Safest and best tax jurisdiction for Russian IT company?

[DavidS]

With uncertain future and sanctions which would be best offshore jurisdiction for Russian IT company to register at?

In terms of tax wise and stability.

How is Hong Kong, Malta...any other ideas?

Preferably tax efficient a well.

 

[bibing]

I would avoid EU as they might limit Russian owned companies.

If I were you I would go for Hong Kong or UAE

 

[DavidS]

I would avoid EU as they might limit Russian owned companies.

If I were you I would go for Hong Kong or UAE

Hong Kong is probably cheaper, right?

 

[Marzio]

How is Hong Kong, Malta...any other ideas?

If you are in the IT field the best opportunity for you is to run a VZP in Georgia.

 

[khinkali]

If you are in the IT field the best opportunity for you is to run a VZP in Georgia.

This can true depending on the type of IT and especially whether the development is done in Georgia (if not then VZ doesn't apply). Also Georgian banks don't like to maintain accounts for offshore companies even if registered in Georgia.

Hong Kong might be a good option as Beijing are unlikely to want Western sanctions to apply to any part of China. USD, GBP, EUR issues would apply globally.

 

[bibing]

Hong Kong is probably cheaper, right?

Yes

 

[avalanche]

This can true depending on the type of IT and especially whether the development is done in Georgia (if not then VZ doesn't apply). Also Georgian banks don't like to maintain accounts for offshore companies even if registered in Georgia.

Hong Kong might be a good option as Beijing are unlikely to want Western sanctions to apply to any part of China. USD, GBP, EUR issues would apply globally.

Do you know any solid remote banking options for HK company? (aside from obvious Neat and Wise)

 

[Marzio]

This can true depending on the type of IT and especially whether the development is done in Georgia (if not then VZ doesn't apply). Also Georgian banks don't like to maintain accounts for offshore companies even if registered in Georgia.

I don't get the point with Georgian banks, if the company is registered in Georgia is not an offshore company.

HK could be an option too if you are not pulled off by the yearly mandatory audit.

 

[khinkali]

Do you know any solid banking options for HK company?

Sorry I don't have experience with HK banks.

I don't get the point with Georgian banks, if the company is registered in Georgia is not an offshore company.

Georgian banks cater for Georgian based businesses. The place of company registration is not the issue; they want to see your real location. Your office, your workers, your suppliers and customers. Otherwise Georgian banks would easily be laundromats for elicit money from neighbouring countries and risk losing access to SWIFT and USD.

Similarly the Revenue Service is strict about Virtual Zone status being applied to businesses that do their development in Georgia. Else the VZ would become an offshore tax avoidance scheme which upsets OECD etc.

 

[avalanche]

Georgian banks cater for Georgian based businesses. The place of company registration is not the issue; they want to see your real location. Your office, your workers, your suppliers and customers. Otherwise Georgian banks would easily be laundromats for elicit money from neighbouring countries and risk losing access to SWIFT and USD.

Sounds like exactly something what launderers would do: set up real office with employees and customers. And inject dirty capital.

 

[khinkali]

Sounds like exactly something that laundromats do: set up real office with employees and customers. And inject dirty capital.

Very true. But then the bank gets to say "we did our diligence". I doubt many of us here believe that FATCA or similar measures supposedly relating to 911 actually stop powerful crime networks. They are effective at frustrating the smaller fish.

Will there be new measures supposedly in response to events in Ukraine? Definitely. Who will they affect? Probably not powerful oligarchs of members of government who have plenty of options.

 

[bibing]

I doubt many of us here believe that FATCA or similar measures supposedly relating to 911 actually stop powerful crime networks. They are effective at frustrating the smaller fish.

So true, they are ineffective considering most of the time the true criminals have "diplomatic immunity"

 

[ElBotellon]

Sorry I don't have experience with HK banks.



Georgian banks cater for Georgian based businesses. The place of company registration is not the issue; they want to see your real location. Your office, your workers, your suppliers and customers. Otherwise Georgian banks would easily be laundromats for elicit money from neighbouring countries and risk losing access to SWIFT and USD.

