"It is important to protect the Russian market from friends as well"

National markets should be opened to foreign partners, while maintaining a balance between the interests of foreign businesses and Russian companies. This concerns relations with contractors from BRICS and the SCO, as well as with Western firms, Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, told Izvestia at the WEF-2025. According to him, there is no queue for the return of foreign brands to Russia, but it is more important to support those players who continue to work here, observing our legislation. He also noted that the economy needs to be "warmed up," and the optimal ruble exchange rate for the budget and business is around 95 per dollar. How to double the capitalization of the stock market and why the main condition for investment remains the protection of property rights — in an exclusive interview with Alexander Shokhin.

"The key issue for investments is the protection of property rights"

— At a meeting with the president in March, you said that you had worked out the aspects of the privatization mechanism and came to the conclusion that it was possible to fix the rules that would make the procedure more streamlined. For example, it would be possible to challenge a privatization deal only within a legally defined period, and not decades later. What other nuances are assumed? Why did this question arise now?

— Today it is extremely important to liberate business activity and form a long-term vision for the business. Entrepreneurs should make plans for the years ahead. But if companies are still at risk of facing a revision of the results of privatization in the 90s, noughties, or even 2010s, such plans become problematic.

Now that the key rate is decreasing (we are waiting for another reduction in September), businesses need to use this window to invest and resume projects that were frozen after the rate rose to 21%. And for investments, the key issue is the protection of property rights. We have repeatedly raised the issue with the President that it is necessary to put an end to the disputes over the privatization of previous years by consolidating the application of the norms of the Civil Code. Back in 2013, the Constitutional Court confirmed that the limitation periods should apply to civil law transactions.

However, in practice, this rule has not been extended to privatization transactions. Currently, the statute of limitations is three years, but it can be extended according to newly discovered circumstances — up to a maximum of ten years. Nevertheless, the Prosecutor General's Office often initiates lawsuits on other grounds, considering privatization not as civil law transactions, but as a violation of the intangible rights of citizens and society, where deadlines are not set.

We insist: we need to return this issue to the civil law field and fix that the starting point of the limitation period is the moment of the change of ownership reflected in the state registers. The moment of checking the prosecutor's office cannot be considered the beginning of the countdown. This should be the time when the data was entered into the registry.

So far, the government and law enforcement agencies have not been able to convince, but the president has repeatedly confirmed his intention to close this topic. After the SPIEF, there were instructions to work on the issue again. In the autumn, we expect active work to begin, including with the new heads of the Prosecutor General's Office and the Supreme Court.

"Almost everyone who was ready to move to Russian jurisdiction did so"

— At the same meeting with the president in March, you mentioned the relocation of Russian companies from offshore zones to Russian jurisdiction. Now this process is almost complete. What results can be summed up? Is there a risk that businesses will start looking for opportunities to register abroad again?

— Indeed, the process is almost complete. Several large companies that previously had foreign holding structures have registered in the special administrative regions on Russian Island and in Kaliningrad. Although their assets were located in Russia, their head offices were registered in offshore jurisdictions. This allowed, to put it mildly, to optimize taxes, or more precisely, to minimize them.

After Russian legislation not only allowed such companies to be transferred to special administrative regions, but also provided conditions comparable to preferential foreign jurisdictions, the re-registration process began actively. Although many faced difficulties, they were not always released from their former zones, and after 2022 it became difficult to obtain the necessary documents and permits. Almost everyone who was ready to transfer to Russian jurisdiction did so.

Moreover, there are not only incentives, but also an objective necessity. Because of the sanctions, it is extremely difficult to make managerial decisions abroad. In addition, companies enter the Russian stock exchange and become public joint-stock companies with a listing on the Moscow Stock Exchange. This is one of the growth factors of the stock market. By 2030, we need to bring capitalization to 60% of GDP, which is almost double the current figures. This can be done, among other things, through IPOs and SPOs of those international structures that have become Russian.

Is there a danger that companies will move abroad again if sanctions are eased? In my opinion, no. The only reason a business needs foreign assets is to invest in infrastructure for export. Russian companies should establish logistics, warehouse, and service centers abroad. To enter new markets, it is necessary to displace competitors, and this is not easy. For example, there are already not enough berthing facilities in Africa — we will have to build our own.

Therefore, such investments — manufacturing and infrastructure investments in the Asia—Pacific region, Africa, and Latin America - should be encouraged. This is not an outflow of capital, but support for the expansion of Russian companies. I think we will look at this process in a positive way in the future.

