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]

If the option is available use it. But⁠ I guess bank will just offer you access to Chinese offshore Yuan right?

Are you saying you cannot send Chinese Yuan outside Russia or there is some other︀ issue?

 

[jafo]

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

What are they?

 

[Forester]

Nevertheless, it's frequently⁠ used – as you probably know.
“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 is︀ necessary? Or am I missing something? (This route is also heavily used, AFAIK.)
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 will︆ develop... (Yes, EU is totally dependent on Chinese import but... it's governed by stupid politicians.)︇
FMPOV, LatAm seems to be a︈ good option for a transit route. You can even go for a non-AEOI/CRS country like︉ Paraguay, if it matters. To the best of my knowledge, it is not used frequently︊ but it does not mean that it does not work – on the contrary.

From what I read above, I︌ guess Israel 😉

 

[Serni]

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.
All non-residents from "unfriendly" countries like UK are banned in the Russian banks for⁢ outcome bank payments outside of Russia.

Israel, sometimes I am also in Russia

It is, but I am not sure︂ how stable these banks are.

As far as I know, USD transfers are︆ also possible, but my main business is in euro anyway and it is the trading︇ with the small margin, so I am trying to avoid any FX operations.

Do you know some reliable agent for this kind of service?

 

[Forester]

Yes, understandable.
This is understandable, too.
To the best of my⁤ knowledge – theoretically yes but with complications.
Oh well. Honestly, I'm afraid that in︀ such a case (EUR) whatever route you choose, you will not avoid a FX operation︁ – unfortunately. Nowadays.
I will send you a PM – either this evening or︃ tomorrow morning UTC time.

 

[BalnearioCamboriu]

If it depends on all these parameters,‍ then it's anything but easy.

 

[jafo]

Santa Catarina 😉

 

[Forester]

Done. Sorry for a small delay – explained in the‍ PM...
Aeh – well, I do not need⁠ to understand everything on the world 🙂 but would you mind to elaborate a little bit⁤ more? 😉

 

[jafo]

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]

OK 🙂

 

[Eagle Eye Analytics]

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

 

[Forester]

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.

 

[jafo]

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]

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 takes︀ a few days. The banking system of Georgia is not ideal, but much more convenient︁ than the European one. The most important thing is that there are no long checks︂ 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 is︄ right for the country itself). The turnover has increased greatly. Georgia is important to all︅ parties to the conflict as a kind of hub and opportunity for communication between Russia︆ and the West. As for the long term, you yourself see what is happening in︇ the world. Nowadays there are no guarantees for any long-term relationship)

 

[Forester]

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 a︀ real office (probably to show some local activity) – it was reported here at forums︁ several times.
True. Unfortunately, do not overlook that Brussel guys do not︄ like it.
And Georgia has no other card in hand than the location and historical︅ bindings; it's geopolitical power is much weaker than e.g. UAE or Kazakhstan with their natural︆ resources.
Well, do not overestimate it. There are much bigger (and stronger) players at this︉ field. Turkey, China, Israel as the first.
Well, generally, yes. But there are differences. In︌ Georgia, there is a problem: a non-negligible part of the society is anti-russian, a non-negligible︍ part is not (fully understandable and legit, of course); what policy prevails, it changes in︎ time. Add to this that there is the (declared) willingness to join EU, together with️ 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 🙁

 

[Eagle Eye Analytics]

My opinion on this issue is based on personal experience of living in this region and︄ 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 a︆ very insignificant player. However, at this stage, it is she who is the bridge to︇ Europe for millions of Russians. Turkey for Russians is a foreign country where they only︈ like to relax and fly through Istanbul to other countries. But now more and more︉ flights are operated from Moscow via Tbilisi. For example, on July 5, a Tbilisi-Nice flight︊ was opened especially for Russians) A huge number of cars and other goods are imported︋ through Georgia to Russia. The ports of Poti and Batumi every day receive ships from︌ all parts of the world and the end consumer of the goods that arrive there︍ is Russia. The economy of Georgia is very dependent on Russian money. This is both︎ income from tourism and the re-export of goods and other services. As for anti-Russian sentiments️ 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 🙁

I presumed this 😉
I do not question this.
Yes, I︄ agree.
Well phrased. But it does not︋ touch the problem: Georgia is important for Russia and Russia is important for Georgia. But︌ as The West is now important for Georgia, too – at least to a remarkable︍ extent – Georgia is not important for The West. As a pass-through for trade, it︎ can be easily replaced. And geopolitically, it's really not a significant player.
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).
I am convinced that it is not. Turbulences in general are not︀ the problem I am talking about. This is the problem: The West has no power︁ 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, the︃ game is currently played in such a way that Georgia has practically no other possibility︄ 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, not︆ mine.)
Such proverb is not only in︈ the Russian language 🙂

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