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Kristian Wright 22 / December / 20

How to return traders from offshore to the native jurisdiction?

How to return traders from offshore?
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How to return traders from offshore to the native jurisdiction?

Last week in the State Duma of the Russian Federation a round table on "Unification of approaches to the regulation of the OTC Forex market in Russia and the Republic of Belarus" was held. The event was also attended by representatives of Belarusian Association for Financial Market Development (ARFIN, Russian analogue of AFD). The participants of the meeting exchanged their experience in regulation of Forex market in the neighboring countries with the prospect of its possible unification.

"Strict requirements of the Russian legislation in protection of clients resulted in the fact that out of more than half a million of Russians trading at Forex market, only 12 thousand of them are present in Russia. Belarus' more lenient approach, including to the taxation of the citizens, on the contrary, ensured an inflow of clients, including from abroad," - commented the current regulatory arbitrage in ARFIN.

Earlier the moderator of the event himself, Mikhail Yemelyanov, first deputy chairman of the State Duma Committee on State Building and Legislation, first deputy head of the faction "Just Russia", acknowledged that the Belarusian side had advanced much further in regulating the Forex market and creating a more favorable environment for its participants. This applies to the range of trading instruments, leverage, market entry prices, and others.

As noted by ARFIN, the reason is that Belarus has taken a milder path. Now the country's register includes 18 forex companies with 26 thousand clients.

How to bring traders back from offshore?

According to the head of the Main Department of Regulation of Non-Credit Financial Institutions of the National Bank of Belarus, Dmitri Nabzdorov, when developing the legislation in Belarus they addressed the question of how to bring the people, trading through offshore sites, back to their native jurisdiction. The first measure was preferential tax treatment: "If a natural person is served in the Belarusian company, then the income tax will be 0%, if in a foreign company - 13%. According to him, the authorities have recognized that it's more expensive to administer the income tax from the citizens in the Forex market than not to take it at all. It's legal entities that pay - the profit tax of forex companies is 25% instead of the basic 18%.

Chairman of ARFIN, Alexey Sidorov, commented: "If we want to protect our citizens, the regulatory approach should be such that the client has different options. We are competing with jurisdictions that provide market access within five minutes without imposing any special conditions". Sidorov also emphasized that "the main task is to ensure the easiest access to the Russian market for an unprotected client.


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