The number of Russian companies with China and former Soviet Union countries as partners is rapidly increasing.

• Approximately 10,000 companies with foreign involvement withdrew from Russia in 2022 and the first 10 months of 2023.
• However, the number of Russian companies in which China and the former Soviet Union countries are co-owners is rapidly increasing.
• Russia is targeting new markets in the east following sweeping Western sanctions over its aggression.

Western companies have been leaving Russia in droves since Moscow invaded Ukraine nearly two years ago, but startups from alternative markets are taking their place.

A total of 9,600 foreign companies withdrew from Russia in 2022 and the first 10 months of 2023, Vedomosti Business Daily reported on Thursday, citing a review of official data from the SPARK-Interfax specialized information service. Reported.

However, the number of Russian startups with co-founders from former Soviet Union countries and China is Prices have skyrocketed over the past two years, Vedomosti said.

According to Vedomosti, companies with co-founders from former Soviet Union countries, including Belarus, Kyrgyzstan and Kazakhstan, accounted for 59% of all new companies that set up operations in Russia last year. Companies with co-founders from Turkey and India accounted for 3% and 2% of new company registrations during the same period, respectively.

In the first 10 months of 2023, 25% (1,500 companies) of new companies founded in Russia had co-founders from China.

However, new entrants do not appear to fully compensate for the number of exits.

According to Vedomosti, as of the end of 2023, a total of 116,400 legal entities with foreign involvement were registered in Russia, compared to the peak of 185,000 foreign-affiliated companies recorded in 2017. This has decreased by more than one-third.

Mikhail Nikolayev, head of Russian ratings agency ACRA, told Russian media that Western sanctions are hurting the number of foreign companies in Russia, while the realignment of Russia’s trade and supply chains to the east is He said this is contributing to an increase in new company registrations from alternative markets. To the translation of the Moscow Times.

Meanwhile, Russian companies abroad are also moving assets into the country amid Western sanctions and pressure from President Vladimir Putin’s government.

Despite tensions between Russia and the West over the Ukraine war, about 3% of companies registered in Russia last year were from countries the Kremlin deemed “unfriendly” – meaning the Kremlin was not willing to invade Ukraine. This led to the imposition of sanctions on Russia. Analysis of SPARK-Interfax. This still represents a significant decrease from his 14% of new companies registered in 2021.

The review by SPARK-Interfax comes nearly two years after Russia’s invasion of Ukraine prompted initial pledges from a number of international companies to exit the market.

But Russia is making it increasingly difficult for foreign companies to leave.

The process has a series of high hurdles, including requiring companies to pay donations to the state. Sell ​​your assets at a deep discount before leaving the country.

Companies operating in strategically important sectors such as energy and resources also need Putin’s approval before selling assets.

Overall, this means that many promises made by Western countries have not been fulfilled.

Only about 350 international companies have completed their withdrawal from Russia. Kyiv Economic School is shown. A further 1,606 international companies continue to operate as usual, while 1,741 foreign companies have suspended their investments or operations in Russia at various stages.