Taxation

1.Russia can offer you tax rates comparable with "Offshore Centres"

World Bank figures show a net tax burden on the individual of 13%, less than Cyprus and many other so called "tax havens" so not only can we help you  gain access to one of the worlds largest and fastest growing economies but also through properly structured business and financial operations you can benefit greatly not just in Russia but on income earned in less competitive jurisdictions.
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Formcos-Russia has a leading Russian tax expert to advise on Russian business incorporations and also act on your behalf in the formation of Russian Trusts and other fiduciary or nominee capacities.

We can show how to organise your finances in Russia and how to make this work for you internationally, showing a near immediate return on investment

Government Incentives

2.Russia needs your talent, entrepreneurial skills and experience - government backed grants and incentives are in place to encourage the right skills and investment...

To recognise Russia's potential in the world market place as a provider of not only mineral resources but human resources and as the regional financial centre, many skills are actively being sought from the west.
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A wide range of skills are needed to enable Russia's continued growth in the long and mid-term, though government restrictions are placed upon the amount of foreign ownership of companies in certain industrial sectors, where skills or capital is needed many grants, guarantees and other incentives such as tax relief are being offered.
For example, IT and R&D are 2 key areas Russia wants to expand, therefore the Ministry of Finance have developed a range of initiatives intending to create favourable conditions for the development of innovative activity. Amendments made to the Tax Code exempt services which provide patents and licenses connected with intellectual property in the development of new products from VAT. Organizations working in R&D will also be given the right to apply a special program expediting the amortization of all equipment used in their scientific research. It is also planned to introduce amendments to the Tax Code extending the list of expenses for which companies can reduce from their tax payments. This list will include scientific research and patenting expenses and also proposes to extend the list of scientific foundations which will be permitted to give companies money. Profit tax will not be levied on this money.
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Russia can offer many high-return investment opportunities both in the industrial and service sectors. There are strong incentives for the relocation of the required talents and capital as well as offering good economic growth and minimum risk, furthermore the strategic location of Russia, sharing borders with 14 countries will enable you the freedom to easily access the markets of Europe and Asia.

Contact us and let Formcos-Russia guide you through the start up process and put you in the the best possible position to profit quickly from your move in to Russia.

Growing Financial centre

3. Moscow is the financial hub for the Eurasian super continent and has a 10 year plan to become a world leading International Financial centre with capital markets to rival London or New York...

"The strengthening and improvement of the quality of the national financial system is a most important direction, with the aim to set up a powerful international financial centre in Moscow"
"Nobody has cancelled this task because of the (current economic) crisis: moreover it has made it even more pressing."................. Dmitry Medvedev, June 2009.
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The Russian Federation has a strategic objective of Moscow becoming the second largest financial centre in Europe by 2020. Today Moscow is already the administrative and financial capital of Russia, 50% of the commercial banks are registered there and it is where 85% of all Russian bank assets are held, it is a similar situation in both the insurance and pension savings industries.

The Moscow Interbank Currencies Exchange (MICEX) and the Russian Trading System (RTS) account for 99% of the organised Russian securities market in Russia, 30% of the volumes traded on these 2 exchanges are already being carried out by non-residents.
The RTS provides trading of both equities and derivatives with settlement often available in foreign currencies. FORTS, the futures and options exchange offers 33 futures and 17 options contracts and climbed in to the top 10 out of 52 of the worlds leading derivative exchanges earlier this year based on trading volumes.
The RTS which lists 1100 securities has been the basis of many of the most consistently positive preforming securities funds over the last decade.
Both markets offer robust, state of the art, electronic trading platforms and have major shareholders and commercial partners including Standard & Poor's, Deutsch Bank, UBS and Credit Suisse.
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Even with the economic situation facing the world, forecast growth in the level of national capitalisation in Russia will reach 5.4-5.6 Trillion USD by 2020 making it the third largest capital market in the world behind only London and New York.

Opportunity & Optimism


4. Plenty of certain opportunities  - you might even enjoy our sense of optimism ...

Prime Minister of the Russian Federation Vladimir Putin said:

“Russia is extremely interested in a major inflow of private, including foreign, investment. This is our strategic choice and strategic approach…"

