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Latvia as a Safe Harbor
A powerful explosion occurred recently in the international baggage claim area of Moscow’s DomodedovoAirport. This apparent terrorist attack tragically killed 34 people at final count and injured another 170 individuals. Without question, this action highlights a long and growing concern about safety for the business investor and traveler in this region. To that end, Russia is frequently perceived as being unsafe.
Terrorism in Russia has a long history which originated during the times of the Russian Empire and continues to today. The US State Department provides the following warning to the business traveler: “Racial and ethnic minorities continue to be victims of unprovoked, violent harassment throughout the Russian Federation. The U.S. Embassy and Consulates General continue to receive reports of U.S. citizens, often members of minority groups, victimized in violent attacks by “skinheads” or other extremists. Be cautious in areas frequented by these types and wherever large crowds have gathered. U.S. citizens most at risk are those of African, South Asian, or East Asian descent, or those who, because of their complexion, are perceived to be from the Caucasus region or the Middle East. These U.S. citizens are also at risk for harassment by police authorities.”
A potential solution to safety concerns in this region would be to utilize Latvia as a safe harbor. Latvia reestablished its independence in 1991 following the breakup of the Soviet Union. This small Baltic country has quietly been emerging as an attractive alternative for those who need to transact business in the region but would prefer that their funds be in a quieter political environment. Its proximity to the Russian Federation makes it geographically desirable for travel when absolutely necessary and yet this Republic seems to be worlds away from the current strive.
If this jurisdiction seems an intriguing solution then a Joint Stock Company (JSC) is an interesting corporate structure for entrepreneurs that only need minimum applications but want to maintain a high level of privacy. In Latvia, a JSC is maintained in registered form except shareholder names are kept private. This information only becomes public knowledge in the event of an official criminal investigation. Thus, Joint Stock Companies are similar in most facets to International Business Corporations (IBCs) but offer more protection from unwanted probes that might come from competitors or an unsavory element. Please keep in mind that Latvia is not a tax haven but a potential safe harbor from political unrest. A JSC facility, therefore, could be an important addition to international structuring needs for business interests in this region of the world.