Russian offshore myths
What you need to know about offshore in order to protect your assets and increase them: we reveal the myths of offshore legislation and recommend what needs to be done to preserve own funds and develop personal potential.
In 2019, perhaps, only someone who does not know how to read does not know what offshore is. However, you need to start with the terms. Therefore, in this article, offshore refers to countries that have tax privileges for foreign companies. In this regard, there are such comments:
in this sense, we do not consider countries that have low tax rates for domestic residents in certain sectors of the economy (for example, in agriculture in most countries),
when we talk about offshore, we understand exactly the countries that have tax privileges for foreign companies, to one degree or another,
by offshore companies, we mean foreign companies controlled by Russians or foreign citizens (hereinafter – CFC), i.e. exactly as defined in Russian law.
I would like to continue by the fact that, despite the fact that the term “offshore” appeared for the first time in the USA in the 50s of the last century, similar methods of improving business activity were used in India in the 12-13th centuries, when landowners transferred their lands the monasteries, which were exempted from state duties and for a small bribe to the monks, received an advantage.
You can also recall the settlement of the United States, when all immigrants from the old world were exempted from paying all taxes for 10 years, and even after that, local fees were ten times less than the fees of continental Europe. This is how primary capital was formed in the USA and Canada, and in this way the first entrepreneurs of the old world were attracted. If this were not the case, then it is possible that these 2 great countries would not exist now, and North America would remain a sparsely populated territory with a backward population living between primitive and tribal societies.
That is why the fact that in the beginning of the 70s some island states began to use to attract at least some capital and funds in their economies cannot be considered anything new. Countries such as the British Virgin Islands, Cayman, Seychelles, Cyprus and others after them simply adapted old ideas into the terminology of British international law. This was done because there was a demand from mobile international capital, which needed tools for transnational activity. And this mechanism was found and began to be actively used.
It’s another matter that the opportunities provided by offshore legislation, especially in the field of protecting confidentiality, began to be used not only to avoid double or even triple international taxation, but also to launder the proceeds of crime. Yes it was, but there are 2 questions:
Who can calculate the ratio of the benefits that the international economy has received from international private investment in various transnational projects using offshore companies and losses from hidden criminal money, which were not confiscated by governments, but returned to the world economy by pure, but private means?
Are the measures of international organizations that organized baiting and the complete destruction of unique, inherently offshore legislation adequate?
These are two big questions that will be dealt with by our descendants, in one form or another, in 20-30 years, when the global economy will slow down in the 10s of the 21st century.
In the meantime, we turn to the myths that are most common at present among Russian citizens.
Myth number 1: Offshore are harmful to the economy of our country and the whole world as a whole
Indeed, it may seem that this is so, because according to some estimates in 2013, offshore funds were concentrated in the amount of up to 32 trillion. USD Who calculated this for the FATF is not very clear, but the amounts are clearly huge.
But why are they harmful to the economy? The fact is that these funds are not deposited in offshore accounts. They are not profitable to keep there. In a real business environment, this is not possible, because money always works. They work in the global economy and participate in the development of various international projects.
Even if the owner of the CFC simply keeps his own funds in a deposit with a Swiss bank, the bank does not store them in gold underground. There is no such. They are used for lending and financing the economic activities of various business projects.
Anything. From state building to the development of science and space flights. This is how this money participates in the global economy. And everyone benefits from this: from the owner of the CFC, to socially disadvantaged citizens, who are assisted by the government redistributing taxes from banking activities.