Nikita Deynega has explained to Delovoy Peterburg the sudden surge of business interest in ‘Russian offshores’
Delovoy Peterburg newspaper drew attention to the growing interest in ‘Russian offshore’ – special administrative regions (SARs) – separate territories of the Russian Federation with a flexible tax and currency regulation regime (profit tax exemption, the ability to hide the ultimate owners, lack of currency control, etc.). Formally, the idea to create SARs was implemented for the ‘deoffshorisation’ of foreign companies, but in 2022 Russian legal entities also had the opportunity to become a resident of SARs.
The SAR legal regime started operating on Oktyabrsky Island in Kaliningrad and Russky Island in Primorsky Krai in 2018. For the first few years, the number of companies registered in the SARs grew insignificantly: there were 22 in 2019 and 36 in October 2020. The surge began in 2023, and now the number of residents exceeds 400, including the largest tax payers – Rusal, Lenta, Severstal, TCS Group (the parent company of Tinkoff Bank), Yandex, subsidiary businesses of Sberbank and Avito. At the same time, the expected popularity of the SARs by the end of 2024 has already led to federal cities obtaining the right to prevent a number of companies from re-registering from their territory in the SARs.
“Our practice shows that interest in the SARs emerged only in 2023, when there were significant changes in international taxation for the Russian Federation. Thus, in February 2023 Russia was included in the blacklist of the EU countries with so-called harmful aspects in their tax regimes. This measure entailed a sharp response: since July 2023, the list of ‘offshore jurisdictions’ for the application of certain tax exemptions has been almost doubled. And already in August the main provisions of 38 double taxation agreements with unfriendly states were suspended. The primary source of Russian retaliation – the inclusion of Russia in the EU blacklist – was the result of the EU’s claims in 2022 to the SARs regime as containing elements of offshore preferences. The claims were taken into account, but the Europeans were not satisfied with them, which led to the transfer of Russia from the grey list to the black list,’ Nikita Deynega, Partner, Head of Tax and Administrative Law Practice at Maxima Legal, explained specially for Delovoy Peterburg newspaper.
To read the full article (in Russian), please, see Delovoy Peterburg newspaper`s website >>>