By the middle of the year, non-resident assets in Russian brokerage accounts exceeded 1 trillion rubles.

By the middle of the year, non-resident assets in Russian brokerage accounts exceeded 1 trillion rubles. Based on the results of the second quarter alone, they increased by 23%. The assets in the accounts of legal entities registered in internal and external offshores grew most actively. These jurisdictions are used to operate on the stock market and build business with remaining foreign partners. Interest in the Russian market is also growing from investment funds from friendly countries who are willing to take risks to make a profit in undervalued assets.

According to Kommersant’s assessment, based on data from the Central Bank, at the end of the second quarter, the total number of non-resident accounts with Russian brokers increased by more than 5%, to 25.9 thousand. Assets grew even faster. During the quarter they increased by 23%, to 1.06 trillion rubles. The main increase in accounts was provided by private investors (by almost 1.3 thousand units to 24.58 thousand units), and in terms of assets – by legal entities (by 23.6%, to 1.021 trillion rubles).

This dynamics of accounts and assets is associated not only with the actions of Russian companies in redomiciliation and registration of offshore companies, but also with the change of jurisdictions by companies operating in Russia. According to a Kommersant source in a large investment company, all organizations that interact with the Russian Federation in one way or another are forced to look for alternative places to store money and alternative countries for settlements. “Many Western counterparties may be wary of secondary sanctions if they work directly with Russian companies. When interacting with non-Russian companies, this risk for them is reduced,” notes Dmitry Lesnov, head of the client service development department of Finam Financial Group.

There have been noticeable changes in the geography of the inflow of funds. If at the beginning of the year the assets of clients from the UAE grew most actively (eight times, to 63 billion rubles, see Kommersant on June 13), then at the end of the second quarter the dynamics slowed down – by 42%, to 89.5 billion rubles.

Now the main increase has come from international companies from the territories of the SAR (i.e., internal offshore companies), whose assets have grown by more than 13 times, to 133.6 billion rubles. According to this indicator, they took second place after Cyprus (506 billion rubles).

The assets of clients from external offshores – Panama, the Marshall Islands, the islands of Saint Kitts and Nevis, Guernsey and Grenada – showed multiple growth. There was a noticeable, although not so significant (by 35%), increase in the assets of clients from Belize, in terms of which the country is one of the five largest in the Russian market.

The UAE, which initially attracted Russian investors with its “warm climate and loyalty,” subsequently “changed its attitude towards Russians,” notes Maria Agranovskaya, managing partner of the GRAD Bar Association. According to her, other jurisdictions previously popular with Russian companies, such as the Cayman Islands and the British Virgin Islands, “have begun to take into account the sanctions restrictions imposed against Russian companies.”

In such conditions, the choice of jurisdictions is justified by the legal security of the company’s assets, as well as a preferential tax regime. As Denis Polyakov, head of the Digital Economy practice at GMT Lega, notes, SARs are part of Russian legal reality, which means that the illegal actions of individual states, expressed in the introduction of unilateral sanctions, will not affect the ability of international companies registered or redomiciled in the SAR to own assets. “Belize and Panama, at the moment, also, unlike most other offshores controlled by the UK or the USA, have not taken restrictive measures against the Russian Federation, Russian persons or companies with Russian participation,” notes Mr. Polyakov.

However, priorities may be revised in the context of a constantly changing geopolitical situation, according to market participants. “If the authorities of the still friendly country in which the companies are currently registered, officially or unofficially, create obstacles and create risks for the company’s operating activities, then the company’s migration in the future is quite real,” notes Dmitry Lesnov.

Meanwhile, interest in the Russian market is also growing from foreign funds (primarily from friendly countries), since securities are traded at a significant discount to most world markets. “We see an increase in demand for Russian assets from the countries of the Middle East,” a source at the brokerage company told Kommersant. For the greatest convenience of accounting and access to the market, he specified, foreign investors are trying to open brokerage accounts in the Russian infrastructure.

Vitaly Gaidaev