Offshore assists in attracting capital

Experts differ in assessing the idea of creating an offshore area in the Far East of Russia. Some believe that the time of tax havens is passing, while other assert the opposite, stating that offshore areas are enjoying an increase in demand on the part of businesses. Economic analyst Valery Emelyanov of Vesti FM comments on why it is difficult to create an offshore area, let alone get rid of one.

An offshore area is analogous to a free economic zone; however, it is created for financial institutions rather than manufacturers. Capital in offshore areas is taxed at low or zero rates on income from investments, and they also have minimal supervision for monetary operations in the market. As a rule, the laws in these areas are extremely simple and understood even by foreigners; and the process to set up a business in simplified, while clients and investors are protected by bank secrecy and similar rules. This regime attracts over ten times the amount of capital versus the real sector. However, creating something similar within the scope of a large country with a large economy in practically impossible, explains Ivan Korolev, an associate at Art de Lex, as reported on the website of Vesti FM