Putin announces crackdown on Russian companies registered in offshore jurisdictions

MOSCOW – Russian President Vladimir Putin has announced a set of initiatives to crack down on Russian companies who register and pay taxes in foreign offshore jurisdictions.

Cyprus, Luxembourg and the Netherlands have for years been destinations of choice for thousands of Russian companies, from small ones to industry giants, that sought more predictable legal and tax practices.

Putin said in a state of the nation address on Thursday that foreign-registered companies that operate in Russia and have Russian citizens as beneficiaries will now be obliged to pay taxes in Russia. Russian companies registered in offshore jurisdictions will not be allowed to bid at state tenders, Putin said. State tenders have been a major source of income for many Russian businesses.