Jurisdictional Competition in a Developing Economy: Law and Policy Issues of the Offshore Structure Use in Russia

by Maria Kuzmina November 30 2009, 01:47
Someone might view the economic crisis times as the best period to broaden one’s business horizons and invest into a new market. The fast growing markets such as China, Brazil, India and to some extent Russia are waiting for new investors. Russia, having more than 140 million inhabitants, i.e. potential consumers, and abundant natural resources remains mostly neglected by investors in many business fields. For decades Russian market was viewed as not a place for those faint-of-heart. Now the growth of political stability and positive developments in legislation make the investment less risky and more attractive. Nevertheless, the still existing differences between local and internationally recognized legislative frameworks and court practices make investors wonder if there is any possibility to opt out of the Russian legal rules.
This article will explore the reasons behind Russian corporate norms that explain the inflexibility of current legislation and court practice and discuss views on future development of the corporate law system of the country. Part II introduces an overview of the policy issues behind the corporate law created specifically for Russia as a developing economy. Part III analyzes the legislation and its drawbacks, provides advice for investors who for various reasons want to opt out of Russian law. Part IV discusses the reasons for the government amending the corporate law, gives a forecast of future developments and provides a general conclusion. [More]

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