- Western companies may consider a return to Russia after the war, but Moscow does not seem very thirsty.
- Foreign firms left Russia because of its sanctions on its occupation in Ukraine, affecting the economy.
- Russian officials say the country is prioritizing local companies to return Western firms.
Some of the Western companies that left Russia during its war in Ukraine may be tempted to return when the war ends – but Moscow wants them to know that it is not in a hurry to get them.
“We are not waiting for anyone with open wings. There will be a price to pay past decisions,” Anton Alikhanov, the Russian industry and the Minister of Trade, said on Thursday, according to TASS State news agency.
Three years in the war in Ukraine, about 475 foreign companies have completely removed from the Russian market, according to Russia’s Russia database from the Kyiv School. Those who have made a full exit include McDonald’s, Starbucks, Ikea, British Energy Giant and Japanese Bridgetone tire manufacturer.
Alikhanov said Russia is giving preference to local brands instead of waiting for foreign brands to return.
His comments come as US President Donald Trump has signaled a willingness for the US to agree with Moscow, sparking discussions about the return of some removed companies.
“It is a reasonable assumption that some companies will seek to return to Russia after a comprehensive solution to end the war,” Andrew Staples, Geopol Asia, told a business strategy and geopolitical counseling, he said Business Insider.
Denis Manturov, Russia’s First Deputy Prime Minister, echoed the country’s emphasis on local companies and those from Eurasian Economic Union-a group of five post-Soviet states for the bowl.
“We will cleanse for our market those of interest to ourselves,” Manev said on Thursday.
Foreign firms are probably not rushing back to Russia
International companies may not compete, wrote Edward Verona, a former Moscow -based business executive in the 1990s and 2000s.
“To use another chance for Russia may seem attractive to some. After all, memories can be short in the business world,” wrote on Thursday Verona, who is now an elderly co -worker in the center of Eurasia of the Atlantic Council on Thursday.
Good deals may not be enough to seduce Western companies still worried about non-Russian staff security and the rule of law, he said.
“US firms may feel less restrained to return than European firms given the geographical and political distance involved,” Staples said.
Even if the sanctions were to be removed, he said it is difficult to imagine countries closer to conflict – such as Poland, Baltic states, Scandinavia, Germany, France and the United Kingdom – to be included again.
Staples said that companies and consumer goods companies operating in less sensitive sectors are more likely to return to the market than those in strategic sectors such as energy, technology, banks, finances, airspace and protection.
Companies seeking to maintain their reputation and who leave Russia for moral reasons are unlikely to return to the foreseeable future, wrote Verona, who is a former head of the US-Russian Business Council.
War -time economy in Russia
Even if companies are seduced from the perspective of a return to the Russian market, the basic question is whether it’s worth trying.
“Perhaps most importantly, from the business point of view, the perspective of the economy is not great,” Staples said, citing challenges including high inflation and a close monetary policy.
The Russian economy has mainly held Western sanctions mainly for three years – at least on paper – as its leaders focused on defense production, increasing military spending to calculate 8% of its GDP in 2025.
The ruble crashed into a two -year low of $ 113.72 against the dollar in early January while Europe’s progressive breakdown with Russian energy paved the way for another installment of US sanctions. This last measure, one of the final movements of the Biden administration, blocks Russia’s third largest bank from the treatment of many energy -related payments.
However, a new wave of optimism has then extinguished the ruble to a high six months, at 88.67 against the dollar on Thursday.
Ruble has strengthened about 14% since Trump took office on January 20th.
Meanwhile, some of the Russian firms – even those outside the army – are going well. Yandex, an online company operating one of Russia’s largest research engines, posted an annual income of $ 11.22 billion on Thursday, raising 37% year by year.
Yandex’s net income fell 78% from 2023 to $ 129 million, as interest and operating expenses increased. Russia increased interest rates to 21% last year to try to cool the growing inflation.
Yandex was separated from his Dutch residence in July after a two-year negotiation that ended with local buyers by acquiring her Russian-based assets.
But other sectors, such as its agriculture, automobiles and commodity industries, have shown signs of war.
In particular, Europe has found new sources of energy to seek Russia, once its largest energy provider. Energy is about one-fifth of Russia’s GDP.
Meanwhile, demand from China is slow between its economic downturn, and Trump is pressuring other countries to buy more American energy – more competition for Russia’s exports.
“Given this economic appreciation and constant political risk and reputation of being in Russia, is it an attractive place for foreign firms?
Business risks in Putin’s Russia
Even if the numbers work, there are political risks related to operation in Russia where President Vladimir Putin – which is in office for a fifth term – has an iron rule.
Verona Eurasia Center wrote that Russia is far from the same country separated from the West under the leadership of Boris Yeltsin 1991 to 1999.
“It is not even Russia of the early 2000s, before Vladimir Putin had fully consolidated his power control and end the move from the new democracy to the authoritarian regime,” Verona added. “After twenty -five years of Putin’s rule, the Kremlin now prevails in all aspects of Russian life, including the country’s business climate.”