Controversial Russian company mulls moving from Jersey

Rusal, a US sanctions-hit aluminium company owned by a controversial Russian billionaire accused of extortion and implicated in a murder is considering a change of domicile from Jersey to Russia in order to take advantage of new special tax regulations.

Russia has created two special administrative regions where companies enjoy benefits such as a zero tax on profits received by way of dividends – an arrangement similar to foreign offshore tax havens.

The board believes that such redomiciliation “may be in the best interests of the Company and its shareholders,” but the final decision is yet to be made and will be subject to shareholders’ approval.

“Shareholders should take note that the plan of Redomiciliation may or may not proceed and the Redomiciliation proposal is still under consideration of the Board,” the statement reads.

Rusal was hit by US sanctions on April 6 along with other companies, including the ones related to Russian businessman Oleg Deripaska.

US sanctions of sanction-hit companies are to be frozen and US companies and citizens are barred from doing business with them.

Explaining the sanctions at the time, the US Treasury linked Deripaska – once Russia’s richest man worth $28bn – with allegations of money laundering, “threatening the lives of business rivals”, and interfering in elections.

They added that there were also claims he had “bribed a government official, ordered the murder of a businessman, and had links to a Russian organised crime group.”

Headquartered in Moscow, the company is the world’s second largest aluminium provider and currently incorporated in Jersey.

The announcement comes a day after En+ Group, which is also subject to US sanctions on the two companies’ tycoon co-owner Oleg Deripaska, said it was considering re-domiciling from Cyprus to one of Russia’s new offshore zones.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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