Foreigners will be lured to “Russian offshores” through personal “wallets”

“Vedomosti”: in the Russian SAR it will be possible to register personal funds

The Russian authorities are going to lure foreigners into “Russian offshores” – special administrative regions (SAR) on the Russky Islands in Vladivostok and Oktyabrsky in Kaliningrad – through personal funds and trusts used in the quality of personal “wallets” and not involving the formation of legal entities, writes “Vedomosti”. Corresponding amendments have been developed to the law “On International Companies and International Funds.” The assets themselves can be foreign real estate, shares and shares in foreign companies and funds, other securities, as well as funds in accounts with foreign banks.

New opportunities for foreigners will become relevant in view of the entry into force from March next year of the rule allowing the opening of personal funds in the SAR. According to experts interviewed by the publication, the initiative could be of interest to Russian businessmen who have come under Western sanctions, and those who are forced to follow the state's course of fighting offshore companies. However, the current version of the bill only deals with foreigners, even persons with dual citizenship will not be allowed to register personal funds in the SAR.

A source close to the government, in turn, noted that, despite this formulation in the bill, it is aimed primarily at “Russian beneficiaries.” Subsequently, a similar opportunity will be provided to Russian citizens.

The CAPs on the Russkiy and Oktyabrsky Islands were created in 2018 and have since been positioned as “Russian offshores”. The original goal of the authors of the initiative was to stimulate Russian businesses registered abroad to return to their homeland. There were some tax breaks for residents, but they have been revised several times since then. In addition, there were requirements for investing in the region's economy at least 300 million rubles and opening a physical office with a staff of at least 15 people.

In mid-November it became known that the Ministry of Finance is abandoning the idea of ​​reducing the tax on profit, including in the form of dividends, up to five percent due to Russia's participation in the international initiative to introduce a global minimum tax at a rate of 15 percent.