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7. Conclusion
The beginning stage of this paper was to develop a theoretical foundation of offshore-related activities and to define the key terms. Then, the scale of offshore activities conducted by MNCs and Russian large companies was estimated. First, the industry was analyzed and three companies were chosen for in-depth case evaluation, and the general approach to categorize offshore schemes was developed. After that, the idea and analysis were applied in the discussion section to assess, match and conclude fundamental understanding. Finally, the recommendations for de-offshorization were submitted based on that expertise. The recommendations address concerns on all sides involved in offshore activity to improve living standards in the countries from which the capital is moving.
The limitation of this research is a wide variety of possible offshore schemes and their dependency on national and international legislation. Each offshore scheme is designed according to the needs of a customer and, therefore, a personalized service. However, attempts to define and categorize them were made.
Since offshore activity is legal, it is based on the existed legislation and economic conditions in Russia which are contributing to this. Companies provided offshore services are law firms whose employees are experts in corporate legislation. In addition, they have to cooperate with
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the registrars in offshore jurisdictions that employ nominal directors and accountant-generals.
Eventually, it is hard to identify the real owners of offshore companies that is one of the main features of offshore territories.
Offshore schemes in Russia is an embodiment of global trends in offshore activity and the country’s business climate. Russian companies are conducting the same offshore activities like
corporations around the globe. However, these are only the outer manifestation of the inner issues of Russian economy with its heavy legacy. Russian offshore schemes differ in nature from those realized by western companies. It is mainly about assets protection and less about tax reduction. Therefore, the Russian large companies in such schemes become the property of offshore firms, often through a long chain of entities. This results in losing control over important manufacturers within Russia and even strategically significant industries.
Based on that, another restraint is to identify institutional reasons that make Russian entrepreneurs to go offshore. These arguments are not about tax or interest rates. Some experts tend to see problems in political system. Citizens should trust the authorities and associate their future with the country. In reality, people are leaving Russia, especially, those who have such opportunities.
The findings can be used for further studies of offshore activities of Russian large companies
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with additional industry data and cases not included in this thesis. The purpose we suggest could be to describe the ethnical aspect of offshorization on the companies’ side.
Another aspect that could be researched is to compare Russia with another developing country with the similar background. It could be, for example, China. Both countries are large, have communist past and significant share of state-owned companies. Contrasting with China may help to identify actual reasons why businesses use offshore schemes.
Technically, the offshorization is feasible due to the lack of real actions by the government to prevent such business activities. In addition, the authorities do little to improve the business environment in the country. The first apparent step is to provide guarantees to businessmen on the property preservation. It means that courts should be really independent and fair. Secondly, the government itself and the state-owned companies should cease the similar actions to seize property to set an example of ethical business. Eventually, the de-offshorization is a capital return process, thus, it is similar to the people’s return to their country of origin. To succeed, they have to see the prospects of living in there and the future for their children.
Finally, another possible direction for future investigation is the Russian legislation and government policies that allow to implement offshore schemes. However, such studies are in the field of jurisprudence and public administration and require different methodologies.
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