There will soon be internal off-shores in Russia

A package of seven legislations was developed by a group of deputies and senators from Kaliningrad and Primorsky regions. The documents are aimed at de-off-shore the Russian economy. According to the authors, if investors come to special Russian administrative regions, then regional and federal budgets will receive additional profits in the form of tax revenues, and residents of the regions new jobs.

According to one of the initiators of the draft laws, the first deputy chairman of the Federation Council Committee on Economic Policy, Alexei Mayorov, residents of special administrative districts on the Oktyabrsky Islands in the Kaliningrad region and Russian in the Primorsky Territory will become business companies that are granted the status of international companies. To obtain it, organizations will need to move to Russian jurisdiction.

The senator is confident that the advantages of special administrative districts should make it competitive in comparison with other jurisdictions. Member of the State Duma Committee on Economic Policy Andrei Vetluzhskikh specified that residents of these zones can only be companies-investors who carry out international activities with the participation of Russia.

The islands will create a special tax and administrative regime that will allow companies to re-register in Russia in a short time and with a minimum of costs. Changes in the currency legislation will allow international companies to carry out transactions with Russian and foreign currency. For example, they will be able to conduct certain types of settlements without using bank accounts in authorized banks, without restrictions on the amount of transactions. The second reading of the law-in-draft on the recommendation of the State Duma Committee on the Finnish market adopted an amendment according to which foreign legal entities in the territory of the Russian Federation will be able to make settlements in cash foreign currency and the Russian currency within 100 thousand rubles. This rule will apply to all non-residents in the territory of the Russian Federation.

The drafts were adopted in the second reading on July 25, and at the plenary meeting on July 26 they are scheduled to be considered in the third reading.

Russia already has experience in creating offshore zones. In 1994, the zone of economic favored "Ingushetia" and the zone of preferential taxation in Kalmykia were established. Later, there were internal off-shores in the Altai Territory, Buryatia, several cities in Central Russia, Moscow, Novgorod and Kaluga regions. Internal offshore ceased to exist after the adoption in 2005 of the law "On Special Economic Zones in the Russian Federation".