Doing business in Russia in 2026 is not a question of whether the market is open—it is a question of to whom, on what terms, and under what regulatory logic. The landscape that confronted foreign companies in 2022 has settled into a new configuration: Western firms that left have largely stayed gone, Chinese and Turkish entrants have filled the vacuum, and the Russian state has built an elaborate apparatus of control over foreign capital that rewards some investors while making life difficult for others. For anyone considering entry or re-entry, understanding this configuration is the precondition for any commercial decision.
The Departure Is Real, but Incomplete
The scale of the Western exit is substantial. By early 2026, roughly 60% of large companies from “unfriendly” countries had restricted or ceased operations in Russia, with cumulative losses estimated at over $610 billion in forgone revenue between 2022 and 2025. Canadian, Australian, and New Zealand firms exited almost entirely; Nordic companies largely disappeared. Among the largest firms with annual revenue above 1 billion rubles, 183 of roughly 300 fully departed.
But the exit was never as clean as headlines suggested. More than 11,600 Western companies continue to operate in Russia in some form, paying an estimated $5 billion in annual taxes. Nine major automakers that suspended sales—including BMW, Hyundai, Porsche, Toyota, and Mitsubishi—retained Russian subsidiaries that continued generating revenue in 2025, largely through parts and service operations. BMW’s two trading entities alone reported combined income of approximately 6.5 billion rubles last year. Luxury boutiques officially closed but continued selling through e-commerce platforms. The pattern is one of formal withdrawal paired with operational retention, a hedge against a future normalization that few are willing to foreclose entirely.
Who Is Actually Investing Now
The geography of foreign investment in Russia has inverted. China is the absolute leader in new market entry, with the number of companies having a Chinese founder growing from 1,434 at the end of 2021 to 14,798 by February 2026. Turkish, Emirati, Indian, South Korean, and CIS companies have also expanded. The share of Asian countries in Russia’s foreign trade turnover now stands at roughly 74%, while Europe’s share has fallen below 20%.
This reorientation has not been frictionless. At the St. Petersburg International Economic Forum in June 2026, the chairman of the Russian-German Chamber of Commerce warned that Chinese suppliers are marking up prices for Russia by three to four times on goods the country needs, pointedly noting that China is “not Mother Teresa” and does not engage in charity. The comment captures a tension that foreign entrants should internalize: the absence of Western competition does not mean favorable terms. It means different counterparties with their own leverage.
The Regulatory Regime: Two Contours
The Russian state has developed what analysts describe as a two-contour model for foreign investment. The first contour is defensive: expanded control over investments in strategic sectors, heightened scrutiny of financial flows, and the temporary management mechanism that allows the state to place assets of companies from “unfriendly” countries under Russian administration. The second contour offers targeted benefits for investors willing to work within current rules—special accounts, international territories of advanced development, and other mechanisms.
The temporary management tool is the most consequential for Western investors. It was used against Ariston in 2024, when the Italian appliance maker’s Russian subsidiary was placed under the management of Gazprom’s household systems division. In March 2025, Putin reversed the decision, restoring Ariston’s control—the first case of a Western investor returning to full ownership after 2022. The reversal was explicitly individualized, preceded by diplomatic engagement, and framed as recognition of Ariston’s responsible stewardship of its Russian workforce. The lesson is not that temporary management is easily reversed, but that it is a political instrument applied selectively and calibrated to broader bilateral considerations.
For companies still considering entry, the regulatory environment demands attention to localization requirements, data and technology rules, and the expanding scope of the strategic investment law, which now covers new categories of assets and may extend to IT, artificial intelligence, marketplaces, and data centers. Predictability of regulation, macroeconomic stability, and the ability to maintain ongoing dialogue with the state are cited by consultants as the factors that matter most to investors. That dialogue is not optional; it is the mechanism through which the two-contour system is navigated.
The Question of Return
For Western companies that left, the door is technically open but practically narrow. Putin has stated that Russia “did not expel anyone” and that those who wish to return may do so “on a competitive basis within our legal framework,” but with no privileges or preferences. Prime Minister Mishustin has emphasized that priority goes to companies that never fully left—those that maintained subsidiaries, honored obligations to employees, and preserved the possibility of return. Economy Minister Reshetnikov has said returning companies will face tougher requirements: greater localization, larger investments, and more responsible treatment of Russian consumers.
The practical obstacles are considerable. Niches vacated by Western brands have been filled by domestic and Asian competitors. A returning automaker, for instance, would confront a market reshaped by Chinese imports and elevated utilization fees that make regaining lost share difficult. The companies best positioned to return are those that retained legal entities and service operations, preserving both infrastructure and customer relationships. Those that sold outright and departed cleanly face a much harder path.
Practical Guidance
For a company evaluating Russia in 2026, the first question is not market size or growth potential—it is regulatory exposure. A business in a sector deemed strategic will face heightened scrutiny and potential state intervention. A business in consumer goods, pharmaceuticals, or light industry faces a less politicized environment, though payment and logistics frictions with Western counterparties persist.
The second question is counterparty risk. Chinese and Turkish partners offer access to supply chains and capital that Western partners no longer provide, but on terms that reflect their leverage. Due diligence on pricing, quality, and contractual enforcement is essential.
The third question is legal structure. The temporary management mechanism, though selectively applied, means that asset ownership for investors from “unfriendly” states is not unconditional. Structuring through jurisdictions and entities that reduce exposure to this mechanism is a matter for specialist counsel, not improvisation.
Russia in 2026 is not a closed market. It is a market operating under a different logic than the one that attracted Western investment before 2022—one in which political considerations are inseparable from commercial ones, and in which the state’s relationship with foreign capital is instrumental rather than principled. Companies that approach it with that reality in view, rather than with nostalgia for the pre-2022 landscape, will make better decisions.
