In our previous article, we talked in detail about what a Closed-End Unit Investment Fund (ZPIF) is, how it is regulated by law and what distinguishes it from other types of mutual funds. Today, we will tell you about the advantages of creating a closed-end investment fund in Russia:
Taxes optimization
The creation of a mutual investment fund can significantly reduce the tax burden on business. Thus, transactions with the property of a closed-end investment fund and the property of a closed-end investment fund itself have a special tax regime. And incomes received by the Fund from the sale of property or lease, dividends, interest and any other income are not subject to income tax at all, which allows you to reinvest without loss. Property taxes are also paid at the expense of the Fund, if the Fund includes such property.
According to legislation, all legal entities routinely pay share taxes themselves at current rates. For individuals - owners of investment shares, taxation is based on the rules for taxation of securities. The rate for residents of the Russian Federation is 13%, for non-residents - 30%. A resident is one who has been in Russia for at least 183 days during the year.
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Protection of assets from seizure and foreclosure by creditors
After the property is entered into a unit investment fund, its division is not allowed, the only possible object for seizure or foreclosure becomes an investment share, which is practically of no interest to raiders and creditors, since it does not make it possible to obtain direct control over the property. Moreover, if the shares of a closed-end unit investment fund are limited in circulation, they can only go to persons with the status of a qualified investor, which makes capture or foreclosure even more difficult.
Management optimization
As a mechanism for improving the structure of business management, mutual funds are an alternative to complex holding structures. Business management through ZPIF allows you to clearly structure your business, form a single center for decision making and execution, strengthen control (both internal and external) and increase its efficiency, streamline cash flows, reduce operating costs and, ultimately, increase profits.
Reducing risks in project implementation
Closed-end mutual funds have proven themselves well as a tool to reduce risks in the implementation of a wide range of projects (including construction and venture capital). When using a closed-end investment fund, the risks are reduced due to:
- Their localization, since the mutual fund allows you to isolate the project from the rest of the business, both organizationally and financially,
- Diversification due to the possibility of using several funds for the implementation of individual projects,
- Distributions between project participants, since closed-end mutual funds are a tool for collective investments.
- Strict control by supervisors, regulators and investors
A mutual investment fund is a highly effective tool for implementing a wide range of projects. However, such activities are associated with the need to comply with many legal requirements. We recommend creating a mutual investment fund in Russia only with professional consultants who can calculate the risks of the project and ensure that the fund's activities fully comply with legal requirements.
For 10 years of work in Russia and Asian countries, the RAUIE has accumulated experience, business connections and contact base, and has also earned a high reputation and trust among the business community. Today the RAUIE offers a wide range of solutions for entrepreneurs seeking to enter the Russian market.
If you still have questions or need advice on opening a business in the Russian Federation, you can leave a request in the feedback form or contact our specialists at the contacts below:
Maxim Kuznetsov - vice-president of the RAUIE
investment@raspp.ru
WeChat: maximkuznetsov
