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Banking in Russia: confidence and stability
Russia is home to one of the richest cultures in the world. By far, it has one of the most interesting and deep histories among civilizations. From the days of the Ancient Rus, passing through the Czarist Russia, its dark communist period, and modern-day Russia, the country has always thrived on being one of the leading players in the international arena.
The largest driver of Orthodox Christianity, and the home of Dostoyevsky, Tolstoy, and Repin, continues to be one of the major cultural, political, and economic forces in the world.
And one of the bases of its modern, service-oriented economy is the banking sector. Banks in Russia are integrated into the global financial system and offer a wide array of financial services. The country has a significant presence of international banks with solid reputations.
Indeed, the banking system is still recovering from the slew of sanctions imposed since 2014, and the oil prices decrease that made the Russian ruble tumble. However, the worst part has already passed, and Russian banks are thriving again.
Inflation is coming down, along with interest rates. The latter is not necessarily ideal for banks, and financial experts are foreseeing a possible slowing process regarding the growth of the banking sector. However, they are still significantly higher than in the US and the Eurozone. As of today, it’s 6% while it’s below 1 % in the US and the Eurozone.
What does that mean? That returns are incredibly high. That means that most financial companies established in Russia are seeing incredible revenues and are stable players in the market.
The forecast for the Russian economy is not necessarily the best for the next few years, but the banking sector is set to continue thriving.
This is especially the case as you consider that the central bank closed or bought some of the worst-performing banks, meaning that only top providers remain in the business.
Banks earned more than $15b in 2018 alone, and almost $30b the last year. 2020 may not see such a significant increase with winds of recession blowing and accelerated by the coronavirus crisis, but the numbers speak of the strength of the sector.
In fact, many international banks are taking advantage of their Russian operations to boost their activities in other jurisdictions.
The best example of this is a foreign bank that has a branch in Russia, that accounts for only 10 % of the bank’s full assets. However, it contributes to more than 40 % of its total profits, allowing the bank to expand its operation. The equity return of this bank is almost 25 %. That speaks of the strength of the market.
In comparison, banks in Europe usually get around 6 % in equity returns. That’s the result of full-blown statist policies that have hindered Europe’s growth.
The Russian economy gets a ton of bad press, but most of it is precisely that… only bad press, but not necessarily the truth.
Russia boasts a strong banking sector with fantastic investment returns. Yes, there are corruption issues, and the FDI flow isn’t ideal. Still, the country has tremendous fiscal health, with an overall tax burden that is well below the OECD average, budget deficits around 0.8 %, and a public debt that only amounts to 14 % of the GDP. Likewise, the government has relaxed regulations for obtaining construction permits, getting electricity, and paying taxes. All this has led Russia to become the 28th easiest country to do business in the world, according to the Doing Business report of the World Bank. That means it is ahead of China, Japan, France, Switzerland, and many other OECD countries.
This favorable business environment has endured even as the country has faced some financial hardships and stiff economic sanctions. It has led Russia to become a service-oriented economy, as the sector represents more than half of the country’s GDP and guarantees more than 45 million jobs, a number that increases every year.
Many of our clients have operations in Russia or Russian partners. That means that having a Russian bank account may simplify their processes. If that’s not of their interest, or they want to get their money quick, a reliable escrow agent is their best possible choice.
And, with our Russian partners, we can help you with that.
One of the main advantages of the Russian banking system is that it doesn’t impose restrictions over opening corporate or personal accounts for non-residents, which means you can access the two main products Russian banks offer for their clients.
Many businesspeople fear about the state of the Russian economy and the trustworthiness of their banks. As you’ve seen, at least some of that is just sheer sensationalism. Yes, Russia has faced significant financial challenges and woes, but the banking sector is strong, well-established, and reliable.
Moreover, if you’re working with Russian partners, opening a corporate bank account is perfectly safe and will simplify your operations. If you’re still not sure, an escrow agent service is a wonderfully secure first step.
