Setup to work with Russia/Israel/EU

[Serni]

Hello, I am Israeli citizen and I am looking for some stable setup for the trading business in euro/USD/yuan between Russia, EU, Israel, etc.
I have the Scotland LP with the bank account in Russia but since 24.02.2022 it isn't workable anymore - I can't transfer any assets outside of Russia.
So for the last 15 months I am constantly looking for some solutions:
1) To open the bank account for the current company in some neutral country like Serbia or Kazakhstan - it costs a lot of money and there is no guarantee the scheme will work after some time
2) To open the new company. I was thinking about UAE, but it's expensive and they have very limited possibilities with the transfers to Russia.
Now I've got the new offer to open the company in Hong Kong with the bank account in the China mainland.
What do you think about this option? Probably some other advises?
Thank you.

 

[Martin Everson]

Serni said:
Now I've got the new offer to open the company in Hong Kong with the bank account in the China mainland.
What do you think about this option? Probably some other advises?
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If the option is available use it. But I guess bank will just offer you access to Chinese offshore Yuan right?

Serni said:
I have the Scotland LP with the bank account in Russia but since 24.02.2022 it isn't workable anymore - I can't transfer any assets outside of Russia.
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Are you saying you cannot send Chinese Yuan outside Russia or there is some other issue?

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[jafo]

Serni said:
Hello, I am Israeli citizen and I am looking for some stable setup for the trading business in euro/USD/yuan between Russia, EU, Israel, etc.
I have the Scotland LP with the bank account in Russia but since 24.02.2022 it isn't workable anymore - I can't transfer any assets outside of Russia.
So for the last 15 months I am constantly looking for some solutions:
1) To open the bank account for the current company in some neutral country like Serbia or Kazakhstan - it costs a lot of money and there is no guarantee the scheme will work after some time
2) To open the new company. I was thinking about UAE, but it's expensive and they have very limited possibilities with the transfers to Russia.
Now I've got the new offer to open the company in Hong Kong with the bank account in the China mainland.
What do you think about this option? Probably some other advises?
Thank you.
Click to expand...

This is fairly easy, but it depends on where you are located, your citizenship, and your residency.

What are they?

 

[Forester]

Serni said:
1) To open the bank account for the current company in some neutral country like Serbia or Kazakhstan - it costs a lot of money and there is no guarantee the scheme will work after some time
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Nevertheless, it's frequently used ”“ as you probably know.

Serni said:
2) I was thinking about UAE, but it's expensive and they have very limited possibilities with the transfers to Russia.
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“very limited possibilities with the transfers to Russia” ”“ do you have in mind that RU-UAE transfers should be done in AED, so usually one more FX operation is necessary? Or am I missing something? (This route is also heavily used, AFAIK.)

Serni said:
Now I've got the new offer to open the company in Hong Kong with the bank account in the China mainland.
What do you think about this option?
Click to expand...

Well, HK banks are not very friendly to the transfers to and from Russia, AFAIK; but for mainland it's another game; so it can work. From the long-term perspective, I would be a little bit uncertain as nobody knows how the EU-China relationships will develop... (Yes, EU is totally dependent on Chinese import but... it's governed by stupid politicians.)

Serni said:
Probably some other advises?
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FMPOV, LatAm seems to be a good option for a transit route. You can even go for a non-AEOI/CRS country like Paraguay, if it matters. To the best of my knowledge, it is not used frequently but it does not mean that it does not work ”“ on the contrary.

jafo said:
This is fairly easy, but it depends on where you are located, your citizenship, and your residency.

What are they?
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From what I read above, I guess Israel 😉

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[Serni]

Martin Everson said:
If the option is available use it. But I guess bank will just offer you access to Chinese offshore Yuan right?
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The service claims they can work with all the currencies, but very limited number of banks - 2 small banks in Russia, so this is the problem.

Martin Everson said:
Are you saying you cannot send Chinese Yuan outside Russia or there is some other issue?
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All non-residents from "unfriendly" countries like UK are banned in the Russian banks for outcome bank payments outside of Russia.

jafo said:
This is fairly easy, but it depends on where you are located, your citizenship, and your residency.

