RUSSIA: RISKS AND OPPORTUNITIES

RUSSIA: RISKSAND
OPPORTUNITIES.
SPECIALZONESANDCRYPTOCURRENCIES
BUSINESSCASES
Mauro Biasolo
mauro@safservice.com
+39 340 5787651
Nov 28th, 2019

1 Mauro Biasolo | www.safservice.com
CONTENTS
Intro
Why (Russia) Now?
Doing Business in Russia
Appendix
1

SAFSERVICE YOUR FINANCE DEPARTMENT IN
RUSSIA
HIGHLIGHTS
• More than 5
years in the
Russian market
• Technology to
support your
business
• Engaged in
AI/crypto
projects
CFO Co-founder CSO
We are in
CyprusMoscow Riyhad Dubai Padova Malta

CONTENTS
Why (Russia) Now?
3

WHYNOW?AFRAMEWORK FOR DECISION MAKERS

ROBUST ECONOMIC DRIVERS FOR SUCCESS
MASSIVE INVESTMENTS FROM THE GOVERNMENT TO
BOOST GROWTH
FOREIGN INVESTMENT REGIME
SPECIAL ECONOMIC ZONES + HIDDEN GEMS
The internal demand is
disappointing, and the
Government is expected
to use part of the excess
cash from the National
Wealth Fund (NWF).
The NWF totalled $122.9
billion as of Sept. 1.

TECHNOLOGY WILLREPLACE OIL& GAS
Technology
development
Top
Universities
in the IT and
science
Not only
Moscow and
St. Pet: look
to the East
Startups tend
to be local.
Room for
VC/angel
investments
Big focus on
AI
Take away
As many others O&G economies,
Russia is trying to diversify his economy
by focusing on innovation and
technology

SOCIALCHANGES SHOWANAPPEALLING MARKET
GROWTH
MINDSET
GROWING MIDDLE
CLASS (30%
population now)
A142 MILLION
POPULATION
LOOKING TO THE
EAST (SIBERIA)
STRONG EDUCATION
SYSTEM (13TH IN THE
WORLD) 1
1 https://www.bbc.com/news/business-27314075

RUSSIA– BIG IDEA
For UK entrepreneurs who are
looking for new markets, it’s NOW
available a combined mix of
technology/financial solutions to
minimize costs and risks of investing
in Russia.
Differently from other countries, the
local competition is still limited and
there are great unspotted
opportunities
8
NOW

CONTENTS
Doing Business in Russia
9

ECONOMY:ATOUGH PATH TO SECURE GROWTH
Source: 1 2016 rounded estimates, GDP statistics at purchasing power parity; source: The World Factbook
GDP $3.862 trillion: world rank 7th
GDP per capita $26,900: world rank 72rd
GDP composition Agriculture 4.7%, Industry 32.5%, Services 62.1%
Inflation rate 7%
Interest rates Central Bank - 10%, Commercial Bank - 12.59%
Exports
$281.9 billion – Petroleum and allied products, natural gas,
metals, wood products, chemicals, and civilian & military
manufactures
Export partners
Netherlands 10.5%, China 10.3%, Germany 7.8%, Italy
4.4%, Turkey 5%, Belarus 4.3%
Imports
$191.6 billion – Machinery, vehicles, pharmaceutical
products, plastic, semi-finished metal products, meat, fruits
& nuts, optical & medical instruments, iron, steel
Import partners
China 21.6%, Germany 11%, US 6.3%, Belarus 4.3%, Italy
4.4%, France 4.8%
Some statistics about Russia1
Russia’s most valued industries (based on top 10 exports)
USD$ million
$134.7
$14.1
$8.9
$6.8
$6.6
$6.5
$6.0
$5.6
$4.0
$3.3
Mineral fuels including oil
Iron, steel
Gems, precious metals
Machinery including computers
Fertilizers
Wood
Aluminium
Cereals
Electrical machinery, equipment
Copper

FDI INFLOW & INVESTMENTS OPPORTUNITIES
Source: 1 2016 rounded estimates, GDP statistics at purchasing power parity; source: The World Factbook
Transparency International ‘Corruption Perception Index’ (2016)
35/190
World Bank ‘Ease of Doing Business Rank’ (2017)
131/176
75.871
72.974
42.825
17.908
16.600
Wholesale and Retail Trade; Repair of
Motor Vehicles
Financial and Insurance Activities
Public Administration and Defence;
Compulsory Social Security
Information and Communication
Real Estate
147.971
48.108
48.066
30.851
29.940
19.859
18.528
17.548
14.873
14.834
Cyprus
Luxembourg
Netherlands
Ireland
Bahamas
Bermuda
Germany
United Kingdom
Singapore
British Virgin Islands
FDI Inflows by Country (top 10 countries)
USD$ million
FDI Inflows by Sector of Activity
USD$ million

