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Cyprus Removed from Russian Black List


As of 31 October 2012 Cyprus has been removed from the Russian blacklist. This allows Cyprus to freely present itself to the Russian market for outbound investments. Cypriot legal entities can now be used for the purpose of investing and paying dividends back into Russia. Taxand Cyprus explains the advantages of being removed from Russia's Black List.

The structure below shows how a Cypriot legal entity can now be used by Russian investors. Some countries with which Cyprus has a double tax treaty (DTT) in place have been chosen for the structure, with the applicable withholding tax rates (WHT) illustrated.

*Relevant EU Directives apply that provide for 0% WHT on dividends, interests and royalties for qualifying companies.

Many third country corporations wishing to invest in Russia can now do so freely using Cyprus while receiving a benefit from its appealing taxation regime.

Discover more: Cyprus removed from the Russian Black List

Taxand's Take

For a country whose economy is closely tied with Russia, the removal from the blacklist allows prosperity and financial growth, which will prove to be a valuable weapon in the hands of Cyprus for the purpose of combating the financial crisis.

The removal of Cyprus from the Russian blacklist is one of the changes that were brought about by the Protocol to the DTT signed between Russia and Cyprus on 7 October 2010.

Your Taxand contact for further queries is:
Boris Lazic
T. +357 22 699 222

Taxand's Take Author