It has become known which companies will be able to do business in the newly created Russian offshore zones on Russky Island in Primorsky Territory and Oktyabrsky Island in Kaliningrad Region, starting from 1 January 2019.
Foreign companies will be able to register in Russian offshore zones, provided that such foreign companies:
carry out business operations in several states, including Russia;
have invested at least RUB 50 million in Russia within 6 months after the registration date;
were incorporated in a member state or observer of the Financial Action Task Force (on Money Laundering) (FATF) or the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval).
International corporations that will use offshore zones in Russia will be granted the following benefits:
no profit tax on the sale of assets and on dividends received, while the tax on dividends paid will be 5%;
no tax on profits received from a controlled foreign entity until 2029; and
no currency control – companies will be able to consummate currency transactions without restrictions.
The tax advantages of the special administrative zones are available to international companies if they meet the following conditions:
the company was established before 1 January 2018;
the foreign company’s controlling persons became such before 2017; and
- the company submitted the necessary documents and information to the tax inspectorate no later than 15 business days of its registration date:
- the financial statements of the foreign entity for previous reporting year;
- a positive auditor’s opinion;
- information regarding the controlling persons of the international corporation.
Acsour will advise you on whether it is viable to register a company in the offshore zones.