It is not a simple decision of whether to stay or leave Russia. Many companies that have business interests in Russia are finding that factors such as finances, geopolitics, and local banking laws may be dissuading them from doing so. Companies must consider numerous elements before deciding to stay or leave.
Financially, companies must be sure they can make up the potential losses in Russia if they were to pull out of the country. For example, many companies have infrastructure investments that would cost more to move or replace than the profits they could gain elsewhere. Additionally, governments may offer incentives to stay in Russia or maintain the status quo, such as tax subsidies.
Geopolitics is a key factor in the decision as to whether to stay or leave Russia. Many companies do business in Russia because of the country’s proximity to other key markets, such as Europe and Asia. Additionally, Russia’s vast natural resources make it a key player in global energy markets and manufacturing. For some companies, maintaining its ties to Russia helps keep access to those markets intact.
Finally, local banking laws in Russia may dissuade certain companies from leaving. Russian laws place restrictions on foreign currency transactions and foreign ownership of certain types of shares. This may make it difficult for companies to transfer their assets out of the country, or to receive money for those assets in the first place.
All in all, companies must weigh many factors when deciding to stay or leave Russia. Financial, geopolitical, and legal considerations all play major roles in the decision-making process. Companies need to be sure they have a prudent plan in place before making the difficult decision of whether to stay or leave.