument of a national strategy for economic development. As mentioned above, there are countries exporting capital. There are also importing states of currency. Their policy most often depends on the real state of affairs in the economy: with normal, stable development, restrictions on the import and export of capital are weakened, but when a crisis occurs, the flow of cash flows can be strictly limited. Especially when it comes to the repatriation of money invested in the economy of such countries. Regulation of the movement of capital can be carried out in the interests of national monopolies, as well as with the aim of adjusting economic macro indicators. The state may give additional guarantees in case of cross-border movement of finances on its behalf, provide insurance protection for foreign capital in the presence of political risks.
Stock exchange - accumulator of capital repatriation
A special case of the repatriation of capital is the return to the homeland of the profit received from investments abroad. In a modern interstate economic partnership, this procedure is most often associated with the stock market. National funds, where trade is conducted, as a rule, form the bulk of capital by attracting money from foreign investors. As such, profit is repatriated at the time of the sale of the shares.
The investor exchanges them for money that he can cash in his country, and thus leaves the market where the trade is conducted. Of course, due to the minimum restrictions on the international purchase and sale of shares, such cycles can be carried out several times a day - that's why the stock market was created. But from a formal point of view, the withdrawal of profits received by foreigners during trading on the RTS or MICEX is full repatriation. This allows us to talk about interest in the positive dynamics of investment by the government.
Return to the homeland of cultural property
In countries with a rich national culture, remarkable examples of folk art, as well as objects of art obtained in the course of international exchange, appear. For various reasons, all of these values may be overseas. Most often this is due to military operations or liberties under colonial policy in imperial times. Today, the states in which cultural values were created that have appeared in other countries are actively working to return the national heritage to their homeland.
Their goal is the repatriation of cultural property. The largest conferences are held on issues related to the practice of partnership between different countries on this issue. Particularly active are states with a history rooted in antiquity: Egypt, Greece, Libya. Do not stand aside the countries of Africa and Latin America. The main difficulty of the negotiations is that the states where cultural values are located now do not always recognize the legitimacy of certain requirements on the part of the international community.
To the Homeland, to Russia
The Russian Federation historically belongs to the countries most actively involved in migration processes. Some citizens of the Russian Federation leave for various reasons, while others return no less actively. This phenomenon could not remain without the attention of the authorities that issued the law “On Repatriation to Russia”. In accordance with this act, the right to return to the Russian Federation and obtain citizenship are born in the country of Russians, Ukrainians, Belarusians and representatives of other nationalities belonging to the indigenous.
People who come to Russia receive material support and other forms of assistance from the government. Assistance can be provided both free of charge and in the form of a loan. Work with people returning to their homeland is carried out at the level of federal authorities. Thus, repatriation to Russia is an element of state policy.
Why did the Russians leave their homeland?
Repatriates seeking to return to the Russian Federation as their historical homeland, as a rule, are representatives of one of the four groups of emigrants. The first includes Russians who left the country after the 1917 Revolution, the second - those who left their homeland after the Second World War, the third - citizens who expressed a desire to go abroad for permanent residence in the middle of the 20th century (mainly in the 70s years). Finally, a large-scale wave of emigration covered the Russian Federation after the collapse of the USSR.
Some historians believe that in each of the noted periods, the mass departure of citizens abroad is caused not so much by the personal will of the people as by the realities of the social and political life and the state of the country's economy. Some experts note: it is very good that the program for the repatriation of people born in Russia exists at the level of federal law - by this the state shows its willingness to give the opportunity for once-gone Russians to feel like full citizens.
Business Abroad: The Subtleties of Cash Settlement
The repatriation of capital directly relates to residents of the Russian Federation conducting foreign trade activities. In relation to them, there is an obligation enshrined in the laws: to ensure that money is received from foreign entities (non-residents) for goods and services to accounts in authorized banks. Also, residents ’money should be returned to Russia if the foreign partner received an advance payment, but did not deliver their own goods or services to the Russian Federation. The exception (when you do not need to make any refunds to Russia, that is, to repatriate) includes cases when relations with foreign partners are based on the fulfillment of certain types of credit (debt) obligations.
Taxation of repatriated capital
In some countries, there is such a thing as a tax on the repatriation of income of non-residents. It is charged directly from the source upon the actual withdrawal of money abroad. Payment of this tax is made by an entity that transfers a particular type of income to a non-resident: interest, royalties, dividends. As a rule, this type of fees applies only to passive income.
Some jurisdictions provide for special tax deductions for payments of repatriation fees. For example, if a citizen doing business abroad paid these taxes to a foreign treasury, then he is entitled to compensation in the process of calculating fees to the treasury of his state (or a reduction in the amounts calculated).
Repatriation tax rate
It is worth noting that no universal international rules governing the payment of tax on the repatriation of income (or determining its size) have been adopted at the moment. Moreover, within each individual country there may exist a very complex system of calculating the amounts of fees to the treasury on this basis. In Ukraine, for example, the size of the fee depends on the jurisdiction where the investor comes from. Let's say for Cyprus this figure is zero. In turn, for some EU countries, the repatriation tax may be 10% or higher. A lot depends on the percentage of ownership of the shares of a subsidiary registered in Ukraine, on the investment conditions.