The classification of Mundo Offshore is in essence an index of freedom with which our team of experts evaluates countries through a combination of indicators that include personal security, financial and business freedom in the face of high tax burdens and state interference, in special, before socialism and communism.
Political stability (absence of socialist and communist tendencies): 7.5
The basis of Russian political stability is the national consensus and the general desire of the population to increase their well-being. Although the country continues an evolutionary transition from the communist regime to the market economy, the general development vector is linked to liberal values in its classical understanding: the protection of private property, freedom of religious ideas and beliefs, and the right to privacy. These freedoms can be limited only by reasonable national security interests, since a country that occupies a territory of this magnitude, with a considerable population and great natural wealth, is obliged to play an active role in international affairs.
In Russia there is a communist party with parliamentary representation, but its political ideals do not attack the liberal foundations of the state and is similar to the moderate social-democratic ideology. In the field of business, Russian communists focus on the Chinese model, so you can see big businessmen among their ranks. Consequently, the party often advocates freedom of action in regard to corporate social responsibility. In any case, the role of this party in the political life of Russia is insignificant, since it is always in opposition and there is no need for the center-right party that governs Russia to form an alliance with them, even for the sake of gaining a constitutional majority.
The negative factor that reduces the Russian rating in this area is that the state's participation in Russia's economy is substantially high. However, it is a reasonable measure in the context of a market system that has not yet been fully purified and is considered anomalous by the state itself. Therefore, the majority of companies with state participation are managed according to market rules and participation in them actively attracts foreign capital, which ensures the implementation of international standards that guarantee transparency in the management of these companies.
During the thirty years of free market in Russia, there have not been more than 10 cases of state expropriation or interference in the business of foreign investors. According to the Russian authorities, all processes were related to fraudulent acts or to participation in corrupt schemes and embezzlement of funds from the state budget. In all cases, a criminal investigation and trial was carried out. In addition, all incidents were actively covered by the press and openly discussed.
Personal security: 9.5
Among the positive characteristics of Russia is the high level of domestic security, notable for many foreigners. The times of the "Russian mafia" have been relegated to the memory of a remote past and nowadays you can walk quietly through the streets of all Russian cities at night. In addition, security in Russia is omnipresent. There are no ghettos or neighborhoods separated by ethnic minorities in the cities, so you will feel as safe on the outskirts of the city as in the center.
The main emigration to Russia comes from countries that were part of the Soviet Union and, previously, from the Russian Empire. Therefore, the general level of education (maintained by the USSR), cultural proximity and common history contribute to the rapid integration of immigrants and the absence of criminal ethnic groups.
And, of course, the status of a foreigner will contribute to your safety. In the event of any conflict (for example, a traffic accident), the Russians will be more attentive to you than to their own countrymen.
Moscow and St Petersburg represent the world most exciting vibrant and dynamic cities with some of the best (and least expensive) nightlife, restaurants and big city living Real estate opportunities in the world today. If you are a foreigner and wishing to immerse yourself in Russian adventure and Culture (beautiful theatres, beautiful nightlife, beautiful women) you will be treated like royalty. Russia wants foreign investors and foreigners and is bending over backwards to attract them. it is the world’s bets kept secret for immigration residency and lifestyle -low taxes, an anti-socialism, no riots , and if you are a foreigner no big brother -Russians don’t care what you do or who you are as long as you are not a spy.
Russia also has an interesting class which no longer exists anywhere else in the world. They call this class the intelligentsia -meaning as you guessed highly cultured and educated people who are writers, musicians and poets. St Petersburg is the world´s capital for the intelligentsia and you will see more theatres, poetry clubs, chess clubs, bards and writers associations than anywhere else. In fact, in Russia you will experience Tango at a far higher level than in Argentina, French Food far better and cheaper than in France, theatre far better and cheaper than in London and as many art galleries as Paris.
Russia brought Hollywood, Silicon Valley and indeed culture to the United States, and many other countries through the soviet policy of exterminating the intelligentsia, now Russian intelligentsia have a renaissance. If you want to experience intelligent people and give your children access to a world that Mundo considers one of the most educated places in the world -Come to St Petersburg.
Russia is a very urbanized country. In addition to having the two largest metropolises in Europe, Moscow and St. Petersburg, in Russia there are another 14 cities with a population of over one million inhabitants. Yekaterinburg, Kazan, Krasnodar or Samara rival the two Russian capitals in terms of accommodation and quality of services. On the other hand, despite the fact that Moscow and St. Petersburg are two unrivaled cultural leaders, all other major cities have a rich cultural offer and a level of service comparable, and often superior, to the European standard.
