- Western companies may be considering a return to Russia post-war, but Moscow doesn’t appear too keen.
- Foreign firms left Russia due to sanctions over its Ukraine invasion, impacting the economy.
- Russian officials say the country is prioritizing domestic companies over returning Western firms.
Some of the Western companies that left Russia over its war in Ukraine may be tempted to head back when the war ends — but Moscow wants them to know it’s is not in a rush to receive them.
“We are not waiting for anyone with open arms. There will be a price to pay for past decisions,” Anton Alikhanov, the Russian industry and trade minister, told reporters on Thursday, according to TASS state news agency.
Three years into the war in Ukraine, nearly 475 foreign companies have left the Russian market completely, according to the Leave Russia database from the Kyiv School of Economics. Those that have made a complete exit include McDonald’s, Starbucks, Ikea, British energy giant Shell, and Japanese tire maker Bridgestone.
Alikhanov said Russia is prioritizing domestic 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 reconcile with Moscow, igniting discussions about the return of some departed companies.
"It is a reasonable assumption that some companies will seek to return to Russia following a comprehensive settlement to end the war," Andrew Staples, the principal of GeoPol Asia, a business strategy and geopolitical risk consultancy, told Business Insider.
Denis Manturov, the first deputy prime minister of Russia, echoed the country's emphasis on domestic companies and those from the Eurasian Economic Union — a group of five post-Soviet states— per TASS.
"We will clear for our market the ones of interest for ourselves," Manturov said on Thursday.
Foreign firms are probably not rushing back to Russia either
International companies may not race back, wrote Edward Verona, a former business executive who was based in Moscow in the 1990s and 2000s.
"Taking another chance on Russia might seem appealing to some. After all, memories can be short in the business world," Verona, who is now a nonresident senior fellow at the Atlantic Council's Eurasia Center, wrote on Thursday.
Good deals may not be enough to lure back Western companies still concerned about the safety of non-Russian staff 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 sanctions were to be lifted, he said it's hard to imagine countries closer to the conflict — such as Poland, the Baltic states, Scandinavia, Germany, France, and the UK — get involved again.
Staples said consumer goods companies and firms operating in less sensitive sectors are more likely to return to the market than those in strategic sectors like energy, tech, banking, finance, aerospace, and defense.
Companies seeking to safeguard their reputations and who left Russia for moral reasons are also unlikely to return in the foreseeable future, wrote Verona, who is a former head of the US-Russia Business Council.
Russia's wartime economy
Even if companies are enticed by the prospect of a return to the Russian market, the fundamental question is whether it's worth the effort.
"Perhaps most importantly, from a business perspective, the outlook for the economy is not great," Staples said, citing challenges including high inflation and a tight monetary policy.
The Russian economy has largely held out from three years of Western sanctions — at least on paper — as its leaders focused on defense manufacturing, ramping up military spending to account for 8% of its GDP in 2025.
The ruble slumped to a two-year low of 113.72 against the dollar in early January as Europe's progressive decoupling with Russian energy opened the way for another tranche of US sanctions. That latest measure, one of the Biden administration's final moves, blocks Russia's third-largest bank from handling many energy-related payments.
Still, a new wave of optimism has since buoyed the ruble to a six-month high, at 88.67 against the dollar on Thursday.
The ruble has strengthened about 14% since Trump took office on January 20.
Meanwhile, some of Russia's firms — even those outside the military — are doing well. Yandex, an internet company that operates one of Russia's largest search engines, posted record annual revenues of $11.22 billion on Thursday, surging 37% year-on-year.
Yandex's net income slumped 78% from 2023, to $129 million, as interest and operating expenses increased. Russia hiked interest rates to 21% last year to try to cool surging inflation.
Yandex split from its Dutch-domiciled ownership in July after a two-year negotiation that ended with local buyers acquiring its Russia-based assets.
But other sectors, such as its agriculture, automotive, and commodity industries, have showed signs of struggle.
In particular, Europe has found new sources of energy to supplant Russia, once its largest energy provider. Energy accounts for about one-fifth of Russia's GDP.
Meanwhile, demand from China is sluggish amid its economic downturn, and Trump is pressing other countries to buy more US energy — more competition for Russia's exports.
"Given this economic assessment and continued political and reputational risk of being in Russia, is it an attractive place for foreign firms? I wouldn't anticipate a 'rush to get back to Russia,'" said Staples.
Business risks in Putin's Russia
Even if the numbers work out, there are political risks associated with operating in Russia where President Vladimir Putin — who is in office for a fifth term — has an ironclad rule.
Eurasia Center's Verona wrote that Russia is far from the same Western-partnered country it was under Boris Yeltsin's 1991 to 1999 leadership.
"It is not even the Russia of the early 2000s, before Vladimir Putin had fully consolidated his grip on power and completed the transition from fledgling democracy to authoritarian regime," Verona added. "After twenty-five years of Putin's rule, the Kremlin now dominates all aspects of Russian life, including the country's business climate."