Off-Shore Companies

To avoid any losses caused by strict Currency Law you can use an off-shore company. You can create it or you can buy it just from the shelf. There are a lot of firms that offer such a service as establishing new or selling existed off-shore companies.

Here I shall describe the most common scheme of its usage.

If you wish to invest a large amount of money abroad you will certainly face the following problems:

1. Strict regulations described in Currency Adjustment and Control Act
2. Difficulties with money transactions (i.e. wire them back to Russia and make them cash with minimal losses)

These problems can be easily solved by establishing an off-shore company. (Owning a company abroad also breaks Currency Law, but you can own such a company without being "white collar criminal", for example you can act as the only fiduciary of the off-shore company).

Let us review how organizations responsible for currency adjustment & control can find out your investment activity:

1. When you wire your money Russian bank is obligated to inform Committee of Currency Control about such a transaction.
2. Thanks to treaty between Russia and United States Russian Currency Control organizations can request information about clients from Russia directly from U.S. brokerage company.

With opening an off-shore company you can open a corporate brokerage account at an U.S. brokerage company. In this case you are invisible for requests from Russian Currency Control organizations to the brokerage company.

For off-shore company you can open an account at any affiliate of a foreign bank located in Russia or close to its borders (for example in Baltic countries where you can travel by bus). No Baltic bank will inform any Russian Currency Control organization about your transactions.

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