Tue, 12 Dec 2023

Europe's top online social network returns home

27 Sep 2023, 22:13 GMT+10

Internet major VK has finalized its transfer of domicile from the British Virgin Islands to Russia, according to an official register

Russian social media and internet services giant VK Group has officially moved the jurisdiction of its business back to Russia, an official corporate register showed on Tuesday.

The company redomiciled from the British Virgin Islands to a special administrative region (SAR) on Oktyabrsky Island in Russia's Kaliningrad Region, which is ?onsidered one of Russia's "offshore" zones.

VK Group, which owns a leading Russian social media platform, VKontakte, will continue to operate in the SAR as an international public joint stock company (IPJSC).

VK's board of directors initially approved the redomicilation to Russia back in February. In August, the board and the company's shareholders officially announced their decision to terminate operations in the British Virgin Islands and move back to Russia.

The board explained the decision by noting that the vast majority of VK's assets "are based in and generate revenue in Russia." Last year, the head of VK, Vladimir Kiriyenko, said the company was working on a new long-term business strategy that would "take into account external restrictions," referring to Ukraine-related Western sanctions on Russia and its companies. Kiriyenko himself was targeted by US and UK sanctions last year, which prompted Apple to temporarily remove VK's apps from its App Store in mid-2022.

In August, VK also announced its intention to delist from the London Stock Exchange (LSE) and move its shares to the Moscow Exchange. The listing of VK's global depository receipts (GDRs) on the LSE was terminated on September 12.

Analysts say that VK's move aligns with the recent trend among Russian companies of returning home in light of the pressure of Western sanctions. According to a recent report from the Ministry of Economic Development, during the first eight months of the year some 45 companies finalized redomiciling procedures, nearly three times the number that were redomiciled in the past four years. Some 80% of the firms relocated from Cyprus and 13% from the British Virgin Islands.

For more stories on economy & finance visit RT's business section


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