An expert spoke about the main benefit of Russia's special administrative districts
The main benefit of special administrative districts (SADs) is that very different rules apply to businesses, which ultimately allows them to earn more, Kirill Baranov, a member of the Russian Chamber of Commerce and Industry's Council for Financial, Industrial and Investment Policy, and a senior researcher at the Center for Research and Expertise of the Financial University under the Government of the Russian Federation, told Izvestia on January 16.
"Despite the fact that big business traditionally uses ATS to optimize taxes, granting such substantial tax breaks ultimately has a positive effect on the economy, increasing tax revenues," Baranov explained.
According to him, according to the data of the Federal Tax Service of Russia for 2023, tax payments for two ATS (Russky Island and Oktyabrsky Island) reached 24 billion 851 million rubles. The total volume of tax payments in 2018-2023 amounted to more than 38 billion 492 million rubles.
The specialist noted that the direct benefit for SAR residents is tax benefits, including determination of the tax value of shares/shares of subsidiaries at the market level as of the date of redomiciliation to the SAR, prohibition of tax audits in the Russian Federation for tax periods prior to redomiciliation, significant exemptions from the income tax base, exemption of CFC profits at the MCC level as a controlling person and preferential tax rates on dividends.
"The essence of Russia's special administrative districts is that for companies that are registered in these areas, different rules may apply than those for everyone else," Baranov said.
The expert stressed that ATS residents have the ability to introduce a regime of confidential management and ownership of companies, in which information becomes inaccessible, to set the nominal value of shares in foreign currency, as well as to organize a general meeting of shareholders, according to the rules of the foreign registrar.
"Starting from 2022, the Ministry of Economic Development is actively improving the legal and regulatory framework governing ATS. This is necessary to create favorable conditions for the ever-increasing number of residents. We can say that the state is urgently liberalizing the requirements for ATS residents, simplifying the requirements for "relocation" from foreign jurisdictions and the requirements for making investments in Russia," Baranov concluded.
Earlier it was reported that by the end of 2024, 488 companies were registered in ATSs, including 379 residents on Oktyabrsky Island (Kaliningrad Region) and 109 on Russky Island (Primorsky Territory), the press service of the Ministry of Economic Development told Izvestia. In just one year, 190 participants moved to "Russian offshore centers" from foreign jurisdictions, and their total number increased almost 1.5 times.
