Tax News Reporter - Week Ended 22 July 1997 - Investment In Foreign Currency - S

According to our information the Central Bank of Russia (CBR) has finally issued the long-promised instruction simplifying hard currency foreign investment. The liberalisation turned out to be less broad than expected. Regulation No 482 dated 7 July 1997 simply establishes a new procedure for opening "I" accounts for the transfer and conversion of hard currency cash contributions by non-resident investors into the Russian legal entities. The above procedure does not apply to anything other than contributions into the charter capital. "I" accounts opened under the new procedure cannot be used for acquisition of stock on the secondary market or of securities convertible into shares. The new Regulation, to the best of our knowledge, has not yet been published to come into force. The Regulation does not waive the requirement for tax registration on opening the account. What is important is that it confirms the unlimited right to sell equity through "I" accounts or to sell it in Roubles with their immediate conversion into hard currency with an authorised bank with proceeds going straight into the hard currency account.

Regulation No 482 "On registrational order of payment for participation in capital of residents of Russian Federation" of 7 July 1997

Measures for prevention of money laundering in Cyprus

The Central Bank of Cyprus has decided to allow the incorporation in Cyprus of subsidiaries of companies registered in countries where no share registers are kept or where bearer shares are issued only if the following conditions are met:

• the company can provide a bank reference letter from a bank in a country where there is effective control over money laundering;
• the Cypriot subsidiary does not open bank accounts in Cyprus either with onshore or offshore banks.

Further information can be obtained from Costas Mavrocordatos at Coopers & Lybrand in Nicosia, tel: +357 2 453053

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For further information contact Alla Shaulina on tel: +7 503 232 5511 fax: +7 503 232 5522 or e-mail directly: Alla_Shaulina@ru.coopers.com or enter a text search 'Coopers & Lybrand' and 'Business Monitor'.