What are they?
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Israel, sometimes I am also in Russia

Forester said:
Nevertheless, it's frequently used ”“ as you probably know.
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It is, but I am not sure how stable these banks are.

Forester said:
“very limited possibilities with the transfers to Russia” ”“ do you have in mind that RU-UAE transfers should be done in AED, so usually one more FX operation is necessary? Or am I missing something? (This route is also heavily used, AFAIK.)
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As far as I know, USD transfers are also possible, but my main business is in euro anyway and it is the trading with the small margin, so I am trying to avoid any FX operations.

Forester said:
You can even go for a non-AEOI/CRS country like Paraguay, if it matters.
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Do you know some reliable agent for this kind of service?

 

[Forester]

Serni said:
The service claims they can work with all the currencies, but very limited number of banks - 2 small banks in Russia, so this is the problem.
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Yes, understandable.

Serni said:
It is, but I am not sure how stable these banks are.
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This is understandable, too.

Serni said:
As far as I know, USD transfers are also possible,
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To the best of my knowledge ”“ theoretically yes but with complications.

Serni said:
but my main business is in euro anyway and it is the trading with the small margin, so I am trying to avoid any FX operations.
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Oh well. Honestly, I'm afraid that in such a case (EUR) whatever route you choose, you will not avoid a FX operation ”“ unfortunately. Nowadays.

Serni said:
Do you know some reliable agent for this kind of service?
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I will send you a PM ”“ either this evening or tomorrow morning UTC time.

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[BalnearioCamboriu]

jafo said:
This is fairly easy, but it depends on where you are located, your citizenship, and your residency.
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If it depends on all these parameters, then it's anything but easy.

 

[jafo]

BalnearioCamboriu said:
If it depends on all these parameters, then it's anything but easy.
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Santa Catarina 😉

 

[Forester]

Forester said:
I will send you a PM ”“ either this evening or tomorrow morning UTC time.
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Done. Sorry for a small delay ”“ explained in the PM...

jafo said:
Santa Catarina 😉
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Aeh ”“ well, I do not need to understand everything on the world 🙂 but would you mind to elaborate a little bit more? 😉

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[jafo]

Forester said:
Aeh ”“ well, I do not need to understand everything on the world 🙂 but would you mind to elaborate a little bit more?
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Look up some of the usernames here on Google and it will all reveal itself 😉

PS. It's an inside joke for those who have been to that city and state. Gorgeous place.

 

[Forester]

jafo said:
Look up some of the usernames here on Google and it will all reveal itself 😉

PS. It's an inside joke for those who have been to that city and state. Gorgeous place.
Click to expand...

OK 🙂

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[Eagle Eye Analytics]

If I were you, I would use Georgia to open a company and solve your problems.

 

[Forester]

Eagle Eye Analytics said:
If I were you, I would use Georgia to open a company and solve your problems.
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Yes, this route is frequently used, too. Nevertheless, it is not as easy as it can seem. To the best of my knowledge
”“ You need a setup in Georgia (company with office and staff) that is not elementary and you must maintain it.
”“ There are remarkable tensions in the relationship line Russia-Georgia-EU. It is perfectly understandable but it results in the fact that the long-term sustainability of such a solution is uncertain.

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[jafo]

Forester said:
You need a setup in Georgia (company with office and staff) that is not elementary and you must maintain it.
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Exactly! I started researching this and this is NOT what I want. I don't want to become a slave to structures for the benefit of others.
I enjoy my "free time" which I spend working on inventions that will give me more free time to work on more inventions rof/%.

 

[Eagle Eye Analytics]

Forester said:
Yes, this route is frequently used, too. Nevertheless, it is not as easy as it can seem. To the best of my knowledge
”“ You need a setup in Georgia (company with office and staff) that is not elementary and you must maintain it.
”“ There are remarkable tensions in the relationship line Russia-Georgia-EU. It is perfectly understandable but it results in the fact that the long-term sustainability of such a solution is uncertain.
Click to expand...

