Russian Eurobonds on Vienna SE
April 8, 2021 12:57 pm

On 8 September 2020, the Republic of Cyprus and the Russian Federation signed the Protocol to amend the double tax treaty between the two countries. As of 1 January 2021, the rate of withholding tax that may be levied at source by Russia on outbound interest income has been increased to 15%. There is a withholding tax exemption for interest payments on corporate bonds, government bonds, and Eurobonds.

The decision has a major impact on existing structures whereby Cyprus companies were used to loan to Russian subsidiaries/entities and receive the interest on the loans. The imposition of the 15% withholding tax effectively makes the maintaining of such structures ineffective.


The exception to the rule is that when Russian companies pay interest on Eurobonds, listed on recognized stock exchanges, the withholding tax on outbound interest payments is zero. Thus, it would make sense for such structures to swap their existing loans with listed Eurobonds for maximum tax optimization.

There is now the possibility for Russian entities to issue and list all types of debt instruments (Eurobonds) on the Vienna Stock Exchange’s MTF market with the registry established in Euroclear, to allow for the bonds to be purchased and held by Russian brokerage firms, institutional investors, funds and private companies.


Existing loan arrangements can be swapped with the Eurobonds, or new issue and listing can be done according to client needs. In the case of loan swaps with bonds, the Russian entity will issue and list new Eurobonds on the Vienna MTF and the Cyprus company, which until recently had loaned the money to the Russian entity, will swap the loan and become the owner of the bonds.

The same Eurobonds may also be used to attract funds from other investors, according to client wishes and needs.

Complete package

Eurivex an EU investment firm regulated by Cyprus Securities & Exchange Commission (CySEC), license number 114/10, specialising in offering listing solutions and acting as depository for Alternative Investment Funds can offer a complete package to interested parties.


  • 18 Kyriacou Matsi Ave.

  • Victory Tower, 1 st floor

  • Nicosia 1082, Cyprus

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Disclaimer & Regulatory information
Eurivex Ltd is a Cyprus Investment Firm, authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC), License number 114/10.
Company Reg. HE 255430. Headquartered and based in Cyprus, member of EU.

Risk warning: Investing in financial instruments and other derivatives involves a high degree of risk and may not be suitable to all investors. Trading in such financial instruments can result in both an increase and decrease in capital. If you invest through Eurivex Ltd, the value of investments may go down and your capital will be at risk. Eurivex Ltd operates a secondary market but there is no guarantee that all buy/sell orders will be completed at the desired prices and there is a risk that an order may not be completed in the Eurivex secondary market if there is no matching order. There is no guarantee that you will be able to exit early by selling your investment. Eurivex Ltd does not provide investment, tax or legal advice. If you are unsure about the suitability of an investment, you should speak to a financial adviser. Please refer to our Risk Warning available on our web site for further information.