Economy & Politics

President Putin Calls for 13 Percent Profits Tax on Repatriated Funds to be Scrapped

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russian-rublesRussian President Vladimir Putin has called for the tax on profits realized overseas then repatriated to Russia to be scrapped. A recent amnesty has been in place, although this expired in mid-2016. Russia’s tax laws counter that a 13 percent tax is due on profits remitted back to Russia.

The President also proposed to exempt entrepreneurs who transfer business from abroad to Russia from paying income taxes.

Meeting with a group of Russian MPs ahead of next year’s elections, President Putin said, “The first step is to extend the amnesty period for capital, referring to those external restrictions that do not become smaller, but, on the contrary, appear to have a tendency to increase.”

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Russia, China Agree to Coordinate OBOR with EAEU

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Chinese Premier Li Keqiang has said on a visit to Moscow last week that China is ready to step up efforts to link the China-initiated Belt and Road Initiative with the Eurasian Economic Union (EAEU) when meeting with Russian President Vladimir Putin. The alignment, Li said, can boost bilateral cooperation in traditional and emerging areas to expand cross-border trade and further develop Russia’s Far East.

China and Russia are making progress in new areas such as the digital economy, technological innovation, and small and medium-sized enterprises while promoting cooperation in traditional areas such as energy, transportation, production capacity equipment, and agriculture, Li said.

The premier said China would like to strengthen coordination with Russia in international affairs and maintain close exchanges under multilateral mechanisms. This includes the Shanghai Cooperation Organization, which will help regional cooperation and inject constructive ideas to global peace and development.

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Russian-Uzbek Trade Up 23 Percent in 2017

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uzbek_russian_flagsThe impact of the Eurasian Economic Union (EAEU) on its member states continues to grow as Russian-Uzbekistan bilateral trade rose 23 percent in the first three quarters of 2017, compared with the previous year, the Russian Ambassador to Uzbekistan Vladimir Tyurdenev has stated.

The Russian diplomat said that according to the results of business missions, export contracts (agreements) worth US$4.6 million were signed. In 2017, companies from about 70 Russian cities interacted with Uzbek businesses. “The practical results of intensifying inter-regional exchanges can be seen through the prism of statistical data of bilateral trade. Today, Russia is the leading trade partner of Uzbekistan,” said Tyurdenev. “Trade turnover between Uzbekistan and Russia made up US$2.4 billion in the first nine months of 2017.”

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Russia Set to Issue Government Bonds in Chinese Yuan Denominations

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china-yuan-renminbi-and-russia-rubleIn a sign of the global shift away from American hegemony and dollar, Russia is poised to issue a significant OFZ Bond in Chinese currency, the RMB Yuan. OFZ Bonds (Obligatsyi Federal’novo Zaima) are Federal Loan Obligations, being government bonds issues by the Russian government.

Yelena Chaikovskaya, the director of the financial markets development department at the Central Bank of Russia has stated that the plan to issue the bonds are now in the final stages, the infrastructure is ready and now the matter is up to the Finance Ministry. The initial offering is CNY 6 billion, an amount equivalent to US$1 billion, and is a pilot scheme to help test infrastructure, following which there may be corporate lending facilities denominated in yuan.

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World Bank – Impact of China and India on Russia’s Economy

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india_russia_china_flagThe World Bank has issued a report about the impact China and India will have on Russia, which is of special interest as both countries are currently negotiating Free Trade Agreements with the Eurasian Economic Union. The 23 minute radio broadcast and transcript of summary can be found on Sputnik Radio here.

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Trump Out, Xi and Putin In – China, Russia Want Asia-Pacific Free Trade Deal

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china-russia-want-asia-pacific-free-trade-dealIn the aftermath of the United States pulling out of the planned Trans-Pacific Partnership (TPP) agreement, Russian President Vladimir Putin said this week that Moscow supports the idea of setting up a free trade area in Asia and the Pacific.

“We support the idea of forming an Asia-Pacific free trade area. We believe this is in our practical interest and represents an opportunity to strengthen our positions in the rapidly growing APR markets. I want to note that over the past five years, the share of APEC economies in Russia’s foreign trade has increased from 23 to 31 percent, and from 17 to 24 percent in exports. And we have no intention of stopping there.”

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Russia to Push Greater Eurasian Partnership Concept at APEC

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infographic-great-eurasian-partnership-for-cdeRussian President Vladimir Putin is set to push the concept of the Greater Eurasian Partnership at the annual APEC meeting in Danang, Vietnam tomorrow. The GEP is a proposed combination of the Russian led Eurasian Economic Union, members of the Shanghai Co-Operation Organisation, ASEAN, and China’s Belt & Road Initiative.

“The project of the Greater Eurasian Partnership is open to new participants”, President Putin said ahead of the APEC Economic Leaders’ summit in Vietnam on November 10-11.

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Crimea Free Trade Zone Investments Soar to US$1.65 Billion

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crimea-ftzThe Crimea Free Trade Zone located in Sevastopol, was established in 2015, following its annexation by Russia, and has realized some US$1.65 billion worth of foreign investment since it was bought into operations, according to Sergei Aksyonov, the head of the FTZ.

Speaking at the Friends of Crimea Forum, an international conference, held in Yalta yesterday, he said: “The volume of investments in the free economic zone has exceeded 100 billion rubles and the number of its residents has exceeded one thousand. Notably, they include foreign, including European, residents. However, there are not that many of them as we would like to have.”

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Russian Language Articles on Business Opportunities and Setting Up in China

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russian-language-articlesRussia Briefing has been running a series of articles, in Russian, concerning business investments into and establishing a business in China. These are of primary interest to any Russian businesses thinking of establishing a business in, or trading with China. Please see the archived articles below. Titles are in English but will link to Russian language articles:

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Russia-German Trade Up 25 Percent in 2017

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close-up-of-deutsche-markVladimir Putin has stated that bilateral trade between Russia and Germany reached US$40.7 billion last year, with some US$18 billion directly invested by German companies in Russia. 2017 has shown bilateral trade between the two countries growing at at 25 percent.

President Putin stated that “More than 5,000 enterprises with the participation of German capital operate in Russia employing 270,000 Russian citizens. The turnover of those companies exceeds US$50 billion. Despite all existing challenges in the political area, the economic relations with the Federal Republic of Germany are not fading away. Although China has outpaced Germany in terms of trade turnover with Russia, the latter still takes a significant share of Russia’s trade.”

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