The list of companies cutting ties with Russia is getting longer and longer. In response, the country took the first step towards adopting a law that allows nationalizing companies departing from Russia. Companies already saw that threat coming, but what can Russia do in concrete terms?

Nationalisation in this case means the expropriation of factories, offices and other (Russian) property of departing enterprises. The bill affects departing companies that are owned by unfriendly states for more than a quarter.

Companies can evade such nationalisation only by resuming their activities in Russia or selling shares. According to the Russian news agency Izvestia, the country has at least 59 Western enterprises in mind to expropriate.

Shell, Unilever, Heineken, IKEA and McDonald’s, among others, would be on that list. They decided to leave Russia partly or completely after the invasion of Ukraine. No company has been expropriated so far, but it is not unthinkable.

And if you are then nationalised, you as a company have to deal with large write-offs. To avoid that, companies can try to sell their assets before nationalisation, but you also get little for it.

It can also be a challenge to find a buyer. China has not turned its back on Russia and is said to be a potential buyer for the properties of the companies that left Russia.

After the Russian invasion of Ukraine, many companies chose to partially or completely sever their ties with Russia. Now that Russia is threatening to nationalize their properties, companies like Shell and Heineken do not seem to be taking any concrete actions yet.

The list of departing companies is impressive, but only a few will turn their backs on Russia forever.

For example, McDonald’s could continue to bake burgers in Russia, but under a different name. Many companies will disconnect the legal structure from the parent company or continue with a name change in Russia. And temporarily stopping exports to Russia can be reversed again next month.