Focus on: Russian financial services

Moscow is slowly emerging as an international financial centre as Russian President Vladimir Putin tries to plug the gap in the tertiary sector, creating a wealth of opportunities for international investors.

Andrey Shemetov, Deputy CEO of the Moscow Exchange, said while visiting New York for an investment conference: “We’d like to show that Russia is changing, so people would understand that bears don’t walk the streets and no one runs around in winter fur hats in the summer. There are financial changes in the country.” Investors will doubtless take some convincing that bonafide changes are being made, but after the Moscow Exchange held its Initial Public Offering (IPO) in February, it’s clear that there are big moves in the right direction.

There is huge scope for both international and domestic firms as Russia opens up its financial sector. Until recently, Russia’s security market remained isolated from international markets and in order to access capital, Russian companies had to go to London or New York. That could all change as the country becomes more financially independent. What’s more, the raw potential offered by Russia’s markets offers huge potential to overseas investors, and ties with established financial markets will create a virtuous cycle of wealth creation.

Reforms to provide access for international investors have been pushed through by the Russian government in recent months, such as the establishment of a central securities depository, the opening up of the bond market to Euroclear and Clearstream, and, most recently, upgrading the settlement of Russian securities to T+2 to eliminate prepayment for traders. But despite changes in legislation, there is still a lot of ambiguity on how exchange-traded funds (ETFs) would work in practice in Russia, and transparency is a key concern.

For businesses looking to set up in Russia or looking for help with the country’s new financial capabilities, we have an office in Moscow where our dedicated accounting, legal, HR and payroll staff can take care of your every need. At TMF Group we combine our extensive global resources with our unrivalled knowledge of local regulations, cultures and languages to help you achieve your business goals.

 
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