"It is time we clearly determined the economic sectors where the interest of bolstering Russia’s independence and security call for predominant control by national, including state, capital… While maintaining such control and limitations in some economic sectors, we should create favourable conditions for the inflow of private capital to all the other sectors”.
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Russia's economic growth has been very positive without being reckless, incomes have been increasing annually by 9% and GDP has grown over 6% a year over the last five years. The profit margins for foreign business have also improved with more than 80% of foreign companies operating in Russia having seen their revenues grow by over 10%. Substantial reforms have supported this growth and the government have been quick to act in the present economic downturn. Neptune Investment Management founder and manager of the Neptune Russia & Greater Russia fund, Robin Geffen, maintains the view that Russia is the Bric country with the most potential. He believes any move upwards in the oil price to above $55 dollars a barrel is beneficial for Russia’s macro picture, while the government’s quick action in getting liquidity back through the system is proving highly successful. He said: ‘The response by Russia’s government was faster than the UK or the US, which is really paying off. Russia’s employment levels have also stayed high so there has been no cut in consumer spending as a result of the credit crunch. What also makes this country look attractive is that most people believe China will have a V-shaped recovery. With Russia as its next door neighbour, it could be a major beneficiary of that. To make the case even stronger, commodity prices appear to have bottomed out in a number of places, which is again very positive for the Russian stock market."
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The optimism which pervades the Russian Federation today is because most of its people have already lived through an era of really dramatic change and even after shouldering the debts of the former Soviet Union, we have become the fastest growing economy in Europe We can share with you some of the skills and knowledge we have learned about survival under the pressure of totalitarian control and the incompetence of state power. There is only one thing we have neglected so far, which is, the open-heartedness, traditional hospitality and old fashioned values of the Russian people, the respect they have for guests from abroad, and their other personal and professional qualities which have earned the respect and trust of millions of people from all over the world who visit the Russian Federation every year.

Russia has enough opportunities for everyone who is looking for them and Formcos-Russia can guide you through the start up process and put you in the the best possible position to profit quickly.

A Market Place too Big to Ignore

5. Many of the reasons you may be considering for starting a company in the Russian Federation, have, most probably been considered before by other individuals in a similar position.

Below we have listed some of those individuals and companies who have at some point also considered the possibilities for them in Russia and made the move;

Ever since Ingvar Kamprad founded the IKEA in 1943, he has been a true believer in Russia.He travelled to the Soviet Union in the 1960s and became convinced that the country’s massive raw material base and high levels of education made it the obvious production centre for a global furniture company. But politics and economic collapse kept IKEA out of Russia.Since it was founded, IKEA has doubled in size every four years. The biggest problem the company faces is not how to sell furniture, but where to buy it from. IKEA has been sourcing furniture from Russia for more than 20 years, but without a presence on the ground it has been unable to boost the volume much beyond $20m a year.
Having already tried to set up in Russia twice – once in 1988 shortly before the Soviet Union’s collapse and again in 1993 when Boris Yeltsin unleashed tanks in the capital – the first store opened with much fanfare in March 2000 and a second followed a year later. Between them, the two stores, which were aimed at the middle class from the outset, should produce combined sales of $240m this year. They have surprised management by already surpassing IKEA’s western European stores in terms of per-square-metre sales.

