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Why do Russians want to hide their assets in Europe?

anotherone

Active Member
Because of my job, I had to travel the world. I met lawyers specialized in corporate laws, local offshore agents, virtual office owners, accountants. I crossed paths with many Russian citizens. In Estonia, they wanted to take advantage of E residency to hide their assets and control it from Russia. In Latvia, they wanted to rely on local russian speaking latvians to hide their assets. In Cyprus and bulgaria, many local offshore agents speak russian. They create their own EMI or investment companies in the UK to take money out of Russia.

So many Russians... I have never been to Russia and my question is why so much Russian people try to hide their assets everywhere in Europe.
 

xzars

Entrepreneur
Lessons were learned from the fall of the USSR and its currency that left families in ruin; distrust in the Russian banking system is now being passed on for another generation!

One thing I'd like to correct is that the Baltics are not used for undisclosed wealth storage in any meaningful sums. Russians go to the UK, as you're quite right about, also Switzerland, and Austria for that. There are no other hubs of real Russian wealth in Europe. Also note that the majority of those deposits are disclosed back in Russia and fully compliant.

Now if we add a little bit of dirt to your wealth, then you'll need a transit jurisdiction (optional, but really a must), and an answer to source of funds questions before the wealth can be stored with any peace of mind.

For Russians in particular, that's where the Baltics and the rest of the former USSR comes handy because of the Russian-speaking population.
 

reesek

EU IBANs for everyone!
Silver Member
It is probably the case with all autocracies, no?
Sad
 

Martin Everson

Offshore Retiree
Mentor Group Gold
Elite Member
Would love to hear from some Russian members of the forum :D

I have strong views on this as you may know...lol. But I will keep them to myself. Russian people in my experience are street smart and obsessed with money. For whatever reason they are never comfortable with whatever ill gotten gains they have being held in Russia. There is an entire cottage industry spanning the globe from London to Cyprus to Israel and now Dominica helping Russian move money around the globe. You can find even banks, EMI's, real estate agents, second passport and visa firms and law firms etc etc specialized in assisting mainly Russians.
 

KJK

Entrepreneur
This really sounds like a huge generalization / anecdotal evidence...

1) most people in almost any country, perhaps 90 % of the population will not consider such options because they have other stuff to worry about
2) those who have something to worry about usually worry about two things - a) political stability and b) currency devaluation
You can be a successful businessman and lose everything in a second due to a regime change, this keeps repeating in history again and again.

It doesn't matter if you're from country A or country B. Russians moving their assets into Europe? Yes. The same happens everywhere else.
Chinese moving their assets to Hong Kong or Singapore. Indians moving their assets to some gulf countries. Westerners moving their assets to the east. Easterners moving their assets to the west. Americans to Puerto Rico or Latin America...

Some countries are pretty unstable so it is not uncommon that a citizen of that country will rather have a company in another country and if public, listed yet in another country. Russia is not an exception, perhaps it is more visible if you get to meet these people in Europe but the same thing happens e.g. in China and elsewhere on even larger scale.
 

JimBeam

Active Member
Many Cypriot and even Swiss banks have have staff that speaks Russian (some are even owned by Russians).
In banks in Hungary I've personally seen a lot of Russians.
Dubai Marina is full of Russians.

So you can find them in many countries - trying to stash the money.
My guess is that they do not trust their government (Putin) or that they are trying to hide something they have earned in maybe not so legit way.
So, if shit hits the fan, they have some piggy bank somewhere else and all they need is one way ticket - or at least they will secure their families and kids.

Also, nobody can imagine how the fall of Putin will look like or how will post-Putin Russia look like, and I guess they want to be prepared for that too.

I agree with Martin Everson, there is a whole industry built around Russians and helping them bank outside or get passports.
 

Praetorian

New member
To clarify a few things,

1) Estonia/Latvia are mainly used for complex offshore setups, funnels to render the origins of the funds harder to locate in case of an investigation. A lot of the banks there will never take risks with small players but will break a lot of laws to protect wealthy clients because the risk is worth it to them. They pretend to want compliance but pull up with fat stacks and they'll look the other way. Once a first base is established in the baltics, the funds are then funneled to the main hubs, aka the UK/Switzerland/Austria/Hungary/UAE for investment purposes, mainly real estate.

A LOT of the the russian money there (90%+) is from illegal sources, mainly the proceeds of corruption, tax fraud and other criminal activities, which is why there is a need for money laundering to begin with. The mob is present in those countries but is much smaller than other groups of russians because to access these hubs you need solid contacts and bribery is a lot more difficult.

2) Lithuania is used for fraud and only fraud, the government there is easy to work with and officials can be bribed a lot more easily than other baltic nations. They have banks that don't ask many questions and it's the perfect jurisdiction to invest in ventures that enable money laundering, like opening sketchy EMIs and other laundromat platforms. I never saw russian money that transited through there that was legitimate to begin with. This jurisdiction is mostly used by the mob because it's harder for them to go elsewhere, other groups of russians (Oligarchs, corrupt families, industry magnates, celebrities) tend to avoid it because they can access other hubs like Estonia/Latvia if they want to move dirty funds, they have the contacts that the mob doesn't have.

The money that transits straight from Russia to the UK/Switzerland/Etc is usually clean money that's already taxed and declared, but moved abroad because of distrust towards the banking system and also to protect the individuals that fear they could get on the bad side of the government one day. In Russia, the government can freeze your assets and take everything from you if they see you as a potential threat to them, so politicians, oligarchs, etc move assets abroad as long as they are taxed and declared with the russian government. If one day shit hits the fan, the person can leave the country and move on with their life using their economic citizenship elsewhere instead of losing everything.
 
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