You just need to register a company, personally open a bank account and rent a nominal legal address for a couple of bucks. The process takes a few days. The banking system of Georgia is not ideal, but much more convenient than the European one. The most important thing is that there are no long checks when making payments. Money to Europe and from Europe fly within a few hours. Also, Georgia did not fully support sanctions against Russia in favor of Ukraine (and this is right for the country itself). The turnover has increased greatly. Georgia is important to all parties to the conflict as a kind of hub and opportunity for communication between Russia and the West. As for the long term, you yourself see what is happening in the world. Nowadays there are no guarantees for any long-term relationship)

 

[Forester]

Eagle Eye Analytics said:
You just need to register a company, personally open a bank account and rent a nominal legal address for a couple of bucks. The process takes a few days. The banking system of Georgia is not ideal, but much more convenient than the European one. The most important thing is that there are no long checks when making payments. Money to Europe and from Europe fly within a few hours.
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Yes. But TBMK, this can be, and perhaps is, valid if you are doing some business in Georgia. In the case dicussed here, i.e. an offshore company serving just as a pass-through, the company is demanded to have a local director and a real office (probably to show some local activity) ”“ it was reported here at forums several times.

Eagle Eye Analytics said:
Also, Georgia did not fully support sanctions against Russia in favor of Ukraine (and this is right for the country itself). The turnover has increased greatly.
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True. Unfortunately, do not overlook that Brussel guys do not like it.
And Georgia has no other card in hand than the location and historical bindings; it's geopolitical power is much weaker than e.g. UAE or Kazakhstan with their natural resources.

Eagle Eye Analytics said:
Georgia is important to all parties to the conflict as a kind of hub and opportunity for communication between Russia and the West.
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Well, do not overestimate it. There are much bigger (and stronger) players at this field. Turkey, China, Israel as the first.

Eagle Eye Analytics said:
As for the long term, you yourself see what is happening in the world. Nowadays there are no guarantees for any long-term relationship)
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Well, generally, yes. But there are differences. In Georgia, there is a problem: a non-negligible part of the society is anti-russian, a non-negligible part is not (fully understandable and legit, of course); what policy prevails, it changes in time. Add to this that there is the (declared) willingness to join EU, together with historically remarkable economical ties to Russia ”“ and I am afraid that you end with the conclusion that the situation is anything but predictable and long-term stable 🙁

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[Eagle Eye Analytics]

Forester said:
Да. Но ТБМК, это может быть и, возможно, действительно, если вы ведете какой-то бизнес в Грузии. Ð’ обсуждаемом здесь случае, Ñ‚.е. оффшорной компании, выполняющей роль транзитной, от компании требуют местного директора и реальный офис (вероятно, для демонстрации какой-то локальной активности) ”“ об этом неоднократно сообщалось здесь на форумах.

Истинный. К сожалению, не стоит забывать, что брюссельским парням это не нравится.
И у Грузии нет другой карты в руках, кроме местоположения и исторических привязок; его геополитическая мощь намного слабее, чем, например, ОАЭ или Казахстан с их природными ресурсами.

Ну не переоценивайте. На этом поле есть гораздо более крупные (и сильные) игроки. Турция, Китай, Израиль в первую очередь.

Ну вообще да. Но есть отличия. Ð’ Грузии есть проблема: немалая часть общества настроена антироссийски, немалая часть - нет (вполне понятно и законно, конечно); какая политика преобладает, она меняется во времени. Добавьте к этому (декларируемую) готовность вступить в ЕС вместе с исторически замечательными экономическими связями с Россией ”” и я боюсь, что вы закончите выводом о том, что ситуация никак не предсказуема и не стабильна в долгосрочной перспективе.🙁
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My opinion on this issue is based on personal experience of living in this region and working with clients. I am a Georgian/Jew who lived in Russia for a long time, so I perfectly understand the realities of this geographical area. By itself, Georgia is a very insignificant player. However, at this stage, it is she who is the bridge to Europe for millions of Russians. Turkey for Russians is a foreign country where they only like to relax and fly through Istanbul to other countries. But now more and more flights are operated from Moscow via Tbilisi. For example, on July 5, a Tbilisi-Nice flight was opened especially for Russians) A huge number of cars and other goods are imported through Georgia to Russia. The ports of Poti and Batumi every day receive ships from all parts of the world and the end consumer of the goods that arrive there is Russia. The economy of Georgia is very dependent on Russian money. This is both income from tourism and the re-export of goods and other services. As for anti-Russian sentiments in society, they are greatly exaggerated by the Western press. In any case, I agree with you that both Georgia itself and the entire Transcaucasian region are a zone of high turbulence. But isn't it the same in Turkey and Israel? Russians have a great proverb: to be afraid of wolves, do not go into the forest)