INCENTIVES FOR FOREIGN INVESTORS:ALONG-
TERM STRATEGY IS REQUIRED
https://www.mckinsey.com/industries/financial-services/our-insights/blockchain-and-retail-banking-making-the-connection
 Special conditions
 Legislation
 Customs
 Income transfer
 Special tax regimes –
Far East & Siberia
 Special Economic Zone
RecommendationsSpecial Economic Zones (SEZ)
 49 year period
 Technology & innovation, port & logistic,
manufacturing, tourism & recreation
zones
 SEZ advantage of multiple benefits
 Start the preparation process early
 Sanctions concern
 EU & US economic sanctions in 2017

SEZ: ROBUST BENEFITS FOR TARGET INDUSTRIES
http://eng.russez.ru/investors/
Projected investor’s cost savings: 30%
HIGHLIGHTS
• Specific targets: Industrial
production, technology
innovation, tourism and port
• Taxes and social due
reduction
• Free Customs regime
• Guaranteed by the
Government
• Scientific and educative
centers

RUSSIAMOVINGTOEAST:FOLLOWBUSINESSNOTSTATEAIDS
Novosibirsk district
Big Opportunities
2nd research center
in Russia
High availability of IT experts (AI,
big data, science)
Issue: go-to-market
strategy is weak, and the
financing system
is not competitive
(Big USA corporates are already there)

RUSSIAMOVINGEASTERN:ABIGPORTCONNECTING RUSSIA, CHINAAND
USA
Novosibirsk district
Big Opportunities
Growth: 3x Russian
average
Attracted 32% of all FDI
Big Government funds
flowing there
(China/India are very active)
Vladivostock

Public
offer
16
 Equity
 Bond
 Titoli negoziabili
 Commodities
 Real estate
 Valuable
inventories
 Derivati
 Etc.
Assets
Tokenization
Subscription
 Compliance
 Market Authority
 Laws related to
trading
Geo selection
1
2
3
Complaint exchanges
Selection of the exchanges based on costs and
liquidity
 Assets are represented by tokens
and sent to wallets
 Roadshow with
institutional
investors
 Partnerships
 Planning and
execution of the
go to market
Bond Equity
Real
estate
Digital
bonds
Digital
equities
…
ExchangeEngaging public interest
SECURITYTOKENSOFFERING –THEKEYPOINTSOFANEW
FUNDRAISINGAPPROACH
Andriotto Financial Services - https://www.andriotto.com/

17
ICO IEO STO VC/PE and IPOs
Investors’
participation
Global participation possible.
Low entry barriers
Global participation potentially
possible, depending on
exchange governance
Large participation possible,
low entry barriers
Access only for qualified
investors
Capital Formation
Process
High cost efficiency
Cost efficient and scalable as
exchange can leverage
established investors
relationships
Much better cost efficiency vs
traditional security issuance
Complex security regulations
with high compliance costs
Token application
& liquidity
Various services & usage
opportunities depending on
typo of token; liquidity based
on secondary markets
Usage may vary depending
on token type issued; liquidity
in primary & secondary
markets
Full proof of ownership &
application of corresponding
features & rights; liquidity
provided by STO-enabled
exchanges
Share ownership via
established and regulated
custodian network (banks,
notaries, etc.)
Investor rights
No associated investor rights,
however, community may
enforce investor rights
Legally binding investor rights
(e.g. ownership rights, voting
rights, dividend rights) only for
security tokens
rights, dividend rights)
guaranteed by instrument type
rights, dividend rights);
enforced by regulators
IEO/STO/ICO VS TRADITIONALFUNDING
https://www.pwc.ch/en/publications/2019/ch-PwC-Strategy&-ICO-Report-Summer-2019.pdf

STO – REALESTATE
18
Security Token
case analysis:
Aspen Coin –
The First Real
Estate Security
Token Offering
Why
Real estate developers
 Fractional ownership
 Cheaper than funds
 Approaching smaller/
retail investors
Investors
 Investing in smaller size
 liquidity

BUSINESS CASE: HEALTH MONITOR
19
$500k
from crypto investors
IP
(partially funded by the Russian
government)
Now, installed worldwide
www.healthmonitor.pro

PROCESS MININGTOSTREAMLINEM&A(MEDIUMANDLARGE
COMPANIES)
20
M&A
Pre-
Consolid
ation
Post-
Consolid
ation
One
ERP
template
https://www.celonis.com/blog/erp-a-beast-of-burden/

