Russian, Ukrainian or FSU Holding Companies

[Manny]

Does anyone know anything about these? My understanding is that Russia doesn't have a specific holding company structure. Does Ukraine? By "Holding Company" I mean a non trading legal entity that can be used simply to legally and privately own stuff anywhere in the world.

How do these blokes like Beresovsky and Abramovich own their yachts and properties around the world? For sure, they don't own them in any personal names. They are owned by a corporate structure; a holding company of some kind.

In the old days, it was Cayman Island, BVI and similar structures that were used. If you had a yacht, it flew the Liberian flag. The mention of all those places are red flags anywhere in the world now. I suspect some non EU, FSU legal entity is in popular use with these people now.

Does anyone know what structure is favoured by monied Russians to own stuff nowadays?

[acctBill]

As of about 2 years ago there wasn't any specific legislation on the books in Russia dealing with holding companies.  However if you do an analysis of large Russian companies you will find that they are setup in the structure of holding companies.  It does make for interesting times in Russian court when the Russian government and a Russian company do battle.  Surprisingly the Russian government doesn't win as often as you would think.  

As for the Russian super rich like Abramovich they are not going to register the ownership of their non FSU properties and yachts in a holding company anywhere near Russia or Ukraine.  Abramovich probably has holding companies in "countries" such as Gibraltar or the Channel Islands or Isle of Man and that's just UK's dependencies.  Monaco is still a legitimate tax haven.  

As for Abramovich's vast wealth, it officially isn't very vast.  According to a mandatory official income declaration he filed for an upcoming parliamentary election in the Eastern province of Chukotka, where he is in line to be a parliamentary deputy, Abramovich owns 16 homes, including mansions and apartments, in four countries, and shares in seven companies, but no yachts nor airplanes.  The declaration also says that Abramovich also holds €84.5 million in cash in 22 bank accounts.  

So officially under the rules of disclosure set by the Russian government Abramovich isn't a billionaire. At best he is worth a few hundred million euros or USD.  Finans magazine in Russia most recent assessment of Abramovich's wealth says he is worth about €13 billion.  A rather large discrepancy between the two assessments.    

http://www.dailymail.co.uk/news/article-1358004/Roman-Abramovichs-vast-wealth-revealed-time.html?ITO=1490

http://www.irishexaminer.com/sport/kfeyojgbaugb/rss2/  

[OlgaH]

As of about 2 years ago there wasn't any specific legislation on the books in Russia dealing with holding companies.  However if you do an analysis of large Russian companies you will find that they are setup in the structure of holding companies.

 "Temporary regulation (polozhenie) on holding companies created through the transformation of state enterprises into joint-stock companies" was signed in 1992 (N 1392) along with the Decree of the President of the Russian Federation “On Measures on Implementation of Industrial Policy in the Course of Privatization of State-owned enterprises" ("Collection of Acts of the President and Government of the Russian Federation" 1992. N 21)  

Actually there is no deference between "corporation" and "holding company" in Russia, and such term as " group of companies" is also used.

ЗАО "Балтимор-холдинг" (ZAO "Baltimore-Holding") is The Close Corporation (ZAO) "Baltimore-Holding" in English
http://www.reminta.ru/partners/show/?id=1


OOO Холдинг-Компания "Межрегионинвест" - Limited liability company (OOO) Holding-Company "Mezhregioninvest" http://www.mri.ur.ru/

Финансовая холдинг компания «Империя» - Financial Holding Company "Empire"  http://www.imperiya-estate.ru/

Холдинг «Щёлковский» - Holding "Schyolkovsky"
http://www.shelkovo.ru/

[Manny]

As for the Russian super rich like Abramovich they are not going to register the ownership of their non FSU properties and yachts in a holding company anywhere near Russia or Ukraine.

Hmm. That's true. Good sense would move them out of the Russian sphere of influence I guess. I doubt the Channel islands or the IOM would be of much use nowadays though.

Actually there is no deference between "corporation" and "holding company" in Russia, and such term as "group of companies" is also used.

Thanks Olga. I suspected it would have been an OOO from what I read. I guess Russia never implemented any structures designed to attract non resident Russians or non resident foreigners to incorporate there then. That may explain why many Russians use Estonian OÜ structures.

[tim 360]

There are well known law firms in London who specialize in helping Russian Oligarchs deploy and move the money.  They have been doing it for years.  Most Oligarchs like London very much.

[OlgaH]

Thanks Olga. I suspected it would have been an OOO from what I read. I guess Russia never implemented any structures designed to attract non resident Russians or non resident foreigners to incorporate there then. That may explain why many Russians use Estonian OÜ structures.

Nowadays the holding companies in Russia are legally regulated by the Federal Law On Joint Stock Companies, together with the Civil Code. During 3 years Russian Duma drew up "The Federal law on holding companies" project that was passed by Duma in 1999 and approved by the Council of Federation in 2000.  In 2001 the project was turned down by the president, because the legal definitions, the economical and juridical purposes of the holding companies and also regulations weren't determined clear as it should be, and there were too many indistinct terms, provisions, regulations and what ever else in the project. The project was too general and looked more like the runaround with just 12 articles in the last version, and actually could not be realized at all.  In 2002 the project was turned down again and even withdrew.

A holding company can be OOO  or ЗАО or OAO  

Comparative description of foreign business forms in Russia
http://www.avesta-bc.ru/files/61.pdf