Only 7.8% of foreign companies finally left Russian market – KSE study

If we look at the period since the full-scale invasion started in February, we can see that the number of companies shutting down their operations in Russia was increasing until spring 2022. However, in the last 11 months, there hasn't been much change in the proportion of companies deciding to leave or stay, say the Kyiv School of Economics experts. 

The KSE Institute has been monitoring and studying how the departure of foreign businesses is affecting the Russian economy as part of the "Self-sanctions/LeaveRussia" project. Experts report that, as of today, a total of 265 international companies have completely ceased operations in Russia. It is 7.8% of the total number of entries in the KSE database or 17.8% of companies that received income in Russia in 2022. Also, 1,223 (36.1% of the total) foreign businesses closed operations and announced their intention to leave the country.

However, 1,377 (40.7% of the total number) of the companies monitored by the KSE Institute are not yet going to leave the Russian market, working without any changes. Another 519 (15.3% of the total) foreign businesses have suspended new investments in Russia and are still waiting.

At the same time, in early August, Putin signed a number of laws, including:

• blocking the funds of foreign companies that are under sanctions of the Russian Federation,
• establishing a 10% tax on excess profits for large companies,
• simplifying the transfer of economically significant companies under the jurisdiction of Russia.

According to monitoring data, 265 international companies that completely left the Russian market provided at least 424,400 jobs in 2021. Their annual revenue was $63.4 billion. The capital was estimated at $33.2 billion, while the value of the assets of these companies reached $59.7 billion.

The international companies that announced their complete exit from Russia had:

• 293,200 personnel,
• $56.8 billion in annual revenue,
• $23.3 billion of capital,
• $28 billion in assets.

Foreign businesses that suspended their activities on the Russian market had:

• 103,800 personnel,
• annual revenue of $29.6 billion,
• $37.9 billion of capital,
• $99.6 billion in assets.

The research was prepared by the KSE Institute team and members of the KSE Board of Directors with the support of the International Renaissance Foundation during 31.07-13.08.2023.

In July 2023 KSE Institute identified eight more foreign companies that left the Russian market, and their total number since the beginning of the full-scale invasion has already reached 262.

As Rubryka reported, the National Agency for Corruption Prevention (NACP) has created a database that will help track violations of anti-Russian sanctions in operations on the art market.