"I care less about Western companies than Eastern ones"

— Earlier you said that one of the conditions for the return of Western companies may be their refusal to finance Ukraine. What additional requirements, in your opinion, should be put forward to those who want to return to the Russian market?

— We are faced with the fact that foreign companies, leaving Russia, often violated their obligations to employees, partners and the state, for example, to pay taxes. But it's not just about returning businesses that have gone away. It is important to develop rules of entry to Russia for all players, both from unfriendly and friendly countries.

Companies should record their obligations regarding technology transfer and the use of intellectual property, so that a situation does not arise where a business can be destroyed overnight, including joint projects. There are proposals to consolidate the right of our shareholders to a controlling or at least blocking stake, as well as to guarantee the participation of the Russian side in the management system. In my opinion, it is worth focusing on international standards, but at the same time taking into account the experience of 2022, when mass withdrawal began.

We need laws that will consolidate the responsibility of foreign partners, but at the same time will not scare off investors. The key area here is technological cooperation. We need growth points where it is difficult to do without international participation. But at the same time, we must not allow critical dependence on foreign partners, so that if they leave, we do not end up in a broken trough.

Therefore, it is important to think not only about those who left "in a bad way", but also about building long-term cooperation with all partners — be they Chinese, Indian, American or European companies. The focus should be on technological cooperation and the creation of strong, mutually beneficial relationships.

— Is there already an understanding of which companies are really ready to return? We see cautious optimism about a possible warming of relations between Russia and the United States.

— If we talk about the return, I would like to note this: the expansion of the Chinese automotive industry, which has now declined somewhat for a number of reasons, has forced Japanese and Korean auto giants to think about returning. They understand that after a while all the niches will be occupied. Therefore, those companies that used to have large-scale production facilities with deep localization here are considering the possibility of a gradual return in order not to lose their positions.

On the other hand, the new Russian owners of the assets of the departed companies also have their own interests. They need time to strengthen their position in the market, so they are not interested in the early return of the former parent structures. It is important to find a balance here. For consumers, competition means quality and affordable prices, but the interests of domestic investors must also be taken into account. If they have not just bought out assets under preferential schemes, but have invested in modernization and technology, they need to be given time to recoup their investments.

There is no queue to return yet. Even McDonald's is not showing zeal: and there is nowhere to go back to — Russian fast food chains have already occupied both the hearts and stomachs of consumers. Therefore, a global return is possible only if the foreign policy situation changes.: lifting sanctions and reducing pressure on Western companies from their governments.

For foreign businesses, the key is the market, demand, and volume. But, in my opinion, first of all, it is necessary to support those players who continue to work in Russia and behave correctly, including companies from unfriendly countries. There is no need to rush to transfer their assets to temporary management.

Plus, it's important to protect the Russian market from friends as well. Chinese and Indian companies are actively entering our market, and the task is to balance interests. For example, a free trade agreement was discussed at the WEF as part of the Russian-Indian dialogue. Negotiations have been going on for six years, but so far to no avail. If it is signed, it will lead to a reduction in tariff protection for the Indian market. Given that the Russian market is more open than the Indian one, it is important for us to maintain a balance.

Balanced opening and protection of national markets is becoming one of the key areas, both in relations with BRICS and SCO partners and with other friendly countries.

— Concluding the topic of Western companies: is there a risk that their return will undermine the policy of import substitution?

— We have been talking about the need for import substitution for several years, if not a decade. But even now, I'm less concerned about Western companies than Eastern ones. For example, the expansion of Chinese manufacturers in the field of equipment, mechanical engineering, and computing technology is so large-scale that European suppliers can be ignored.

The task now is to find a balance in tariff and non—tariff regulation, phytosanitary standards and other instruments. On the one hand, it is important for us to open the Chinese market to Russian exporters. On the other hand, it is necessary to prevent excessive expansion and unfair competition from Chinese suppliers. They are able to dump due to the huge scale of production, strong government support and cheaper financial resources. As a result, it is not so much import substitution as an idea that will be at risk, but rather the investments of Russian companies in recent years.

Therefore, when we talk about import substitution, it is important to focus not just on market protection, but on the development of industrial cooperation and technological cooperation. This should bring more incentives than regular trading.

"By the end of the year or early next year, the ruble exchange rate will hit 95 per dollar"

— In mid-August, the government reset the regulations for the sale of foreign exchange earnings. Is there a risk of a significant weakening of the ruble because of this? And do you think that exporters will soon be required to sell foreign currency again?

