Russians abroad: business and emigration

After the conflict in Ukraine began and mobilisation was announced, many Russian residents left the country. Some of them decided to start a business in their new place. Eurasia.sk spoke to migrants from Russia about how difficult it is in today’s geopolitical realities to do what you love to do outside your home country.

Business of Russians in figures

CIS countries

Even though we live in the digital age, when everything is tracked and recorded, we still do not know exactly how many Russians left the country after the outbreak of hostilities in Ukraine and the announcement of “partial” mobilisation: estimates range from 500,000 to 1 million. Many of the emigrants, when fears of a new wave of mobilisation began to fade and a sense of a new status quo came, began to return, facing many restrictions abroad and even, as Russians interviewed told Bloomberg, cases of discrimination.

At the same time, some Russians stayed abroad and started their own businesses. Forbes with reference to the calculations of the company “Finion” writes that by the end of 2023, the total number of new companies registered by Russians in Georgia was at least 13,000 entities. In total, from February 2022 to February 2023, about 16,000 IEs were registered for Russian citizens. For comparison, from January 1995 to February 2022, only 7,788 companies were founded in Georgia by Russians.

Kazakhstan ranks second among the countries where Russians were most active in doing business – 6,100 new companies with Russian owners were registered there. A year earlier, about 3,500 companies were opened in this country by natives of Russia.

The third place is Armenia, where in 2023 the number of companies opened by Russians totalled 3,400, including about 2,000 IEs.

The list of countries with the highest business activity of Russians is quite natural: it was the countries of the former Soviet Union that received the main flow of migrants from Russia after the start of the conflict in Ukraine and mobilisation, as no visas are required to enter them (in Armenia you can even enter with an internal passport), the inhabitants of these countries mostly speak Russian, it was possible to open accounts in local banks, and in some cases to pay with Russian cards, but the situation began to change after the tightening of sanctions. 

“An individual entrepreneur (IE) can pay only 1 per cent income tax, and the owner of an LLC may not register as a VAT payer until a turnover of 100,000 GEL (about 3.32 million rubles) is reached. In addition, in Georgia, Russians and Belarusians can legally open bank accounts, including for business activities,” the expert explains in a commentary for Forbes.

Far Abroad

In addition to the former Soviet Union countries, Russians have opened businesses in more distant places: Serbia, the UAE and Turkey.

A more recent study by Finion states that approximately 1,600 branches of Russian companies opened in the UAE over 2022 and 2023. For Russians, the country has become attractive as many natives of Russia have started to live there in recent years, meaning the audience for goods and services is growing. Experts note that owners of beauty salons, coffee shops and restaurants come to the UAE.

Another point of attraction is Serbia. In it for 2022-2023 Russian citizens registered about 9 thousand new organisations, the study notes. Mostly Russians opened kindergartens, online shops, real estate companies and co-working spaces, as well as firms specialising in legal advice and business consulting.

The attractiveness of Serbia lies in the fact that it is quite easy for a Russian citizen to legalise there, including obtaining a residence permit when opening a sole proprietorship. At the same time, the country continues to become more open for those wishing to move there: in the summer of 2023 it became known that the country will simplify obtaining citizenship and increase the term of residence permit. According to the law approved by the Parliament, the duration of the residence permit will increase from one year to three years, after which foreigners can immediately apply for residence permit and citizenship. Also, residence permits and work permits will now be issued simultaneously.

Soon after the war started, Turkey became one of the most popular countries for Russians. As noted in the local newspaper Turkish Minute, Russian citizens from February 2022 to August 2023 opened about 2 thousand companies, mainly in the field of catering. However, in recent months it has become increasingly difficult for Russian citizens to do business and simply live in Turkey: in February 2024, it became known that Russian businessmen are massively unableto make their payments through Turkish banks, as they are afraid of falling under secondary U.S. sanctions, and one of the largest banks in Turkey – DenizBank – since the beginning of 2024 significantly tightened the conditions for opening accounts for Russians and almost stopped approving such applications. A little earlier Turkey tightened the requirements for residence permits when buying property

Personal experience of Russians in Europe

We decided to speak directly with some Russian emigrants to find out more about how difficult or, on the contrary, easy it was for them or their relatives to start their own business abroad in the conditions of ongoing sanctions pressure on Russia and Russians.

Alexei, an IT specialist working in Cyprus, was lucky enough to largely avoid all the bureaucratic complexities that foreigners usually face when moving to the island.

“The main part of the bureaucratic burden was borne by my company: through them I applied for a residence permit and through them I opened a bank account in a local bank. I had to wait a month for the bank card and a couple of weeks for the account. Everything was done through the company: you had to come to a particular branch of a particular bank. Now I will also be extending my residence permit through the company,” says Alexei.

People from Russia, working for companies located in Cyprus, are divided into three camps: the first consists of those who like the island and are already preparing to become citizens of Cyprus, the second camp is those who do not like the island at all (Alexey includes himself among them), but the work in the company suits them, and the third camp – people who could not adapt to life in Cyprus, so they quit and left. Judging by the stories, there are quite a lot of such people.

According to the interlocutor, the residence permit of company employees does not allow them to do business in Cyprus (visa type E), and as soon as the employment contract with the employing organisation is suspended, the residence permit “burns out”. Therefore, as Alexei shares, there are Russians who open a business and do not register it.

That’s what Anna did as well. After the beginning of the war in Ukraine she moved to Serbia, she liked the city and the girl, having no relevant experience before, together with her friend opened a studio of stretching in Belgrade – a place where visitors get acquainted with a set of exercises aimed at developing flexibility, joint mobility and muscle elasticity. Since then, her friend has retired from the business and the studio has grown almost fourfold.

“To be honest, we continue to operate without business registration. Taxes are too high for a business from scratch, transactions for card payments are taxed at 4%. Plus, when you officially employ staff, unless you use a special benefit, normal taxes are around 45% of the salary. It’s all very demotivating to register a business officially, but we’re getting there,” says Anna, while noting that because of these conditions for entrepreneurs, they are not the only ones who don’t do business according to all local rules.

In September 2023, Ruslan, who came from Moscow and previously worked as a sales manager for Nissan and Mercedes-benz cars, opened Cofix, Spain’s first fixed-price coffee shop – very popular in Russia. Like Anna, he also took a roundabout way to start his business: he provided the documents of his mum, who has been living in the country for over 5 years, to open a sole proprietorship, as “things are really bad with documents here”.

However, it is interesting to note that in addition to bureaucratic difficulties, all Eurasia.sk’s interlocutors emphasise that there are still many areas for development in their countries.

“In Spain, there is a huge problem with services. In my opinion, this is due to the lack of competition in many areas: here, wherever you look, there are either family businesses or groups of large companies, so there is virtually no layer of small business that would develop in the legal field,” Ruslan continues.

Alexei from Cyprus tells about the same situation, noting that many businesses are run from generation to generation by one family, and it will be “not happy” if someone in the neighbourhood opens, for example, a cafe.

Despite the fact that a lot of Russians have moved to Belgrade, at present, according to Anna, the city remains “fertile ground for development of any kind”.

Thus, it turns out that the Russians who left would be more active in business if it were not for bureaucratic obstacles. At the same time, none of the interviewees confirmed that these administrative procedures were somehow tightened only for them because they are Russians – such barriers to entry into business apply to all people who are not EU citizens, if we are talking about Spain and Cyprus.