Investments abroad — current opportunities and risks for Russian investors

For Russians, investing abroad has become a significant problem due to the large number of sanctions restrictions. Moreover, it is not only obvious prohibitions that apply.

There are unspoken rules. According to them, some funds that, at first glance, are available for investment to Russians, refuse them. Even if citizens of the Russian Federation transfer capital through a management company in Kazakhstan or another country not subject to sanctions.

Now for many Russian investors, the most important thing is not what stocks to invest in abroad, but how to do it with minimal risk of getting blocked by financial assets or getting into trouble with the Russian authorities.

Let’s consider all options for foreign financial investment. Let’s figure out how to choose a reliable investment fund with shares abroad. Let’s talk about the risks and expenses associated with such investments and which stocks to invest in in 2024.

⛳ Freebies will help you sit down calmly and figure out whose shares are profitable to buy today help and advice Rating Forex. It will become clear to you 💡, which securities actually make money. It will also be very easy to find stocks worth investing in 💰.

Investments from Russia abroad. Who needs it?

So far, Russian legislation does not prohibit investing in foreign assets. The green light is on even for those countries that have imposed sanctions against the Russian Federation.

The main condition is to provide all information about foreign financial investments to the tax authorities. But even this can be technically circumvented if you first transfer capital to a foreign account, and from there you can choose which shares to buy in 2024.

There is a real opportunity to legally invest money abroad. But only from the point of view of the laws of the Russian Federation. Another thing is foreign banks, brokers and regulators. They have a completely different attitude towards Russians’ money.

Before considering investing in foreign stocks, bonds, funds, you need to understand why this is required. If the investor’s main income is tied to the Russian ruble, and expenses are also only within the Russian Federation, it makes sense to take a closer look at Russian financial assets. Even the most conservative of them can bring double-digit profits. This means that there is no particular point in investing abroad.

It’s another matter when expenses and savings are in dollars. Then the depreciation of capital against the background of the fall of the ruble is clearly felt. 10–20% profit does not solve the problem. There will definitely be losses.

So far, the Russian financial system is relatively stable. But every year the situation is getting worse. Export revenues, foreign exchange reserves, and funds will soon not be able to cover the costs of supporting the Russian national currency at the level of ₽ 90–95.

⛳ Some analysts believe that devaluation will begin in the summer of 2024. Although smooth, but constant. From this point of view, the question “Is it worth buying shares abroad now?” is removed. Perhaps this is one of the few chances to somehow protect 🛡️ capital against the backdrop of devaluation.

How to invest abroad

If we ignore alternatives like buying Bitcoin, altcoins, real estate and exporting gold abroad with subsequent sale, there are 2 ways to invest in foreign assets:

• 💵 bank account,
• 💵 brokerage account.

You can try to transfer capital in order to later participate in stock trading.

Problems with bank accounts abroad

If you try to invest from $200,000 to $1,000,000, there will definitely be difficulties. Most foreign banks are not interested in such clients. They view them as retail. They are still not very willing to get involved with Russian money.

⛳ If an investor wants to invest $3-5 million, the situation is better. Such clients attract bankers’ interest. They can receive maximum assistance in opening an account.

Brokerage account features

If the deposit is modest, it makes sense to look towards accounts with foreign brokers. For example, Interactive Brokers still deals with Russians. Almost all intermediaries from Armenia, Kazakhstan and Uzbekistan also work with them.

⛳ Since 2023, Interactive Brokers has imposed a number of restrictions on the accounts of Russian citizens. But it still continues to work in the country.

IN What companies and assets can be invested through foreign brokers?

• 🖋️ In promotion.
• 🖋️ In bonds.
• 🖋️ In ETFs.

Warning: There will be difficulties with using leverage. Not all foreign intermediaries allow Russians to trade with borrowed capital.

There may be problems with transferring money from a Russian bank to a broker abroad. Many of them are disconnected from global money transfer systems. To get around this, you can use foreign financial institutions that still operate in the Russian Federation. They are able to convert the ruble into foreign currency and transfer it to a brokerage account.

It is possible to select banks from countries that accept rubles. We are talking about Georgia, Armenia, Kazakhstan, Kyrgyzstan, Serbia, Montenegro, Tajikistan. You can’t count on Azerbaijan and Uzbekistan due to strict barriers to currency transactions outside the country.

Transferring dollars through these states will be even more difficult. Most local banks are unable to provide stable, secure transactions. There are 3 options: BNY Mellon, JPMorgan Chase & Co and Citibank.

⛳ Before choosing a bank, make sure that it supports transfers to the brokers you are going to work with. If the cash goes through intermediaries, the transaction will be cancelled. Banks in Europe do not accept money from Russians.

You can try to top up your account in alternative currencies through banks in the Russian Federation. Suitable for this:

• ✅ dirham
• ✅ Yuan,
• ✅ Hong Kong dollar.

They need to be transferred to the partner bank. Then convert to dollars.

⛳ There may be problems. Banks in Turkey, China and other Arab countries began to actively slow down Russian financial transactions.

Is it possible to buy foreign shares?

If you manage to open an account with a broker and start trading, this does not mean that everything will go smoothly. Restrictions in relation to the Russian Federation are introduced non-stop. Local investors have fewer and fewer opportunities abroad.

⛳ Risks are rising. They can be very serious – from restricting financial transactions to completely closing accounts.

PAn interesting alternative appears. We are talking about the transfer of capital to a management company registered in one of the countries that have not imposed sanctions against Russia. The only relatively safe option for such investment is an omnibus account. The money of several clients is stored there. This reduces the likelihood that brokers will have questions about their origin.

The investor retains access to funds. But the broker or management company will do the trading. As a rule, they choose a fund abroad where they invest their money.

⛳ DEven here, not everything is so simple. You won’t be able to buy the most trusted, interesting over-the-counter funds ⛔. Their administrators tend to check the final beneficiaries when they receive an application from management companies from countries friendly to the Russian Federation. If Russians are seen among them, the request is rejected 🚫.

Bwill there still be expenses?

Foreign investment solely due to commissions, conversions will cost 3–4% of capital. Fees can, at best, drop to 1.5–2% when sending euros or dollars through foreign banks to the Russian Federation. Only they will still have to pay another 2-3% for currency transactions from Russia.

What to invest in

If you still manage to enter the foreign market, it is better to choose US blue chips. Especially the technology sector.

A good idea is to pay attention to reliable, loyal funds. There are few of them, but they still exist. At the same time, you need to constantly monitor the situation. New restrictions may appear on both sides at any time.

Council Rating Forex – take a closer look at the shares:

• 🔎 Pfizer Inc (PFE). Dividend yield is 6%. Growth forecast: 16–40%.
• 🔎 Verizon Communications Inc. (VZ). Dividend yield – 6.69%. Analysts believe that the security will increase in price by 25–38%.
• 🔎 Enbridge Inc. (ENB). Dividend yield – 8.2%. According to experts, the stock will rise in price by 21%.
• 🔎 Apple (AAPL). Dividend yield – 0.53%. According to analysts, by the end of the year the price will increase by 21%.
• 🔎 Intel (INTC). Dividend yield – 1.56%. Analysts believe that by the end of the year the stock will trade 19% more expensive.

Information about available funds changes non-stop. Those that are still available to Russians do not look too profitable and safe. Therefore, Rating Forex does not provide recommendations.

When choosing a fund, carefully analyze its history and attitude towards Russian investments. Pay attention to the country in which it is located.