In a bid to crack down on the activities of some of its richest citizens, the Russian government has published a draft blacklist of tax havens abroad in a concerted effort to try and pull back invested money into the motherland.
The Finance Ministry of the Russian Federation is currently planning measures to prevent money from leaving the country, as rich Russians flock to spend, invest and bank in places such as Malta, Cyprus, Switzerland, and other countries that have joined the blacklist.
According to Russian state media, this is being done to prevent tax evasion schemes and will see Russian registered companies in the countries listed excluded from domestic business privileges in Russia.
Sanctions in the wake of the 2014 Crimean conflict have left Russia in a tight spot
Malta is unique to the equation as it is the EU country that harbors the lowest business taxes on profit via strategically incentivised tax rebate schemes that see some locally registered international companies pay only 2% on their final earnings.
Malta’s cash and carry passport salesmanship has also allowed Russian oligarchs and other high net-worth individuals (HNWIs) to pummel millions of USD out of Russia’s already weak economy and into greener pastures.
Despite having over 140 million inhabitants, Russia's economy is outpaced by the US state of Texas.
Is Malta just too good at being a tax haven?