Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17
Bitcoin Hits New All-Time High Above $5,000 As Lagarde Concedes Defeat and Jamie Demon Shuts Up - 13th Oct 17
Golden Age for GOLD, Dark Age for the Stock Market - 13th Oct 17
The Struggle for Bolivia Is About to Begin - 13th Oct 17
3 Reasons to Take Your Invoicing Process Mobile - 13th Oct 17
What Happens When Amey Fells All of a Streets Trees (Sheffield Tree Fellings) - Video - 13th Oct 17
Stock Market Charts Show Smart Money And Dumb Money Are Moving In Opposite Directions—Here’s Why - 12th Oct 17
Your Pension Is a Lie: There’s $210 Trillion of Liabilities Our Government Can’t Fulfill - 12th Oct 17
Two Highly Recommended Books from Bob Prechter - 12th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

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

© 2005-2017 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

Catching a Falling Financial Knife