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Russian President Vladimir Putin has implemented a series of countermeasures to strengthen domestic support and mitigate the negative effects of Western isolation following the invasion of Ukraine. Putin has managed to prompt an array of companies to leave Russia, responding by managing the exit process to his country’s benefit. This exit restrictions have forced companies from “unfriendly nations” to gain approval to sell their businesses in Russia, which has resulted in companies and their property being bought by Russian companies at a substantial discount. However, this mass departure has still hurt Russia by signaling to the world that it is a business pariah.

Putin has remained defiant in the face of these departures, saying, “Russian companies took over and moved on.” He has implemented strategic financial moves to keep the Russian economy alive despite Western economic pressure. Businesses and international corporations leaving Russia have sent a strong signal to the rest of the world that Russia is a dangerous place to do business, damaging the economy in the long term. The Kremlin has taken control of several companies that have left, with at least four of them being effectively seized by the state.

Putin has interfered in the exit process to Russia’s advantage, refusing to let the flow of money out of the country to cripple the economy. He has signaled that his priority is keeping companies in Russia rather than making deals outside. The article recounts the example of a German hardware store chain that attempted to close its doors in Russia, prompting a response from the Russian authorities demanding continuation of business operations. The company eventually sold its Russian business for the symbolic price of a few dollars and the ownership changed hands multiple times, landing with figures with ties to the Kremlin.

While the full extent of the impact of the mass departure of companies from Russia is yet to be seen, it has obvious and complex implications for the business environment in the country. This article details the reactive measures Putin has taken in response to economic pressure from Western countries due to the war in Ukraine, including dictating business deals and replacements after companies have left. These changes have far-reaching and potentially long-term consequences for the Russian economy and its reputation as a place to do business.

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