ALEXEI VEDEV: “COMPANIES MOVE TO OFFSHORE ZONES BECAUSE OF PROBLEMS WITH DOING BUSINESS”

Companies increased their presence in Russian offshore zones, particularly, on the Russky and Oktyabrsky islands. In January-February 2023, 87 companies moved to special administrative regions (SAR) and 45 companies completed the process of reregistration, with 80% of companies moving from Cyprus and 13% of companies, from the British Virgin Islands.

In Alexei Vedev’s view, companies with Russian shareholders move to Russian offshore zones because of problems related to doing business, as well as making settlements in US Dollars and euro.

“Settlements in US Dollars and euro are complicated and, certainly, it is justified for our companies to move to offshore zones. It is mainly Russian companies. For the Russian economy it is an obvious advantage. It promotes economic activity, companies can develop actively, carry out settlements and make investments because it suggests a reduction in the tax burden. In my opinion, it is an instrument of support, but I am not sure that any strategic breakthroughs will follow. This instrument is mainly aimed at small and mid-sized businesses. Self-employment and private entrepreneurship can be analogs, but private entrepreneurs are limited by the types of activities they are allowed to engage in,” Alexei Vedev says.