Similarly the Revenue Service is strict about Virtual Zone status being applied to businesses that do their development in Georgia. Else the VZ would become an offshore tax avoidance scheme which upsets OECD etc.

VPZ in theory did not require any presence in the country.

Do you have direct info about the approach of revenue service on VPZ? because in case of disputes with the revenue service the risk is to move from 0% to 20% of taxation which is a huge difference. Based on your experience which level of personneel, offices, etc... and salaries vs revenues is considered acceptable?

 

[JohnnyDoe]

I don't get the point with Georgian banks, if the company is registered in Georgia is not an offshore company.

HK could be an option too if you are not pulled off by the yearly mandatory audit.

I got horrible experiences with Georgian banks, especially TeraBank. I had accounts with them for my Georgian company. It took me 1+ year and lawyers to get the money out of that shithole.

 

[khinkali]

Do you have direct info about the approach of revenue service on VPZ?

There is an official announcement from the Revenue Service which is in Georgian.

In English there is a good description of what happened from TP Solution and also some discussion from BM on the differing view of the Government vs their own. expathub have an "Important Changes" section.

VPZ in theory did not require any presence in the country.

Where did you find this theory? I say the opposite; the Revenue Service in practice had been lenient in the past but the therory is based on the original law which supports the RS's new view.

Note that the new approach is consistent with those in other places, such as "patent box" and "IP box" regimes in other countries - the tax break applies to locally developed IP.

The reason people were upset is that the Revenue service suddenly implemented this change of approach retroactively and wants to apply it to previous tax years without warning.

Based on your experience which level of personneel, offices, etc... and salaries vs revenues is considered acceptable?

It's not my personal experience, just experience of others and announcements from the Revenue service, tax auditors and lawyers in Georgia.

My understanding is that it is the amount of the year spent in Georgia, by the people who develop the relevant IT products/services. This includes the owner if the owner is involved in the IT development. For this type of issue it is a good idea to consult a tax auditor or layer in the country.

There is a new IT Company regime which might work better for an offshore IT related company that has been established for 2+ years.

 

[Marzio]

I got horrible experiences with Georgian banks, especially TeraBank. I had accounts with them for my Georgian company. It took me 1+ year and lawyers to get the money out of that shithole.

I've read as well enough horror stories to know that you have to bank with an EMI and use Georgian banks only to pay taxes in GEL

 

[ElBotellon]

There is an official announcement from the Revenue Service which is in Georgian.

In English there is a good description of what happened from TP Solution and also some discussion from BM on the differing view of the Government vs their own. expathub have an "Important Changes" section.



Where did you find this theory? I say the opposite; the Revenue Service in practice had been lenient in the past but the therory is based on the original law which supports the RS's new view.

Note that the new approach is consistent with those in other places, such as "patent box" and "IP box" regimes in other countries - the tax break applies to locally developed IP.

The reason people were upset is that the Revenue service suddenly implemented this change of approach retroactively and wants to apply it to previous tax years without warning.



It's not my personal experience, just experience of others and announcements from the Revenue service, tax auditors and lawyers in Georgia.

My understanding is that it is the amount of the year spent in Georgia, by the people who develop the relevant IT products/services. This includes the owner if the owner is involved in the IT development. For this type of issue it is a good idea to consult a tax auditor or layer in the country.

There is a new IT Company regime which might work better for an offshore IT related company that has been established for 2+ years.

thank you very much for your comprehensive explanation. very much appreciated.

 

[CaptK]

I can tell you for now UAE has no issues with Russia. Bank accounts are being open for Russian clients some activities like oil and gas maybe harder but IT is still ok.

I can confirm that as my client has his account approved today.

 

[cuno]

I can confirm that as my client has his account approved today.

he was Russian! Sounds strange after all the hype about SWIFT and restrictions passed towards Russia.

 

[CaptK]

he was Russian! Sounds strange after all the hype about SWIFT and restrictions passed towards Russia.

I applied for a FZ company for his business partner on Thursday. We will find out tomorrow if they issue his license.