Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Sheffield's 'Real' LORAX Defending the Trees From the Labour City Council Patrol Units - 15th Dec 17
Stock Market Decline Signals are Near - 15th Dec 17
Santa Is Putting Christmas On The Blockchain And Saving Billions - 14th Dec 17
The Unprotected, the Protected, the Vulnerably Protected Classes—Which Are You? - 14th Dec 17
Gold’s Upside Target - 14th Dec 17
Year-end US Interest Rate Hike Again Proves To Be Launchpad For Gold Price - 14th Dec 17
2 Charts That Might Define the Fed’s Jerome Powell Era - 13th Dec 17
UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - 13th Dec 17
Stock Market Elliott Wave Forecasts - Is the World coming to the end? - 13th Dec 17
A Method Traders Can Use to Confirm an Elliott Wave Count - 13th Dec 17
Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - 13th Dec 17
A Former Wall Street Veteran: Good Traders Are Born, Not Trained - 12th Dec 17
Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts to Continue? - 12th Dec 17
Masters of Economic and Political Illusion – in Taxes, Debt, Government, and Markets - 12th Dec 17
Approved Used Land Rover Main Dealer Real Customer Buying Guide - Hunters, Chester - 12th Dec 17
Gold Price 100% Bullish Signal - 12th Dec 17
Epic Stock Market & Fixed Income Bubble Will Not End Well - 12th Dec 17
Bitcoin can be stolen. Although Can’t be hacked - 11th Dec 17
Have Stocks Reached A Permanently Rigged Plateau? - 11th Dec 17
Trying To Beat The System Is A Fatally Flawed Investment Strategy - 11th Dec 17
Is This The Beginning Of The Next Silver Rush? - 11th Dec 17
The Dow Gold Ratio - 11th Dec 17
Evidence of a Stock Market Top Mounting - 10th Dec 17
Bitcoin Doesn’t Exist – Forks and Mad Max - 10th Dec 17
Bitcoin Doesn’t Exist – Putting the Banks Out of Business - 9th Dec 17
China’s Struggle for Market Economy Status - 9th Dec 17
Is Gold Really Strong? - 9th Dec 17
Bitcoin Parabolic Mania - 8th Dec 17
SPX Make a 61.8% Retracement - 8th Dec 17
Gold, Stocks and Bonds - The 3 Amigos Update - 8th Dec 17
Gold Stocks Break, Gold to Follow - 8th Dec 17
4 Charts That Show How Trump Tax Cuts Will Trigger A Recession - 8th Dec 17
Precious Metals Breaking Down! 3 Amigos to Abort? 4 Horsemen to Ride? - 7th Dec 17
Bitcoin Just Smashed Through $12k… Wait, $13k… Now $14k… This Is Getting Ridiculous! - 7th Dec 17
Stock Market Tops Look Like This - 7th Dec 17
Crude Oil, Oil Stocks and Invalidation of Breakouts - 7th Dec 17
Bitcoin Doesn’t Exist – 2 - 7th Dec 17

Market Oracle FREE Newsletter

Traders Workshop

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

Catching a Falling Financial Knife