Guess what? In Mundo, through our partners we can provide both services.
But, if you’re not convinced, let’s walk you through some of the benefits you can obtain from a corporate bank account in Russia or our escrow agent services. DOWNLOAD BROCHURE
If you have questions, contact our experts.
Why Russia? Five reasons to open a bank account in Russia
No international taxation
Only Russian-generated income will be taxed in Russia. That means your foreign-sourced income is perfectly safe. Furthermore, your Russian revenues will be taxed at 20 % on both corporate tax and capital gains tax. Those percentages, especially the corporate tax, are significantly lower than in most European and OECD jurisdictions.
Thus, opening a bank account in Russia can help you optimize your taxes and protect your assets.
Secure, thriving banking industry
As we’ve said, the banking industry has continued to grow and produce significant revenues despite the economic hardships Russia has endured recently. Some banks obtain 25 % equity returns per year.
Opening a bank account in Russia isn’t hard, especially when hiring an authorized agency such as Mundo. In most cases, you don’t need to travel to Russia, and the whole process takes around three months. Even better: we use a pre-approval system that simplifies the process even more.
Low maintenance cost
Accounts don’t have minimum deposit requirements for opening the account, nor require a minimum amount you must keep in the account for keeping it working. This is good for those who want an account, but are planning for the long-term, meaning they don’t necessarily have significant operations in Russia.
In Mundo, we aim to protect your legacy and ease your businesses. In a world where authorities are avid to take the money from the pockets of investors, high and mid net worth individuals, the services we provide are more important than ever.
We want to give you a plan to help you protect your investments and create a haven for your assets. Our goal is one and one alone: help our clients to do business and to freely enjoy their lives.
That’s why we provide plenty of financial and citizenship services working along with the best experts in those areas.
For many investors and businesspeople, it can be tough to open accounts in foreign countries, and their home countries are not mainly known for being safe guardians of their assets.
Therefore, we provide them with a wide array of services regarding opening corporate bank accounts all over the world, and one of our favorite jurisdictions is, by far, Russia. We can open corporate bank accounts for our clients in some of the best banks in the country, including its largest bank.
Likewise, considering the financial sanctions that have been imposed over Russia, if you’re working with Russian investors or have Russian clients or providers, you may be having a hard time paying for their services or receiving payments from them.
That’s why we also offer escrow agent services in Russia for our clients.
How do we do all this? Because in our 25 years of experience we’ve built an unmatched network of experts. That’s why we work with a top service provider in Russia.
Our agent in Russia has plenty of experience as well as great connections, working with some of the most solid, trustworthy, and respected banks in Russia. His high reputation as a banking service provider guarantees a very transparent process, with full legal and procedural compliance.
Our Russian partners are leaded by a lawyer specialized in asset management.
He has fantastic experience helping family offices and high net worth individuals with asset protection and diversification strategies, running Private Investment Funds, and tax planning.
Together with our representative in Russia, Aldemaro Fonseca–an experienced businessman and one of Mundo´s consultants – we protect your legacy and help you optimize your business.
Want to know more about our banking services in Russia? Keep reading.
Corporate bank account in Russia
In Mundo, we can help you open a corporate account in Russia for your company. We offer competitive fees for our customers and full-time support before, during, and after the process. Our fees include:
Providing a representative in Russia for the account opening process
Meetings with the bank and constant direct communication
Filling out all the forms and applications in Russian
Obtention of the foreign company tax number
Organizing translations and notarizations
Answering the clients´ questions or the queries raised by the bank during the opening process.
We work with multiple Russian banks, including the largest bank in the country. This will give you the possibility of quickly receiving money from your Russian clients and clients all over the world.
As we said before, the complete process takes around 3 months. If you decide to go with Mundo’s expertise, we’ll offer you a pre-approval system that improves your chances of success from the beginning.