The Japanese automotive giant Toyota came to the Russian market at the beginning of the         1990s, when it opened its first official dealer firms here. In 1998 Toyota Motor Corporation opened a representative office in Moscow in order to study the situation in the Russian market and ensure growth sales in the major Russian regions. In 2002 Toyota Motor Ltd., a national marketing and sales company, began its work in Russia, and in 2005 it began construction of its own plant in Russia.The Toyota investment project will help achieve two goals: ensure a high employment level and implement new technologies in the industry. As the Toyota Chairman Hiroshi Okuda points out, “The interest of Japanese car-makers in the Russian economy keeps growing. Along with building a Toyota assembly plant, other Japanese companies are going to implement their projects in Russia as well in the near future”.
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In 1999, the German corporation BMW realized that it had to start assembling its cars in Russia, and it founded the company BMW Russland Trading, a representation of BMW in Russia. In October 1999 the Autotor company, partner of BMW Russland Trading, began assembling BMW vehicles at its plants in Kaliningrad.Today, the 3-series BMW has become the leader of sales in the Russian market among all BMW vehicles, as well as the leader in its segment. The 5-series car sales are also demonstrating growth in Russia.“We generally believe in the importance of producing cars directly in the country where we are going to sell them”, says Christian Kremer, Head of BMW Russland Trading. “This helps us closely to follow the changes in the local marker and provides us with a significant marketing advantage.”
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ZAO CB Citibank, a subsidiary of Citigroup, began working in Russia in 1993, among the first generation of the Russian banks with foreign capital. Today, Citibank is a leading financial institution with 420 employees in Moscow and St.Petersbourg providing services to over 1700 corporate clients.Citibank clients include giants of the Russian economy, subsidiaries of the largest world corporations, and leading banks. Citibank offers a wide range of banking services: from crediting, e-banking, trade financing and currency exchange transactions to derivative financial instruments, hedging transactions, leasing and depositary services.
Mark Robinson, Citibank President, says: “Russia is like the other big markets in which we work. But there is one significant difference: the Russian market is developing much faster. This means that we also have to be moving faster here”.
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The Danone Group is an international corporation, a leading producer of diary products, biscuits and bottled water. In the early 1990s, Danone became active in the Russian market. Fermented milk products have always been popular and in great demand in Russia. Therefore the first Danone store that opened in Moscow on August 14, 1992 became popular very quickly. In 1994, the Danone Group bought the controlling stake of the Bolshevik company, one of the oldest Russian confectionery plants with the production capacity of about 30 thousand tons per year. In May 1995 the first Danone dairy plant in Togliatti began producing Danone yoghurt. In November 2000 Danone opened its second dairy products plant in Russia, in the Chekhov area of the Moscow region.“We arrange our work in every country so that it comprises both economic and social programs. There is no commercial success without social progress, and the other way round” says Frank Riboud, Danone Group Chairman and CEO.
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Tikkurila is Europe’s major paint producer, with production facilities based in 13 countries of the world. To establish production facilities in Russia Kraski Tikkurilla constructed a high-tech plant in the town of Ramenskoe in the Moscow region.Tikkurila offers a full range of high-quality paint materials designated for various uses for a wide range of consumers. The effective production of its materials is ensured by selecting raw materials accurately against the criteria of operational suitability and safety.
Owing to the great efforts of our deals and business partners as well as our own personnel”, says Jannu Paju, Vice President of the company and Director of the Deco Vostok branch, “Tikkurila has become the most famous painting brand in Russia.”
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Nestle has been operating in the Russian market since 1995. This Swiss company, founded in 1866, owns such trademarks as Nesquik, Nescafe, Maggi and others. Its key production assets in Russia are Konditerskoe Obyedinenie Rossiya, Nestle Zhukovskoe Morozhennoye, Altai, Kamskaya, Khladproduct, Vologodsky Zavod and Svyatoi Istochnik plant.
The Company manufactures beverages, ice cream, confectionery,infant food and special food. The company gradually expands its production facilities in the Russian market and strives to become a recognized leader in a number of food industry sectors. This idea has been recently formulated by Hans Gueldenberg, Nestle General Director for CIS, in the newspaper Le Temps: “Currently the Russian economy is growing. It is the right moment for us to consolidate our market stance in Russia”.
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Siemens has been operating in the Russian market since more than one and a half centuries ago. Siemens AG (Berlin and Munich) is a world leader in the field of electronics and electrical engineering. Over 423 thousand people work to develop and manufacture products, design and compose systems and equipment, and provide customer services.In Russia the company has established its presence in thirty regions of the country, and is one of the leading suppliers of products, services, and integrated solutions for upgrading to the key industries of the Russian economy.In the 2004 financial year, the amount of the corporation’s orders in Russia exceeded 1/25 billion euros, its turnover amounted to 1,2 billion euros, and the number of personnel was above 3,5 thousand people. After meeting Vladimir Putin in 2005, the corporation’s head Klaus Kleinfeld said, “The Russian President assured me that Siemens is an important partner of Russian industry and that he supports our further investment in the Russian economy”.
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Hewlett-Packard regards Russia as one of its priority markets. Its operations in Russia are aimed at resolving four strategic objectives: the reinforcement of the company’s stance as a supplier of corporate solutions, production diversification, the increase of regional presence and implementation of specialized regional programs, and the reinforcement and expansion of the company’s partner network.To expand its presence in the regions, Hewlett-Packard develops special regional programs for the promotion of its solutions and developing new business. Such programs are primarily aimed at informing potential customers of the company product and technologies. “We pay much attention to integration projects and the primary objective of our representatives is an increase of the share of the project business in the regions” said Owen Camp, head of the Hewlett-Packard representative office in Russia.
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Cadbury Schweppes has been delivering its products to the Russian Market since 1992. In 1995 it opened a representative office in Moscow and started construction of a Cadbury confectionery plant in the town of the Novgorod region. The plant was commissioned in 1996. The amount of capital investment was $120 m. In 2002 Cadbury Schweppes acquired Dandy, a famous chewing gum producer (Tirol, Timorously and others), which, in its turn had chewing gum production facilities in Treelike Novgorod. As a result of a merger of two plants – Cadbury (chocolate production) and Tirol (chewing gum production)- and their distribution structures in August 2003,Tirol Cadbury was established.

Contact us for a confidential chat about what you would like to achieve.