A distinguishing feature of most important cities is that they are located in large areas and integrated with nature. Most people have, in addition to their urban housing, residences in the countryside called “Dachas”. In these residences people spend weekends and summer periods and are engaged in gardening and active leisure. Russians are hugely fond of hunting and fishing, as well as extreme sports, and this is not surprising at all: Russian nature is perfectly suited for it. The numerous mountain ranges offer excellent opportunities for mountaineering, river descent and for the love of alpine skiing and winter freestyle. If you are passionate about sailing, you can choose between the cool Baltic Sea, the Black Sea to the south or the Pacific Ocean. And if you want a real adventure, visit the North Pole in an atomic icebreaker. Unfortunately, Roscosmos has stopped the space tourism program in recent years, but there are plans to restore it.
Russians not only enjoy nature and extreme sports; all its cities have a complete offer of traditional entertainment, and its restaurants, pubs and discos are always full of pleasant people.
Russia is a mecca for foreign investors. Special regimes for foreign companies having accounts in Russia along with special freezone regimes in Kaliningrad, mean that Russia can effectively become as interesting as any offshore fiscal paradise. For personal investment Russia's general fiscal policy is quite attractive. In addition to low taxes on personal income and residents' dividends (13%), there are a large number of tax benefit programs for investors in the areas of production and services, as well as preferential tax regimes for the median and small business. The level of social taxes is moderate, especially for employees with the highest salary and, in addition, there are opportunities to reduce it. The existence of corporate tax and the complicated VAT refund procedure in foreign trade operations negatively affect our rating.
Investment potential: 7.5
Russian oligarchs invest overseas due to political issues and tensions with their government. These fears have in effect stopped many Russians from reinvesting into their own economy. However, fear of nationalization and confiscation of assets do not apply to foreigners who have much more protection from the Russian government then investors in Latin America, the united states and Europe. In fact Russians bend over backwards to please foreign investors. Due to the huge pool of educated and even super educated and reliable workforce in the major cities coupled with numerous opportunities for medical, port, construction , and small business opportunities such as tourism restaurants and manufacturing, Russia is certainly a potential dynamo for foreign investment. The low ruble make investment highly profitable and safe. There are so many ways to make money in Russia that Mundo could write a book about it. In fact, we will.
A significant problem to keep in mind when investing in Russia is that there is already a huge amount of money in circulation thanks to foreign trade and the attractiveness of state financial instruments. Therefore, Russia is not interested in financial investments and service revenues, but instead desires the arrival of foreign investors who invest in real and tangible projects in the areas of production and services. In 30 years of market economy, the population has not yet accumulated sufficient skills to improve the efficiency of the internal economy, which is a brake on development. Although in Russia you can easily find highly qualified workers for your company, doing so in the areas of administration and management can pose serious problems. Although this dilemma has less relevance in larger cities, the lack of management experience in provincial cities can be fatal for your investments.
Therefore, many foreign companies resort to expatriate services when opening a business in Russia. However, the Russians learn and adapt to the business vision quickly, thus, after two or three years of work, some Russian employees may perform flawlessly in an administrative position.
Taking into account this issue, as well as other problems arising from the transition from a planned state economy to the market economy, the state actively promotes the arrival of foreign business to Russia, granting it significant benefits and creating special conditions for the implementation of projects necessary for the country. However, given that these benefits extend to individual territories and projects, the businessmen who receive them gain important competitive advantages that can be considered as a "lax control" of the state over business. Another negative fact is that the state strictly controls the banking sector and the real estate market in order to avoid speculative bubbles.
One last thing you must know if you invest in Russia: the country is not interested in your investments, but in you personally, in your talent and business experience.
TOTAL: 42,5 out of 50, Rating: AAA
- Country Business briefing
- Business forecast or why Mundo Offshore loves Russia
- Mundo Offshore´s Freedom Index:
- Expat living in Russia
- Residence and nationality in Russia
- Tax Residence
- The Russian banking system
- Russian Special Economic Zones
- Kaliningrad Special Economic Zones
- Russian corporate structures
- Investment in Russia
- Investment funds in Russia
- Tax structure in Russia
- Creating a family office in Russia
- What types of business opportunities can be found in Russia?
Открыть Счёт в Банке
Получить Финансовую Лицензию
Создать Свой Семейный Офис
Поделитесь с Нами Вашими Задачами