Interview with a specialist in the sphere of international taxation at One World Migration

Post photo

Today, an international taxation specialist at One World Migration, answered topical questions regarding favorable jurisdictions for countries that have fallen under sanctions, as well as convenient opportunities to open businesses and bank accounts in EU countries, the current situation with doing business in Hong Kong and Dubai. In addition, the expert expressed her opinion on the existence and relevance of offshore zones.

-What would you recommend to citizens of sanctioned countries who want to do business and open bank accounts? Which jurisdictions are most favorable for this group of people?

-Firstly, it is necessary to distinguish between both companies and individuals, which find themselves directly subject to sanctions, and those which are within the jurisdiction against which sanctions are imposed (for example, Russia) for the reasons of citizenship or business registration.

For those directly incorporated into sanctions lists, access to global banking is denied. Chinese and Vietnamese banks can be considered to solve such problems with great attentiveness and individual approach to each case.
Russian entrepreneurs who are not on sanctions lists and who are experiencing difficulties in building logistics and financial chains related to Russia can seize such opportunities as:

  • setting up a company in Hong Kong and an account in mainland China;
  • setting up a company in Vietnam and accounts in local banks;
  • establishment of a branch in Kazakhstan and transfer of the business or part of it to Kazakhstan;
  • opening a business in Kyrgyzstan and transfer of part of the operating activities to Kyrgyzstan;
  • setting up a business in Serbia and opening a local bank account.

-Which country is the most favorable in the EU and why?

-Formally, there are no obstacles for investors with Russian passports to register businesses in the EU countries. However, running a business is impossible without opening a bank account. The success of opening an account for a company depends on the availability of grounds for residence – residence permit / permanent residence in one of the European countries or the availability of passport in third countries.

To solve this problem comprehensively, you ought to open a business and acquire residence permit in Hungary. Hungary possesses one of the lowest corporate income taxes - 9%. The taxation of personal income amounts to 15%.

Another opportunity for Russian investors is setting up a company in Cyprus. The basic business income tax rate is 12.5%. Innovative businesses can receive unique tax preferences in the form of a reduction in the tax rate to 2.5%. Investing in a business in Cyprus is the grounds for obtaining a residence permit, and it opens the way for opening corporate and personal accounts in Cypriot banks.
Therefore, Cyprus is a unique platform for companies involved into IT product development.

Simultaneously, setting up a business in the EU does not allow for cross-border business with Russia.

-Can you comment on the present situation with business in Hong Kong?

-The uniqueness of Hong Kong for Russian market is that it's one of the few traditional international trade centers that is not incorporated either in the list of foreign states and territories that commit unfriendly acts against the Russian Federation, Russian legal entities and individuals, or in the list of states and territories that provide preferential tax treatment and (or) that do not provide for disclosure and provision of information during financial transactions (offshore zones).

Setting up a business in Hong Kong and maintaining it aren't considered to be complicated. These procedures are simple and based on the principle of minimal government interference into commercial activity.

The legislation is underpinned by the English law.

Taxation rests on the territorial principle, which means that profits earned outside Hong Kong and not related to activities in Hong Kong are exempt from corporate income tax.

There are no indirect business taxes such as VAT and sales tax.

-What is the current situation like in terms of business in Dubai?

-Business registration in the UAE is one of the easiest, most affordable ways to obtain visa. It allows you to open a bank account in local banks, both for a company and for an individual. It is worth noting that Russian passport complicates the procedure of opening a bank account for an investor. If the investor has a residence permit / permanent residence permit / a second passport, this can significantly facilitate the process of opening a bank account.

Despite the fact that the UAE is a "friendly" jurisdiction, UAE banks have recently significantly limited conducting transactions with Russian counterparties.

Still, the UAE remains a convenient platform for global trade and re-export thanks to open economy (you can start a business with 100% foreign participation), low taxation on businesses, absence of taxes for individuals, as well as the widespread implementation of digitalization into bureaucratic procedures.

-What do you think about historically famous offshore zones such as the British Virgin Islands, the Cayman Islands, etc.? Do any alternatives to them exist now?

-Coordinated international tax rules and information exchange between countries have created conditions under which the use of offshore companies in such traditional tax havens as the British Virgin Islands, Bahamas, Seychelles and others is becoming very difficult or even impractical.

Now we can say that there is not any alternative to offshore companies, in their traditional sense, since the principal goal of international actions is to eliminate unfair tax competition and prevent the erosion of the tax base of multinational corporations.

It is worth speculating on how already existing tax havens can be used.

For instance:

  1. Registration of vessels and yachts – British Virgin Islands, Panama, Marshall Islands;

  2. Obtaining a license for crypto operations – British Virgin Islands, Cayman Islands;

  3. Obtaining a passport or residence permit.

Back to the blog

Another articles

Flooding in the UAE in 2024 - current situation
Flooding in the UAE in 2024 - current situation

The article provides an overview of the situation caused by the floods, including the measures taken by the government to deal with the disaster, as well as the current state of affairs in the affected areas.

Flooding in the UAE in 2024 - current situation
UAE - hotels, prices and a small overview
UAE - hotels, prices and a small overview

In this article we will offer you an overview of the best hotels in the UAE, understand the price categories and give you some tips to make your stay in these amazing places as comfortable and memorable as possible.

UAE - hotels, prices and a small overview
Sightseeing in Switzerland - what to visit first
Sightseeing in Switzerland - what to visit first

Prepare for a journey through castles, museums, unique nature reserves and other places, each with its own unique history and beauty.

Sightseeing in Switzerland - what to visit first
Choose the best option

Citizenship programs

All programs
Grenada Grenada
from $150,000
3-6 months
Obtaining Grenadian Citizenship by investment program grants the right to live and work in Grenada at all times, the right to vote in elections and all rights associated with membership of the Caribbean Community (CARICOM).
Learn more
Turkey Turkey
from $400,000
4-6 months
Cosmopolitans can get a second citizenship for investing in the country's economy from $400,000. There are five options to choose from: buying real estate, investment fund shares or government bonds, participating in the fixed capital of a Turkish company, opening a deposit in a Turkish bank.
Learn more
from $15,000
2+ weeks
Majestic skyscrapers, luxury hotels and shops, beaches and summer all year round. Building a business career in the UAE is prestigious.
Learn more
Discover new opportunities
For more information, the cost of services and an appointment for a personal consultation, please contact the company's representatives
Start applying for citizenship
Discover new opportunities