— Firstly, many exporters need a currency because they are also importers. Secondly, the desire to sell revenue is always higher when the exchange rate is predictable. At the beginning of the year, a dollar was worth more than 100 rubles, now it is less than 80. Such uncertainty provokes fussy actions: sell or hold the currency, wait for exchange rate changes.

The strict regulation in recent years — in terms of timing, volume, and percentage of sales — has shown that it is largely excessive. Even without administrative measures, companies are forced to sell foreign currency: when there are not enough working capital and it is difficult to take out loans due to the high interest rate, all resources are used to fulfill obligations to partners and employees.

Therefore, I do not see any particular concerns. Although, if you look at the rhetoric of officials, everyone has already moved away from the idea that 100 rubles per dollar is the best course for the budget and exporters. Now they call the comfortable range 90-95. In this corridor, the budget will be able to fulfill its obligations without additional costs for indexation, and exporters will receive enough to increase tax revenues. I think by the end of the year or early next year, the ruble exchange rate will hit 95 per dollar.

— Polina Kryuchkova, Deputy Head of the Ministry of Energy, sent a letter to the government office outlining strategic risks for the Russian economy. So, one of them indicates the ruble exchange rate below 75 per dollar and above 110. You said that the 90-95 range is convenient for the budget. And how does business perceive this level?

— In March 2022, when the exchange rate collapsed sharply, many of my colleagues already said: it would be good to keep it in the 90-100 corridor so that there would be at least some certainty. Now three and a half years have passed, and we are discussing the same guidelines.

A strong ruble (below 80 per dollar) leads to the fact that the budget does not receive income from export taxes. A rate above 110, on the contrary, accelerates inflation and makes it impossible to fulfill social obligations such as pension indexation and other payments.

But speaking of risks, it is important to understand whether our course is manageable. Formally, it is floating, and after the 1998 default, the Central Bank did not undertake obligations to keep it in the corridor. Nevertheless, the government and the Central Bank have a whole set of tools for indirect influence: monetary policy, regulation of banks, budgetary measures to support industry and investment projects.

Therefore, we should not be talking about hard course retention, but about predictability. It is important for a business to understand what factors influence it. It's not just global oil prices and inflation. There are many more factors, and some of them are quite amenable to regulation.

"There is already an understanding that the economy needs to be heated up"

— Many experts predicted a massive wave of bankruptcies due to the high key interest rate. For example, in August, Deputy Prime Minister Marat Khusnullin said that every fifth developer could go bankrupt. Are there really such large-scale risks and which industries are the most vulnerable?

— There are certainly risks. When the rate began to rise last fall, we warned the president, the government and the Central Bank that this would lead to non-payments and bankruptcies. Formally, there were no mass bankruptcies, and the Central Bank even said, "See, it's okay." But in fact, we got a cooling of the economy, even hypothermia.

In the spring, at the RSPP congress, we emphasized that controlled cooling should not reduce the economic growth rate below 2%. We believed that 2-2.5% was the optimal level: moderately inflationary, but allowing us to solve the tasks of national projects and maintain stability. We are now reaching a GDP growth rate of around 1% by the end of 2025. This is clearly below what is needed, and there is already an understanding that the economy needs to be warmed up. By the way, Deputy Prime Minister Alexander Novak spoke directly about the need to include incentive mechanisms.

As for the industries: first of all, construction has slowed down. In fact, only the family mortgage remains, and many developers risk being on the verge of bankruptcy. The automotive industry is also in a difficult position — they often switch to shorter weeks and forced vacations. Metallurgy is experiencing a decline in exports, the domestic market is not able to absorb the entire volume. The coal industry is in a similar situation. Consumer demand is also declining.

One reduction in the rate will not be able to unwind this flywheel. It needs to be reduced gradually: if you do it abruptly, deposits will go to the consumer market. Then the deferred purchases will start to be realized, demand will spur inflation, and you will have to raise the rate again. Such "swings" are harmful to the economy.

According to the Central Bank's estimates, in 2026 the rate may reach 10.5% with inflation of 4-4.5%. We believe that an acceptable range is 10-12%. It will allow companies to invest and attract resources, including for operating expenses.

It is important where the population's money goes. This requires a stock market: not only long-term savings, but also reliable protection of property rights. Then the business will be confident in the future, will be able to enter the stock exchange, issue stocks and bonds. The population will receive a higher deposit yield, and the economy will receive investments. But this requires stable rules of the game and a predictable regulatory environment.

And, as you can see, we are returning to the first issue again — the protection of property rights. This is the foundation for investment and sustainable growth. I'm glad we're done wrapping up our conversation.