Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
More Clarity for the Short Term for Bitcoin Price - 22nd May 18
Study: A Rising and Strong U.S. Dollar Isn’t Consistently Bearish for the Stock Market - 22nd May 18
Gold, Silver & US Dollar Updates with Review of Latest COTS - 22nd May 18
Upside DOW Stock Market Breakout May Be Just the Beginning - 22nd May 18
5 Reasons Why Forex Trading Is Becoming Such A Big Deal In SA - 22nd May 18
Fibonacci And Elliot Wave Predict Stock Market Breakout Highs - 21st May 18
Stock Market Ideal Cycle Low Near - 21st May 18
5 Effects Of Currency Fluctuations On The Economy - 21st May 18
Financial Conditions are Still too Easy for the Stocks Bull Market to End - 21st May 18
US Stock Market Elliott Wave Predictions for 2018 and Beyond - 20th May 18
Are You Still Fearful of Cryptos? - 20th May 18
US Stocks - Why I am Short-term Bearish, Medium-term Bullish - 20th May 18
Looking for a Turn in Gold Price - 20th May 18
GDX Gold Mining Stock Fundamentals 2018 - 19th May 18
Semiconductor Stock Market Canaries: Chirp, Warble… Soon a Croak and Silence? - 19th May 18
Three Drivers of Gold Price - 18th May 18
Gold Market in First Tertile of 2018 - 18th May 18
What Happens Next When Small Cap (Russell) Leads the Stock Market - 17th May 18
Negative Signs for EUR/USD? AUD/USD - Battle - 17th May 18
DOW Jones and CRUDE Oil on a Cliff Edge, Waiting for a Nudge! - 17th May 18
Gold Price No More Subtleness – It’s Show Time! - 17th May 18
VIX Cycles Point to Stock Market Correction - 17th May 18
Trump Sounds End Times Armageddon Trumpet for Jerusalem, Israel Evangelical Prophecies - 16th May 18
Our Next Stock Market Dow Fibonacci Price Targets – Get Ready! - 16th May 18
The Coming Copper Crunch - 16th May 18
Stock Futures Are on a Sell Signal - 16th May 18
What to do When the IRS Comes for Your Property - 16th May 18
IS BITCOIN ANONYMOUS? - 16th May 18

Market Oracle FREE Newsletter

Trading Lessons

Cyprus Crisis Prompts Russia to Create its Own Tax Haven

Politics / Russia Apr 21, 2013 - 07:34 PM GMT

By: Pravda

Politics

Since the time of the financial disaster in Cyprus, Russia has been cherishing the idea of creating its own offshore. It was previously suggested the special tax area should be created on the territory of Russia's Far East. A new idea has appeared now - to create an offshore zone on the base of the International Investment Bank (IIB). Many analysts were left perplexed with such a suggestion.


The International Investment Bank was created in 1970 to deepen and develop the cooperation between socialist states. Now it is offered to arrange an internal Russian offshore zone on the base of this bank, Finmarket reports with reference to an anonymous source in the Finance Ministry. The details of the project, which was announced by first vice Prime Minister Igor Shuvalov, remain unknown.

Meanwhile, it is the details that raise certain curiosity. Should the above information be true, Igor Shuvalov offers something that does not exist anywhere in the world. Offshores are not created on the base of certain banks. The Russian one, if ever materialized, will be the first one.

A number of publications say that such an idea could appear after Shuvalov's meeting with IIB's head Nikolai Kosov. He gave perfect recommendations to his bank and called it the only full-fledged international and many-sided institute of development in Moscow. He also said that the IIB was the only possible platform for the International Financial Center that is currently being built in the Russian capital.

Indeed, some say that the IIB has the qualities that can make the bank become a full-fledged offshore. The bank does not fall under the control of its member-countries - Russia, Bulgaria, Vietnam, Cuba, Mongolia, Romania, Slovakia and the Czech Republic. The bank is also relieved of tax payments, protected from court and administrative interference and uses a diplomatic status, Interfax reports.

"There is nothing like that in the world, when an offshore ozone is created on the base of a bank. It is very hard to imagine that technically, so most likely, it will not materialize. In addition, to organize an offshore zone in Russia, one needs to attract people to it first. Those who have their business arranged in other offshore zones, will not be interested in making any changes. Taking all of that to another offshore zone will take a lot of energy and money. It can also be dangerous to the funds that will be transferred. I do not think that Russia is capable of attracting investors to its offshore zones even if they are created. There is a country risk, there is a system in which everything is well established and signed, in which everything is known very well to all," Darya Pichugina, an analyst with Investcafe said.

In addition, one should bear in mind the fact that the idea about the creation of the offshore zone appeared after the events in Cyprus. There was a great deal of Russian deposits in the country. For them, the creation of a Russian offshore zone is pointless. Cyprus has limited operations on bank accounts, and it is impossible to transfer assets to a Russian offshore zone, even if this zone is created.

"Most likely, such an offshore zone will not be popular. Country risks in the country are high, and even if foreign investors are interested in the Russian offshore, they will have a special attitude to it. In Russia, risks are higher than in other offshore zones, where everything is clear, they are even higher than in Cyprus. Foreign investors can hardly be interested in transferring their funds to Russia on account of these risks. Creating an offshore zone in Russia needs people and their money, first and foremost. Offshore zones need residents," Darya Pichugina said.

Anastasia Garina

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules