Approximately Half of Foreign Businesses Shut Down in Novosibirsk
Foreign Businesses Bid Adieu to Novosibirsk Region
Over the past three years, the Novosibirsk region has seen a significant decrease in businesses with foreign involvement, much like the rest of the country. From an initial 778 foreign legal entities in 2022, this number dropped to 358 by January 2025, representing a 54% decline as reported by Infopro54 citing Kontur.Focus analysts.
Experts compiled a top 10 list of sectors with the highest number of businesses with foreign participation, with "Other Trade (Wholesale)" taking the lead. The number of foreign businesses in this sector dropped by a staggering 55.81% between January 2022 and January 2025. Following closely was the "Construction Works (Service Provider)" sector, with 70 companies departing the scene, and "Real Estate Management (Service Provider)" in third place, with 13 companies leaving the market.
While popular sectors like technology and IT have seen a reduction in foreign participation, the regional economy continues to attract foreign investors, as noted by Veronika Skorokhodova, an analyst at Kontur.Focus. However, the data suggests a shift in focus towards domestic capabilities and import substitution, a trend observed in both the broader Russian economy and the Novosibirsk region.
A New Economic Landscape for Novosibirsk
The decrease in foreign participation in businesses in the Novosibirsk region can be attributed to several interrelated factors. Geopolitical tensions and economic sanctions have created an unfavorable environment for foreign investment and participation, while a strategic shift towards domestic-developed technologies and self-reliance in key sectors discourages foreign business involvement. Furthermore, the concentration of economic power in regions like Moscow may overshadow areas like Novosibirsk, leading to a decrease in foreign investment attention.
In light of these factors, it is unsurprising to see a decline in foreign participation in the technology, IT infrastructure, manufacturing, and construction sectors in Novosibirsk. The regional economic focus is shifting towards domestic capabilities and away from foreign partnerships, reshaping the business landscape accordingly.
One glimmer of hope for foreign investors? The Novosibirsk region continues to attract Chinese businesses, with over 250 companies with Chinese participation reportedly operating in the region, as noted during a visit by the General Consul of the People's Republic of China in Yekaterinburg, Mr. Luo Xishun.
- The reduction in foreign businesses in the Novosibirsk region is not limited to the region, as it mirrors a national trend, with the number of firms dropping from 778 in 2022 to 358 by January 2025, amounting to a 54% decrease.
- In the Novosibirsk region, the top sectors with foreign participation showed a decline, with "Other Trade (Wholesale)" experiencing a 55.81% drop in foreign businesses, followed by "Construction Works (Service Provider)" and "Real Estate Management (Service Provider)".
- Despite a decrease in foreign participation in businesses in Novosibirsk, the region continues to attract foreign investors, particularly those from China, with over 250 Chinese companies reportedly operating in the region.
- The shifting economic focus in the Novosibirsk region towards domestic capabilities and import substitution may lead to a reduction in foreign partnerships in industries like technology, IT infrastructure, manufacturing, and construction, altering the business landscape.
