Kremlin woos western companies to return to Russia, 28 February 2025

Not long after the US and Russia sat down for their first high-level talks since Moscow’s full-scale invasion of Ukraine, one of the US’s biggest multinationals received a call.

The Russian government was planning a meeting to discuss the path for western companies to re-enter the country. Would this particular multinational, the Russian government official on the phone asked, be interested in bringing back some of its brands?...

The same day, Putin said Russia was ready to co-operate with the US extracting minerals from Russian-occupied areas of Ukraine, and that American companies could make “good money” from aluminium extraction in Russia.

...[S]ince Trump’s election, Moscow has been planting the seeds for a return of foreign businesses, even as some Kremlin-friendly voices lambast such companies for leaving and claim there may be no space left for them in the market.

David Lorello, a partner at Covington & Burling, said the Kremlin was “pitching to the United States the economic opportunities of a resolution to the war”.

Any returning companies would face formidable obstacles including emboldened local competition and an uncertain legal environment in a country that remains at war and targeted by comprehensive sanctions.

Yet few western multinationals are looking to rule out a return; many want to hold on to buyback options for their Russian businesses...

Kirill Dmitriev, Russia’s newly appointed special envoy for foreign economic co-operation, has claimed that US companies lost $324bn as a result of pulling out — a number disputed by the KSE — and has said US companies that left could start returning within months.

According to KSE estimates seen by the Financial Times, foreign companies have suffered at least $167bn in direct losses over three years of the full-scale war, including write-offs and court rulings that resulted in partial seizures.

More than $4bn of assets of American companies were seized, including those of ExxonMobil, JPMorgan and Universal Beverages, with US groups accounting for about a third of western companies’ overall losses...

Despite this backdrop, people working with companies that left Russia said that since Washington and Moscow held talks in Saudi Arabia this month, they had seen increasing interest in returning — particularly from the US.

“I wouldn’t say there is an avalanche, but there are a lot of companies dipping their toe in the water to see what the temperature is,” said one western executive in Moscow.

...Kremlin-friendly media outlets and Telegram channels have claimed that big-name brands ranging from fashion chains Zara and Uniqlo to Coca-Cola, Visa and Mastercard were actively examining a return...

In Moscow, Putin has ordered his cabinet to prepare for the return of western companies, albeit with conditions favouring local players. The finance ministry has suggested that returning companies from so-called unfriendly countries would need approval from the government’s commission on foreign investment...

Western market participants in contact with Russian officials said they expected companies that “left and gave the middle finger” — as one of US executive put it — would have a harder time coming back than those that left quietly.

They said the road to return was likely to be easier for US companies as their government pursues rapprochement with Russia. One European executive in Moscow expressed concern about the “danger and risk for a level playing field”, while other market participants seized on comments by Dmitriev suggesting that US companies could replace European players in Russia’s market economy...