Russia and Hong Kong: The Trade and Investment Dynamics

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By Emil Avdaliani

Given the geopolitical tensions between Russia and Western countries, Moscow has actively sought to diversify its economic relations and reduce its trade dependency on the West. Strengthening ties with financial centers in Asia, including Hong Kong, offers a potential avenue for this diversification. One of the major results of the Western sanctions on Russia is that it led Russian individuals and companies to seek financial refuge or opportunities in places less affected by these sanctions. Hong Kong, with its well-established financial market, is one of the potential destinations for Russian capital and businesses. Another immediate result of the shift toward Asia is the change in the structure of trade between Russia and Hong Kong.

Russia – Hong Kong Trade

According to statistics for 2021, Russia ranked 18th among Hong Kong’s major export sources (US$5 billion), and 27th in imports (US$1.4 billion). Hong Kong’s exports to Russia consist of office machine parts, refined petroleum and gas turbines are Hong Kong’s top exports to Russia. In the period of 1995-2021 Hong Kong’s exports to Russia have grown by 3.98% each year from US$315 million to US$868. More than half of the goods imported from Hong Kong to Russia have traditionally been transport vehicles, mainly cars, and equipment.

Supplies from Russia are dominated by food products of animal and plant origin. For example, over the course of 2022 pork exports from Moscow-based producers to Hong Kong increased by almost 300%. Moreover, Russia also supplies platinum, chemical fertilisers, and gas turbines, which constituted the largest export products to Hong Kong. Russia is also a significant exporter of precious metals, particularly gold and platinum, as well as diamonds. Hong Kong, with its substantial jewelry industry and trading hubs for precious metals and stones, is a prime market for such products.

It is also worth noting that Hong Kong’s export profile is shaped largely by its role as a re-exporter and trade intermediary. Many goods produced in mainland China or other parts of the world are shipped via Hong Kong to destinations like Russia. Additionally, Hong Kong’s trade patterns have evolved over time based on market demands, geopolitics, economic agreements, and other factors. One of such factors have been the war in Ukraine and Russia’s re-orientation of trade toward Asia.

Nevertheless, between 2021 and 2022, the value of US semiconductor shipments from Hong Kong and China to Russia surged tenfold, reaching about US$570 million in sales. In the eight month period March-December 2022, approximately 90% of all chip shipments to Russia came from China and Hong Kong. Hong Kong doubled its semiconductors and integrated circuits exports to around US$400 million in 2022, putting it second only to China’s US$500-million-plus exports. Even prior to the conflict in Ukraine, Hong Kong not only served as a major supplier of high-tech goods to Russia, but there was no need to pay duties and incur other additional costs. With the sanctions imposed on Russia, doing this is now problematic, primarily due to fear of secondary Western sanctions against entities in Hong Kong.


With a total FDI stock of US$364 million at the end of 2020, Hong Kong ranked third among Asian investment destinations for Russians. By late 2020 Hong Kong likewise ranked third with total FDI stock of US$2.5 billion among the biggest Asian investors in Russia, after Singapore and South Korea.

In the period from late February to October 2022, Hong Kong has recorded an almost threefold increase in the number of companies (with a total of 35) with the word “Russia” in their name. In 2021 that number stood at ten.

Hong Kong is especially attractive for Russian IT companies as the city is well known for its preferences in the given sphere. The Russian IT market in 2022 was valued at approximately US$68 billion, and about 35% of Russian software developers sold their products overseas.

Hong Kong is also attractive for Russia given those numerous schemes which facilitate the Russian companies’ entrance into Hong Kong’s market. For instance, Hong Kong Capital Investment Entrant Scheme (CIES) enables Russian citizens to gain residency in exchange for major investment into the city. Russian investors can also obtain business investment visas.

The growing interest of Russian businesses in Hong Kong has caused concerns in the US which has been actively working on enforcing the sanctions regime against Russia. Washington has repeatedly suspected that the Russian companies could be using Hong Kong as a safe haven to evade sanctions. In July US Treasury officials asked Hong Kong to help limit the supply of American dual-use goods to Russia.

As sanctions restrict their access to Western courts, over the past year Russian businesses have increasingly resorted to Hong Kong as a venue for arbitration disputes. As a result of Hong Kong law’s neutrality towards sanctions, more Russian businesses are using local arbitration courts and transferring their contracts from English to Hong Kong courts, where the British-style legal system still prevails. Beijing only steps into Hong Kong’s legal jurisdiction when asked to by the Supreme Court, and then only for clarifications of sovereignty matters.

Looking ahead, overall, Russia’s relations with Hong Kong should be viewed within the broader context of Moscow’s ties with China where Hong Kong is a Special Administrative Region. Russia’s relationship with China has grown stronger over the years, especially in the face of growing competition from the West. Given the present trends Russia’s shift toward Asia will only intensify which will serve as a powerful incentive for expanding bilateral trade and potentially investment ties with Hong Kong. Russian businesses also look at Hong Kong as a door to the wider Indo-Pacific region especially ASEAN. Moscow and Hong Kong signed a Double Tax Treaty in 2017 that has aimed at lowering trade taxes, has largely delivered and is still in force.

There have been issues for Russian entities opening bank accounts in Hong Kong, however operational cryptocurrency exchanges in Hong Kong are able to arrange immediate transfers to and from Russia. Alternatively, arrangements can be made via third party accounts elsewhere in Asia.

For assistance contact Dezan Shira & Associates Hong Kong office at or refer to our 2023 Doing Business In Hong Kong guide below.

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About Us

During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.

We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email or visit

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