However, aside from the payment of our professional fees, we require some documents to be able to get a pre-approval as soon as possible:
Bank questionnaire (we’ll send it to you)
Passport copies of all signatories, directors, and shareholders
Service receipt as a proof of residence of the company and of all signatories, directors, and shareholders
Executive summary of the company
Certification of recent Public Registry
Certification of emitted shares
Registry of shareholders, directors, and signatories
What we do for you
Fill out all bank questionnaires, application forms, and check the required documents
Communicate directly with the bank about the process
Submit documents and forms to obtain a foreign company tax number with the Russian tax department
Organize the translations and then notarize the translations with a public notary duly authorized by the Russian Federation.
Submit the final application and set of documents to open the bank account
Provide regular updates regarding the application processing
Technical support and assistance with any other inquiries the client may make and questions made by the bank.
Our partners are authorized agents in Russia. Thus, you must issue a power of attorney to one of our partners in Russia to legally represent your company in the bank and complete the opening procedure.
Now, we can walk you through the whole process of opening a bank account in Russia:
We’ll provide you with a pre-approval service. This means that we’ll check your documents, choose the most suitable banks for you among a pool, and send them your documents to ensure you are a viable candidate for them, and they are willing to open an account in Russia. This step may take around fourteen days
Then, we’ll elaborate a full power of attorney that you must sign, so our Russian representative may conduct all the necessary processes regarding opening a bank account.
You’ll need to recollect all the documents the bank may ask for. They vary from bank to bank but are generally the primary documents of your company, and your personal data (and of the directors and shareholders of the company) such as a passport copy, proof of residence, and banking references. All documents must be apostilled, translated to Russian, and approved by a public notary in Russia. This may take from one to two months. We provide all these services.
We’ll present your documents to the Russian federal tax authorities to get a tax number for your company (this takes around 14 days). This doesn’t mean you must pay taxes in Russia, but only that your company is registered in Russia.
Now, we will submit all your documents and forms to the bank, and wait for the final response, which takes around a month.
However, probably, you may not have such an interest in having a Russian account. Maybe you’re keeping your money safe in another jurisdiction. That’s perfectly fine. Perhaps, you’re not ready for such a large-scale operation in Russia, meaning that such an investment for a corporate account may not be too interesting for you. You may not be interested because you just want a safe way to send money to your Russian clients and receive payments for them.
Guess what? We have the perfect solution for you. In Mundo, we also provide escrow agent services.
What does this mean? Pretty simple.
Perhaps you’re an importer of Russian products to your country. Due to the financial sanctions imposed on Russia, maybe getting rubles is not an attractive option for you, or the process of getting the money is too complicated. Maybe, you’re just starting and want a reliable agent to mediate your operation. Likewise, as you only work with a few providers, and your operations aren’t large, you’re not interested in having a corporate bank account in Russia.
What can we do? Well, we serve as a middle-way. We receive the money you’ll pay to your Russian partner, and when you receive the merchandise (or whenever the contract we sign indicates), we’ll release the money to your partner.
In fact, our partners in Russia offer these services worldwide, not necessarily to or from Russia. We can send money to almost any country on the planet. This service is incredibly useful for any international business not being able to receive money directly into their account or finding a tough time sending money to its partner’s bank. You just ask us and we’ll let you know if we can help you with your process as escrow managers.
The process varies from case to case, but in general, we’ll require the invoice of the transaction and a copy of the service contract executed by the parties. Likewise, we’ll determine an adequate time frame for the process to be completed. Depending on the case, we’ll return the money to you, or send it to your Russian partner. Again, it all depends on what´s stated in our escrow agent contract.
As you may see, this is the most simple, reliable, and straightforward way to receive and send payments from and to Russia if you’re starting to deal with Russian partners or are not yet interested in opening a Russian bank account. In fact, as we said before: we can help you with escrow management solutions all over the world.
You just click the contact button and we’ll work out a tailor-made solution for you.
Want to know more about our banking services in Russia?
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