Latvia as a Safe Harbor

Russia is a hotbed for investment but frequently perceived as being unsafe. Terrorism in that region 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.

Bank and Trust Company ownership is not a practical alternative for most entrepreneurs in this jurisdiction. A Joint Stock Company (JSC), however, is an interesting corporate structure for those 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 we are suggesting it as a potential safe harbor from political unrest. We can assist in acquiring a JSC facility through our associates overseas both in new formations or existing corporations. It could be an important addition to your international structuring interests.

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