Recently, analysts have presented multiple calculations regarding the repatriation of individuals to Russia. According to the Financial Times, they constitute 15%, HeadHunter claims 26%, while authorities estimate their share to be as high as 50%. Collaborating with experts, GORUS analyzed the data, seeking to uncover the reasons behind the return of Russians and whether this trend will persist.
The Departed
The majority of those who left possessed higher education, were politically inclined, and had above-average financial means. Departing individuals were typically representatives of the IT business, top management, fintech, banking, startup founders, university lecturers, journalists, and middle-level managers, as highlighted by Semen Kramskoy, the director of the S-Trade Trading Agency.
An important detail is that this migration did not become economic in the classical sense. A significant portion of those who left were competent specialists or leaders in Russia, but abroad, they mostly lost their status, significantly impacting their quality of life, according to research by Emil Kamalov and Iveta Sergeeva from the European University Institute (EUI).
Not as Expected Abroad
Abroad, Russians had to face several unforeseen circumstances. Experts note that one of the main reasons for their return is the tightening of residency permit rules and duration of stay in other countries. For instance, conditions for obtaining a residence permit in Hungary may change after February 2024, Cyprus is adjusting its VAT rate, and Greece is increasing the minimum investment required for obtaining a residence permit.
Businesses and startups also encountered difficulties, as mentioned by Semen Kramskoy. Many entrepreneurs chose countries with support in the form of benefits, relevant programs, and government grants. However, the availability of such services is diminishing due to an influx of foreigners, not only from Russia but also from other countries, such as due to escalations in the Middle East.
However, according to the creator of the financial school, Andrey Plotnikov, those who faced problems were those who stood unsteadily and had an unstable source of income. Prices and taxes vary in each country: for example, there are no taxes in the UAE, in Russia, it’s 13-15%, in America, it’s 30%, and in Europe, it’s around 20%, clarifies the expert.
The CEO of Siberia Capital, Nikita Reshetnikov, considers the ending financial cushion a probable reason for returning.
“Financial possibilities vary for those who left, and for some, these possibilities were in the form of a ‘non-stretchable’ financial cushion. Many of these cushions have run out or are already coming to an end. And the income has ceased. Some of these emigrants have already returned, and others will too. It’s a matter of time,” suggests the expert.
Various estimates suggest that 15 to 50% of repatriates have returned to Russia. Photo: Elena Afonina / TASS
Maria Ch., a resident of St. Petersburg, returned a few months ago from Georgia, where she moved in the spring of 2022. Her departure was not related to the beginning of current events, and it was planned before these events. However, the return became a consequence of everything that happened.
“After the partial mobilization was announced, and many rushed abroad from Russia, housing prices in Georgia soared significantly,” says Maria. “If previously, you could rent a good apartment in the center of Tbilisi for about $300, then from September 2022, it became impossible to find decent housing for that money. My friend, for example, was told that now she would pay $500, and in November, they immediately raised the price to $1000.”
Maria and her school-aged son had to move several times to stay within budget. These were apartments filled with the previous owners’ old belongings, where it was cold and damp in winter, hot in summer, or, ultimately, even worse, infested with bedbugs.
In addition, the exchange rate of the local currency, lari, relative to the ruble almost doubled in just six months. And although in Georgia, Maria notes, there is a good Russian diaspora, and overall, the locals were kind and friendly, due to financial difficulties, she had to return home. The level of comfort the family was accustomed to in St. Petersburg was no longer affordable abroad.
“I am not making any plans to move anywhere in the near future,” adds Maria. “And it’s not just about finances. Such changes require a lot of other efforts.”
Russians often face cultural differences, which significantly impact their quality of life.
“Wherever Russians go, there will be a different culture, and that is a significant factor. It requires practically re-educating oneself. Few will be able to accept this,” notes Nikita Reshetnikov.
Financial expert Ekaterina Astakhova also emphasizes the influence of the cultural factor.
“Upon moving, of course, everyone experiences stress because of a different cultural code, a foreign country, people with a different mentality, unfamiliar traditions, and dissimilar rules. What might be excellent in one country will be entirely wrong in another.”
Residential quarter in Tbilisi. Georgia
New Challenges: The Repatriation Debate
Certainly, among those who left, there are those who feel confident abroad, have no financial or job-related issues.
“These are highly-paid specialists, entrepreneurs, and others,” notes Nikita Reshetnikov. “Those not tied to a specific location. They can comfortably work remotely. And here lies the difficulty in their return because people may have found a good (comfortable) place to live while continuing to work for Russian companies. I think, overall, this is not bad. There is profit, there are taxes for the state,” believes the expert.
Meanwhile, the Ministry of Labor and Social Protection recently expressed an official position on this issue. The ministry stated that concluding an employment contract with citizens working abroad is not allowed, and this could significantly affect the interaction of repatriates with Russian employers.
According to Nikita Reshetnikov, if a person and a business want to work together, in the age of digital technologies, they cannot be stopped. The expert pointed out that the ministry currently lacks tools to determine the location of a company’s employees. Additionally, the main task of the ministry is to control the employer-employee relationship on various issues: labor safety, social guarantees, compliance with the specified salary in the contract, etc. According to the economist, the ministry is not oriented towards the economic indicators of the business but rather warns that it cannot qualitatively fulfill its obligations towards employees in another country.
“When statements like ‘it is not allowed to conclude labor contracts with people working from abroad’ come from the ministry, it is necessary to clarify that it is not the fact of working with people who decided to work for a Russian company that is unacceptable, but the fact that due to different legislation, it is no longer possible to adequately protect the parties,” the expert believes.
The Ministry of Labor’s initiative was supported by the Federation Council at the end of the year. Senator Andrey Klishas announced the development of a bill to restrict remote work for those who left Russia, as reported by RTVI. Additionally, “United Russia” prepared a bill prohibiting the conclusion of remote work contracts with tax non-residents in certain specialties, said Deputy Andrei Isaev. According to him, the bill is not discriminatory but aimed at protecting Russians.
“It is primarily about the safety of our people. A person who works, for example, in the banking sector, has access to corporate email, to the database. We wouldn’t want our databases to fall into the hands of scammers abroad,” he explained.
At the same time, Russia is ready to attract foreign specialists. The government even presented a list of specialties whose foreign representatives can work in our country. According to the Ministry of Labor, Russia is ready to employ foreign nuclear workers, IT developers, electronic engineers, and automakers. The country is also waiting for energy specialists, shipbuilders, and healthcare workers. Our state also invites foreign cultural masters.
Until now, foreigners were not allowed to be called for such positions. Thus, the demand for specialists in Russia is growing, already noticeable in strategic sectors.
By Daria Kolesnikova