Cyprus – Russian Business and Investment Forum 2012
On Friday the 10 February the Cyprus Chamber of Commerce and Industry held it’s annual “Cyprus – Russian Business and Investment Forum” I had the fortune to participate at the Cyprus – Russian Business and Investment Forum in Limassol, Cyprus. The exchange of information and ideas was at the core of the forum.
The foreword was given by the president of the Republic of Cyprus Mr. Demetris Christofias, followed by speeches and presentation of experts. For more specific details and information I urge you to consider the post of the Cyprus Mail and the Financial Mirror.
Chairman of the Russia-Cyprus Council and CEO of the Bank of Moscow Mikhail Kuzovlev spread controversy at the Cyprus – Russian Business and Investment Forum after delivering a speech concerning internal audits undertaken on 52 Cypriot companies.It appeared that more than 2 billion were lent to 52 Cypriot companies serviced by the same corporate services provider and auditor. Furthermore Mikhail Kuzovlev noted that the inconsistency of the borrowers’ business to the size of loans, lack of collateral and failure to observe covenants set forth in the loan agreements collectively indicate that the loans were not intended for re-payment.
Participants of the Cyprus – Russian Business and Investment Forum were shocked by the fact that the loan committee of the bank agreed to give these funds without collateral and allowing the breach of the covenants in the loan agreements.
The panellists went on to consider cross boarder structures falling under investigation by the Russian Tax authorities due to the lack of substance of the cross boarder entities. Russia has been for the last 30 years a jurisdiction which has not paid much attention to the substance of cross boarder structuring. The increased attention of Russian tax authorities to substance thresholds will require tax and legal advisers to take a better look at existing structures but also those proposed to be set up in the future. Likewise local providers and consultants should put in place the necessary measures which will allow international investors to create substance in their cross boarder structure.
Thank you for your time.