Russian companies change Cypriot jurisdiction because of sanctions

More and more Russian companies are changing Cypriot jurisdiction due to expanding sanctions, Kommersant writes.

In Cyprus, which for a long time was the main offshore “piggy bank” of Russian business money, at least ten large Russian companies have left or are planning to leave. Among them are TCS Group (head company of Tinkoff Bank), Ozon marketplace, Fix Price retailer and United Medical Group (holding company of the European Medical Center).

Some choose for re-registration Kazakhstan, the UAE and other countries that are not included by the Russian authorities in the list of “unfriendly”. Others are moving to the special administrative district (SAR) of Russia in the Kaliningrad region, which was created “to attract foreign business and investments from foreign jurisdictions.”

According to Kommersant interlocutors, the main reason for the departure of companies is the constant expansion of sanctions against Russia in response to its invasion of Ukraine. Sanctions complicate transactions between subsidiaries and parent holdings. Countersanctions from Russia, which limit, for example, the payment of dividends, also have an additional effect.

As for Cyprus specifically: in the spring of 2023, an investigation into the Russian presence on the island was launched, and 29 cases were opened against companies and individuals who helped Russian businessmen evade sanctions. In December, US FBI agents came to Cyprus to assist in the investigation.