Several prominent Russian businessmen are silently moving billions of dollars abroad amid growing long-term concerns about the state of the Russian economy. After four years of war, state government spending has remained at record highs, hampering growth. The problems have been further exacerbated by Western sanctions and Ukrainian drone strikes, which have not only hampered the economy but also prevented wealthy Russians from safely moving their wealth to the West. Additionally, high-profile asset seizures from some members of the Russian elite have further heightened uncertainty among the country’s wealthy, who are now seeking alternative avenues to secure their savings.
Russia’s Elite are Moving Their Wealth
Putin and Russian Military Creative Commons Image
Putin in 2021 Creative Commons Image
According to a Bloomberg report, some of Russia’s wealthiest residents, including those apparently close to Putin, are quietly moving their assets out of the country. Several documents, such as corporate filings and property purchase records, indicate a growing trend of wealthy Russian citizens offshoring their assets as concerns about the country’s economy continue to mount. Russian businessmen are increasingly investing in assets like cryptocurrencies, gold, foreign property, and private investment funds, especially in the Gulf regions. Dubai seems to be a popular destination for foreign investment among many businessmen, alongside Saudi Arabia, Turkey, Cyprus, and even some parts of Africa.
Prior to the war, Russia’s billionaire class enjoyed numerous benefits from doing business with the West, securing major business deals, luxury housing, and developing good relations with European and American business partners. After Russia invaded Ukraine in 2022, however, Russian businessmen and corporations were forbidden from trading with the West, and many prominent wealthy Russians became the target of sanctions from the EU. With overseas opportunities and assets frozen in the West, many tycoons were forced back to Russia. At home, however, these businessmen encountered many different challenges. Since 2024, many businessmen who have been trying to maintain their Western ties have had their assets seized by the state. Additionally, the slow growth of the domestic economy resulted in lower profits and more limited business opportunities.
Cracks in Putin’s War Economy
Since the first year of the war, Russian businessmen have been attempting to relocate their assets abroad to achieve some level of financial stability. According to the Central Bank of Russia, around $250 billion left the country in 2022. It is impossible to say how much money has left the country up to this point; figures for this year suggest that tens of billions have left, according to some people familiar with the situation. Beneath the official economy lies a complex shadow economy, in which a significant portion of transactions occur within Russia without government knowledge or approval. This makes it even more difficult to determine what is actually happening in the broader Russian economy.
Despite the mounting economic difficulties and uncertainties, many prominent businessmen are still conducting the majority of their business within Russia. Despite this, many billionaires are still quietly relocating their assets as economic difficulties persist. As the war rages on, the Kremlin has been looking for ways to raise revenues and keep the war economy going.
One such method has been to raise taxes. Moscow has raised corporate taxes from 20% to 25% in recent years. However, raising taxes is inherently unpopular and is always a risk if rates go up by too much. Putin has instead opted to cut government spending in other areas while protecting defense expenditures.
Looking for a Way Out
Last year, the Russian state began cracking down on wealthy businessmen attempting to relocate their assets out of the country. According to prosecutors, the state recovered $51.5 billion in assets for the country.
Among the tycoons whose assets were seized were Vadim Moshkovich, the founder of Ros Agro Plc, one of the largest agricultural holdings, Dmitry Kamenshchick, the owner of Domodedovo International Airport in Moscow, and Konstantin Strukov, the owner of the country’s largest gold-mining companies. In light of these seizures, many other prominent billionaires are seeking to offshore their assets internationally to avoid the Kremlin’s watchful eye.
With heavy Western sanctions and increasing government surveillance, many billionaires have had to find new ways to transfer their money without interference. Cryptocurrencies have emerged as one of the safest and most reliable means of transferring resources across borders. Dubai, renowned as a crypto hub, has therefore become a popular destination for Russian tycoons.
Other popular routes have opened in Armenia, Kazakhstan, and Kyrgyzstan using the A7A5 stablecoin. This method, developed by Moldovan banker Ilan Shor and the Russian lending company Promsvyazbank, enables seamless cross-border payments.
Does this mean that Russia is heading toward economic collapse?
Probably not. However, this recent trend of wealthy tycoons moving their assets out of the country does indicate decreasing confidence in the Russian economy by the country’s wealthiest. While the economy has continued to soldier on despite sanctions and war-related burdens, cracks in the foundation have begun to form, and no amount of Kremlin propaganda can hide it.
While Russia may not collapse financially, the country faces serious hardships in the future if things continue on their current trajectory.
About the Author: Isaac Seitz
Isaac Seitz, a Defense Columnist, graduated from Patrick Henry College’s Strategic Intelligence and National Security program. He has also studied Russian at Middlebury Language Schools and has worked as an intelligence Analyst in the private sector.
