Russian legislation allows for concluding agreements in accordance with British law and it is not necessary to work via offshore jurisdiction for this, Russian President Vladimir Putin said in response to the proposal of President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin.

"You said that, let's say, partners of some of our companies are interested in carrying out a deal under British law. But it is not necessary to register a company offshore in order to do this. The company can be registered in Russia and be our tax resident. Any contact can comply with British law and, let's say, arbitration proceedings can be moved to Stockholm. Our Russian legislation allows us to do this and it is not needed to go offshore," Putin said at a meeting with Shokhin on Friday.

The state should be aware of the final beneficiary when providing state support, he said. "This is an extremely important thing - the final beneficiary, who the owner of the company is, as it can be registered in Cyprus while in reality the real owners, whom no one knows, and they do not want to show, sit in some 'grey' or 'black' area. This always raises suspicion and questions," he said.

Keeping things in Russia should resolve firstly the issue of tax evasion, the president said. "Let's say, a subsidiary gives its head company funds borrowed. These funds borrowed are then taxed not under the Russian tax legislation but offshore ones, under lower rates and dividends go under these lower rates. We have agreements on excluding double taxation with many countries, including let's say Cyprus. And it seems like the company paid everything under Russian law but it paid there, not here," Putin said.

"Without a doubt, it is necessary to work out all mechanisms and details here. We will work together with the Finance Ministry, with the government in general and the Ministry of Economic Development. I think that by May, probably even earlier, we will draft our proposals so that they are not just an idea but a legal standard," Shokhin said.

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