Russian companies depart Cyprus amidst shifting landscape

In a period of reshaping within the Cypriot financial services sector, several Russian companies are bidding farewell to the island, local newspaper Philenews reports.

This exodus is driven by the departure of entities that had long considered Cyprus their base, with more expected to follow suit.

Prominent businesses with substantial operations are opting for relocation, either to Russia, specifically in special administrative regions, or to countries such as Kazakhstan.

As examples, the Cypriot media cites the departure or plans for the departure of TCS Group (the parent company of Tinkoff Bank), developer Etalon Group, retailer Fix Price, United Medical Group (holding company of the European Medical Centre), Transmashholding, Globaltrans and marketplace Ozon.

Recent reports from Russian media outlets underscore the mass departure of companies from Cyprus, linking this phenomenon to the stance adopted by Cyprus.

A Moscow Times report highlighted data on business entities owned by Russian oligarchs, attributing the exodus to the prevailing situation in Cyprus and the new order of things. It stated that at least 10 of the largest Russian companies decided to leave Cyprus from the beginning of 2023. Before the war, Russian residents held $162 billion in direct investments in Cyprus, five times higher than the Gross Domestic Product (GDP).

It further mentioned that Cyprus authorities initiated an investigation in the spring regarding Russian presence on the island, opening a total of 29 cases after the sanctions imposed in April by the United States and the United Kingdom against 13 companies and individuals found hiding the financial details of oligarchs. Among these were Roman Abramovich and Alisher Usmanov.

A Cypriot industry insider, commenting on the situation, estimated that there would be a cost for the sector. However, many service providers, anticipating the situation and future developments, have taken measures. In such cases, the cost for them is expected to be minimised, the insider remarked.