Russian companies are flocking to Hungary amid the sanctions

The European Union is slowly approaching Russia with the tenth package of sanctions, while Hungary has become popular among many international entrepreneurs. More than 10 percent of all domestically registered companies registered last year are of Russian interest. 

The EU is approaching Russia with the tenth package of sanctions

Due to the war, the European Union is approaching Russia with sanctions in the form of export restrictions, such as the ban on the import of Russian coal, the ban on maritime oil trade, or the termination of the export of various technological devices that can also be used for military purposes. In addition, there are a lot of debates about the fact that Russian financial institutions have been excluded from the international SWIFT interbank payment system. However, most of the sanctions apply mainly to private individuals and Russian state organisations, a total of 1,386 individuals and 171 organizations in the European Union, writes Portfolio. Part of the measures imposed on them is that it is forbidden to directly or indirectly provide them with any funds or assets, which makes it impossible for them to launch businesses within the EU.

• Read also: Are Transcarpathian Hungarians taken by force to die against the Russians?

Russian private assets have been frozen

Altogether, around 19 billion euros of private assets have been frozen in the 27 member states, but the exact amount of Russian state assets is not known. And in Hungary, from one month to the other, in December, the value of Russian properties closed by the authorities jumped from 3,000 euros to 870 million euros. This measure affected many companies within the EU: according to a survey by the NGO Transcrime, there are 31,000 companies in Europe owned by Russian beneficiaries. Out of these enterprises, 1,400 are controlled by 33 individuals who have recently been sanctioned. Real estate, construction, hospitality, financial and energy sectors are the ones most affected. In terms of countries, Germany, the United Kingdom, Cyprus, the Netherlands, Luxembourg and Austria list the highest numbers of companies operated by oligarchs. The assets of these companies exceed 420 billion euros.

Russian companies are fleeing

However, not all Russians have been banned from conducting business in the EU. In fact, several entrepreneurs critical of President Vladimir Putin’s regime have left Russia. Most of them fled to Serbia with their wealth, where the investments of foreign companies and individuals exceeded 4 billion euros. 1,020 Russian-owned companies were founded in Serbia in 2022 – over 12 times more than in the previous year when 82 such companies were established.

• Read also: Ukrainian mayor to Viktor Orbán: “We’ll get you, you bastards!”

Hungary is a popular destination as well

According to data from the Opten.hu company database, there are currently 671 operating companies in Hungary, one of whose owners is either an economic entity with Russian ties or a Russian citizen. Russian companies are continuously appearing in Hungary, since the pandemic; roughly 50-60 companies linked to the country have been established each year. After the start of the Russian-Ukrainian war, 77 companies of Russian interests were founded in Hungary. In other words, more than 11 percent of all operating businesses appeared in Hungary last year. This year, however, the momentum has stalled for the time being: by 27 January, only 3 companies had been registered.

Source: Portfolio