Getting a Russian residence permit, protecting yourself from sanctions, while maintaining the European format of relations within the company, is quite simple. You need to be able to be in the right place, without fear to master the procedure called “redomiciliation” and have ready free 50 million rubles. In the large maritime business of the North-West, the non-public beneficiaries of a group of companies founded by the former Deputy Minister of Transport Viktor Olersky were the first to do this.
Since the end of January, the owner of St. Petersburg LLC Infotek Baltika (ship servicing) and Paul Rise (sea and river cargo transportation), as well as the Murmansk port operator LLC RPK Nord, has changed jurisdiction. Instead of the Cypriot Nelbery Investments Limited, they now belong to the Russian Nelbery Investments Limited, which has the status of an international company, which is rare for Russian business. In the Unified State Register of Legal Entities, it is written: “MCOOO Nelbury Investments Limited.” She owns a business with a total revenue for 2021 of about 11 billion rubles.
The Russian MCOOO Nelbury Investments Limited owns 100% of Infotek Baltika and 66.67% of Pauly Rise, which have 4 subsidiaries in St. Petersburg, the Krasnodar Territory and the Murmansk Region. The founder of both companies is the former Deputy Minister of Transport of Russia (2009-2018) Viktor Olersky, and the main partner of Nelbury in St. Petersburg is the Deputy Chairman of the Council of the Russian Chamber of Shipping Rishat Bagautdinov. Nelbury also owns 50% of the stevedore of the Murmansk port RPK Nord, which handled 20.8 million tons of cargo in 2022 – 37% of the turnover of the entire port. The company specializes in transshipment of crude oil. Until the end of January, all this business was owned by Nelbery from Nicosia, Cyprus.
MCOOO “Nelbury Investments Limited” was registered in Kaliningrad on January 10th.
The company went through the process of re-domiciliation – a change of jurisdiction and address. According to Alexander Arbuzov, partner and head of the St. Petersburg office of the consulting company ALTHAUS, maintaining the status of an international company when changing jurisdiction from European to Russian gives interesting advantages.
– The “tenacious paws” of foreign government agencies no longer have power over such a company, its activities are regulated by Russian law. At the same time, the charter of an international company may provide for the application of the rules of foreign law governing the relations of its participants, as well as the rules of foreign exchanges. It turns out that the company will be in Russia, its litigations will be considered in Russia, and the corporate rules for the relations of participants will remain the same as they were in the country of origin, in Cyprus in this case. By the way, this is not a cheap pleasure – the minimum investment required to obtain the status of an international company is 50 million rubles, – says the lawyer.
Data on the owners of the Russian “Nelbury” in SPARK is not available. The Federal Tax Service closed them after the introduction of international sanctions against Russian shipowners.
Sergey Glandin, a partner at the NSP law firm, regards redomiciliation as one of the ways to secure assets.
– The change of foreign jurisdiction to the Russian one will not in itself affect the application of international sanctions against the company that has undergone this procedure. But she will be able to open an account in a Russian bank without any problems, and the money on such an account is not afraid of sanctions. In addition, Russian registration will, to a certain extent, protect foreign assets from seizure. The procedure for the seizure of foreign assets of a Russian company is more complicated than the procedure for the seizure of assets of a foreign company with Russian beneficiaries, the lawyer says.
Before the emergence of Nelbury, this business group had no interests in the Kaliningrad region, but its registration there is hardly accidental. In Russia, there are two special administrative regions created for companies “returning” to the country. One of them, called Oktyabrsky Island, is located just in Kaliningrad. In fact, this is a Russian offshore, where tax benefits, administrative bonuses and preferences are available for companies that have undergone the redomiciliation procedure as part of the status of foreign currency non-residents. The only condition is that they must invest at least 50 million rubles within a year after registration in the region’s economy.
The general director of the Russian Nelbury, Igor Giro, did not talk about the company’s plans, but confirmed that Nelbury is a resident of the Oktyabrsky Island SAR. In what the company intends to invest the 50 million necessary for the status of a resident of the SAR, according to the top manager, has not yet been decided.
Today, Nelbury and Viktor Olersky are legally connected only by the cruise business. Her partner at Pole Rise, Deputy Chairman of the Council of the Russian Chamber of Shipping Rishat Bagautdinov, together with the former Deputy Minister of Transport, owns shares in Vodokhod Travel Services LLC, a St. Petersburg company specializing in water tourism.
In Murmansk, Nelbury’s partners are Yevgeny Orlov and Gleb Frank, well-known in the fishing industry. They are the beneficiaries of RPK Nord LLC, a major operator of the port of Murmansk. According to SPARK, the revenue of this company for 2021 exceeded 4.1 billion rubles. Gleb Frank Forbes calls the son-in-law of billionaire Gennady Timchenko and draws attention: the United States, Canada and Japan have imposed sanctions against Gleb Frank and his wife Ksenia. So the change of the foreign jurisdiction of the partner to the Russian one can be important for him.
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The Ministry of Economic Development noted a threefold increase in company relocations to special administrative regions (SAR) in 2021-2022. Of the 125 companies that redomiciliated by the end of December and settled in such areas, 109 registered on Oktyabrsky Island in Kaliningrad. In total, there are two SARs in Russia – the second is located on Russky Island in Vladivostok.
The largest residents of the SAR are subsidiaries or holding structures of the international groups UC Rusal, Uralchem, PIK, the Sodruzhestvo agricultural complex, the Yandex Fund, Gazprombank, Sovcombank, and Lenta. Amendments to the Tax Code, improving the ATS regime, were submitted to the State Duma on March 10 last year – almost immediately after the introduction of sanctions against Russia. They opened access to the mode for more “young” companies created before March 1, 2022. Initially, the possibility of redomiciliation was provided only for organizations created before 2017. The main incentives for the ATS are to reduce income tax to 5% on income received and to 10% on income paid by the MHC (dividends, interest and royalties). The reduced rates will remain in effect until 2036.