Deputies have prepared a bill about the elements of an offshore zone in Crimea

Boat station in Balaklava Bay

Photo: Ruslan shamukov / TASS

State Duma deputies have prepared a bill allowing to introduce elements of an offshore zone in Crimea and Sevastopol. The day before that such a project is discussed, RBC said the head of the Republic Sergey Aksenov

State Duma deputies have prepared a bill allowing to introduce elements of an offshore zone in Crimea. TASS Chairman of the Duma Committee on financial market Anatoly Aksakov at the Yalta international economic forum.

According to the MP, the main idea in the framework of the law on free economic zone in Crimea and Sevastopol — to introduce the possibility of creating trusts, which constitute the agreement on trust management of property. But unlike a classic trust management in Russia trust involves the transfer or donation of property in which the rights of the asset are also transferred from the original owner to the trust, explained Aksakov. In this case the right to receive benefits from the assets remains with the original beneficiary, he added.

“First, we will take risks for foreigners. We see foreign interest in Crimea, but they are afraid of sanctions. Second, those Russians who don’t want to open up, through trust could invest in the Crimea without risks,” — said Aksakov reminded that tax incentives in the Crimea in the framework of the free economic zone is already there.

He also noted that the question on creation in the Crimea of the elements of the offshore area in the near future will be discussed with the representatives of the Central Bank, Ministry of Finance and Ministry of justice. “The bill has already been prepared, but first I want to talk about it, to enlist the support of agencies”, — concluded Aksakov.

On 20 April, on the creation of an offshore zone in Crimea, told RBC a source close to the government, and was confirmed by the head of the Republic Sergey Aksenov. According to him, such a measure is necessary for legal format storing information about investors on the territory of Crimea. Now this idea is being discussed strategic ministries, including the Ministry of economic development, said Feldman.

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“The proposals were from a DePuy corps and members of the Federation Council, and from members of the Russian government to find a convenient option that still did not work and which can be applied for the first time in the Crimea. Until we have a common understanding has not come”, — said Aksenov.

He also said that at present, investors are quite personal guarantees Aksenov, so they were confident that they would not be disclosed. “Knowing who is the real owner and the real representative of the company and how long the projects will be implemented, I do not insist on the increased level of publicity in respect of such business”, — said Aksenov RBC, adding that investors choose the level of openness.

“I their actions will not harm or a potential investor”, — said Aksenov, answering the question of RBC, whether we are talking about offshore accounts in part for withholding information about owners of the companies.

Free economic zone (FEZ) in Crimea and Sevastopol was imposed in January 2015. Its residents do not pay tax on profit of organizations to the Federal budget, and regional pay at a reduced rate: 2% in the first three years, 6% — from the fourth to the eighth year and 13.5% in the ninth year (the standard rate in the budget of the region is 17%). The company is also ten years are exempt from tax on property and three years from land tax. They also apply reduced rates of insurance contributions to 7.6 instead of 30%. The SEZ in the Crimea was introduced on 25 years with the possibility of extension. As of the end of April in the unified register of participants of the SEZ includes 883 of the organization. According to Aksenov, the overall investment projects of FEZ is 80 billion rubles.

What is offshoring

Offshore zone — the territory of the state or part thereof within which to non-resident companies a special preferential mode of registration, taxation and licensing.

A single list of offshore zones does not exist, the control over offshore zones are the IMF, the OECD international network for tax justice, the Central banks of different countries. In Russia a list of States and territories providing preferential tax regime and is not providing for disclosure and provision of information when conducting financial operations, determine the CBR and the Finance Ministry.

Conventionally, offshore zones can be divided into three main groups:

1. Was offering them to companies not leading activities in their territory of full exemption from any taxes in exchange for a small fixed annual fee and does not require the filing of financial reports. Characterized by an almost complete lack of control from the state and a high degree of confidentiality about the company’s activities and its beneficiaries. These countries include Belize, Panama, Mauritius, Saint Kitts and Nevis, Vanuatu, British virgin, Cayman, Bermuda, the Marshall Islands and the Bahamas, and others.

2. Require financial statements and providing offshore companies with the perceived tax benefits. The activities of offshore companies is monitored. As a rule, as Directors of the company is required to appoint a resident of the relevant jurisdiction. Characterized by a high degree of confidentiality about the beneficiaries of the company, however, the state register allows to obtain information on the activities of the company and its beneficiaries on a commercial basis. This is Ireland, Gibraltar, Isle of man, Liechtenstein, Cyprus, Malta, New Zealand, Hong Kong, Singapore and others.

3. Providing an attractive tax environment was in them to non-residents, not extracting income from the territory of these countries. Also protect information on the activities of the company and its beneficiaries, but the state register makes it possible to extract this information. These countries include Austria, Denmark, Germany, Luxembourg, Switzerland, Latvia, Estonia, some States of the USA and others.

Basic income offshore account for fees for registration and re-registration, tax revenues, expenses offshore companies for the maintenance of permanent missions.

Offshore business has many advantages: simplified and accelerated process of registration of non-residents; the income taxes and income tax from physical persons is paid by non-residents at low rates; confidential information about the owners and activities of offshore companies; no state currency control; imported for the needs of companies materials, equipment, vehicles and equipment not subject to customs duties; as a rule, offshore companies are forbidden to engage in any business within the offshore zone.