 

[pfser]

Have you thought about opening a company in Bahrain? Not the cheapest option but banks are okay with transfers to/from Russia

 

[wellington]

Unless I am mistaken, there is a currency that has liquidity world wide and isn't reliant on counterparties to move around.

It's called 'cryptocurrency'.

If you are in international business, it makes zero sense to utilise financial rails built for an era we are leaving.

Having said that I am not condoning or advising sanctions violation etc, just pointing towards 'why is this an issue'.

 

[Forester]

@Eagle Eye Analytics : An introductory note / disclaimer: If you are using some (apparently not excellent) machine translator to work with this forum, you have, unfortunately, a good chance to misunderstand. I have looked at the Russian text that is presented as quoting me and it is something slightly different from what I wrote (I understand Russian well). So just be advised 🙁

Eagle Eye Analytics said:
My opinion on this issue is based on personal experience of living in this region and working with clients.
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I presumed this 😉

Eagle Eye Analytics said:
I am a Georgian/Jew who lived in Russia for a long time, so I perfectly understand the realities of this geographical area.
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I do not question this.

Eagle Eye Analytics said:
By itself, Georgia is a very insignificant player. However, at this stage, it is she who is the bridge to Europe for millions of Russians. Turkey for Russians is a foreign country where they only like to relax and fly through Istanbul to other countries.
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Yes, I agree.

Eagle Eye Analytics said:
But now more and more flights are operated from Moscow via Tbilisi. For example, on July 5, a Tbilisi-Nice flight was opened especially for Russians) A huge number of cars and other goods are imported through Georgia to Russia. The ports of Poti and Batumi every day receive ships from all parts of the world and the end consumer of the goods that arrive there is Russia. The economy of Georgia is very dependent on Russian money. This is both income from tourism and the re-export of goods and other services.
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Well phrased. But it does not touch the problem: Georgia is important for Russia and Russia is important for Georgia. But as The West is now important for Georgia, too ”“ at least to a remarkable extent ”“ Georgia is not important for The West. As a pass-through for trade, it can be easily replaced. And geopolitically, it's really not a significant player.

Eagle Eye Analytics said:
As for anti-Russian sentiments in society, they are greatly exaggerated by the Western press.
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I am aware of it. My main source of information is not the Western press but mainly Georgians living abroad but visiting Georgia regularly and their close friends (I've some long-term relationships with these people for some private reasons). And I've seen proofs that these feelings exist (and I am not surprised).

Eagle Eye Analytics said:
In any case, I agree with you that both Georgia itself and the entire Transcaucasian region are a zone of high turbulence. But isn't it the same in Turkey and Israel?
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I am convinced that it is not. Turbulences in general are not the problem I am talking about. This is the problem: The West has no power to force Turkey (not even speaking about Israel) really to do what The West wants. For e.g. UAE it is the same. Reasons are obvious. But for Georgia? Unfortunately, the game is currently played in such a way that Georgia has practically no other possibility than to obey. (Frankly, I do not understand well why Georgia wants to join EU, especially with the USSR experience ”“ but it is a sole business of Georgians, not mine.)

Eagle Eye Analytics said:
Russians have a great proverb: to be afraid of wolves, do not go into the forest)
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Such proverb is not only in the Russian language 🙂

Having said all the above:
Georgia is nowadays frequently used as a pass-through for a business with Russia; it works; and I do not question it at all. But to present it as a solution that solves the problem easily and sustainably ”“ it is, in my deep opinion, not adequate. (And for many use-cases /not every one/, there are better solutions.)

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...