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The economic crisis sparked by the coronavirus pandemic is pushing the Kremlin to clamp down on tax avoidance and close an offshore loophole popular with Russian business, as the government scrambles to plug holes in its budget. Starting in January, Moscow says it will begin taxing at higher rates profits that companies transfer to lower-tax jurisdictions such as Cyprus, Malta and Luxembourg, marking some of the most aggressive steps taken by Moscow in recent years to claw back tax revenue. “Some company clients are looking into options to change their corporate structures, move jurisdictions or return to Russia,” said Rustem Ahmetshin, senior partner at Moscow-based law firm Pepeliaev Group.

Economies across the globe have experienced the grave consequences of the COVID-19 outbreak. A long-lasting decline in business activity, remote work and in some cases even a full suspension of operations are looming for tenants and landlords in many countries. In response to the threats of the pandemic, state authorities are stepping up measures to protect tenants who have suffered from the pandemic and who are traditionally viewed as more the vulnerable party to a lease agreement. 

First it is necessary to assess whether the coronavirus pandemic influences a specific company’s performance of its obligations under a specific contract, since the mere fact of the pandemic does not release all the parties to civil relationships from liability for the non-performance or improper performance of obligations.  

The restrictions that have been introduced in Russia correspond to those introduced abroad. However, for many companies these may only delay bankruptcy if measures of support for business during the pandemic prove to be insufficient.

International Assurance Complience Programme

In Russia, the government and sports teams are working to attract more foreign sports fans – as well as private investment. To this end, officials are – among other things – looking at relaxing visa requirements for foreigners visiting for sporting events. “(Russian sports teams) need to be more competitive, not just on the field, but commercially,” said Andrey Tereschenko, a partner at Pepeliaev Group.