DOINGBUSINESS IN RUSSIA
21
Interested in?
STO
Real Estate
Accounting,
Taxation & HR
Real Estate
Process
Mining & RPAAI & Crypto
Booth: 241

SAFSERVICE CONSULTING
Mauro Biasolo
VP Blockchain Dept.
E: mauro-biasolo@safservice.com
T: +39 340 5787651
W: www.safservice.com

CONTENTS
Appendix
23

24
Costs
Commissions and costs: exchanges, investment banks, advisors, lawyers, etc.
Decentralization (advisors, exchanges, etc.)
Availability of automatic tools to manage transactions (smart contract)
Legal Framework and compliance
Prices
Liquidity premium
Financial instruments offered to retails
Timing
Transaction time executing
Timing for emission/sales
Others
Minimum size of the operation
Flexibility
Maturity
IPO PE STO
STO–MAKINGIPOANDPRIVATEEQUITYOBSOLETE
Andriotto Financial Services - https://www.andriotto.com/

STO – REALESTATE SECTOR LOOKS PROMISING
For RE developers:
• Fractional ownership
• Cheaper than funds
• Approaching small/retail investors
www.andriotto.com
2
For investors:
• Investing in smaller sizes
• Liquidity (P2P and exchanges)
544
217
215
90
73 377
Derivatives
Real Estate
Debts
Liquidity
Equity Market
Currencies
Gold
Values of Assets that could be tokenized
($B)

ADECENTRALIZED FINANCE INFRASTRUCTURE
2
Take away
Over the course of the last 3 years
many applications were built to innovate
the financial service world. So far, it’s
more about experiments. By the way,
resources locked in Ethereum based
#defi are getting relevant and could
mark the next 2-3 years
https://medium.com/coinmonks/ethereum-the-digital-finance-stack-4ba988c6c14b

CUSTODIAL,TRADING & LOANING : WHATTHE
INDUSTRY IS LOOKINGAT
2
Take away
The crypto universe, as a new
asset class, can open new
revenue streams. The entry
barriers are:
a) Technology
b) Customers’ knowledge
https://www.mckinsey.com/industries/financial-services/our-insights/a-calm-surface-belies-transformation-in-securities-services
Classic security industry expected growth

STO BUSINESS CASES –ASPEN COIN
The first Real Estate STO project.
$18M were raised in the
USA(Colorado) to fund the
refurnished of a luxury resort
#fragmented equity ownership
https://aspencoin.io

STO BUSINESS CASES – BRAZILIAN BANK PLANNING
TO RAISE $15M THROUGHASTO

STO BUSINESS CASES – JULIUS BAERTO OFFER
DIGITAL ASSETS
Swiss banks (both private and
regional ones)are quite active in the
crypto industry.
Funds tokenization attract customers
(we are personally in touch with
companies working in this space)
https://aspencoin.io

STO BUSINESS CASES – EMAAR PLANNINGA$1B
MULTI-STEPS STO
In a recent piece on CoinDesk, CEO Saum
Noursalehi of Tzero, a security token trading platform,
announced that it has signed a letter of Intent with
Emaar, a big client which will issue security tokens on
its platform. As stated in CoinDesk piece “Dubai-
based real estate giant Emaar has signed a letter of
intent to issue tokens on tZERO. Emaar owns luxury
residential and commercial high-rises, including the
world’s tallest building, the Burj Khalifa in Dubai.”
Emaar had recently announced plans to carry out a
community loyalty token partnership with Lykke. It also
eluded to an ICO offering within 12 months.
In the Coindesk piece Noursalehi states, “At first,
Emaar will do some initial small, proof-of-concept
issuance to prove it out. Although the company is
looking into launching a token issuance project as big
as $2 billion in the next couple of years, no timeline or
other details of the future deal are set now, he adds,
but “we want to get a definitive contract in the next
week or two.”
https://www.unlock-bc.com/news/2019-05-10/emaar-moving-forward-with-its-security-token-offering

STO BUSINESS CASES – ITALIAN BANK TO DIGITALIZE
$100M NPL+ OTHERS
• An Italian bank has just signed a contract with one of our partner to put $100M of
NPL on a blockchain
• A real estate debt platform from Eastern Europe is going to launch a $85M STO
• An Italian web platform is going to launch a $20M STO campaign (equity)
www.blueshare.io

STO BUSINESS CASES – BRAZILIAN BANKAND
DALMACAPITAL
BTG Pactual, Brazil’s fifth largest bank, plans
to utilize the Tezos blockchain for security
token offerings potentially worth $1 billion.
For the effort, BTG – also Brazil’s largest
standalone investment bank – will team
with Dubai-based asset manager Dalma
Capital.
In a press release published Wednesday, the
two firms said they would use the Tezos
network for the sale of digital securities to
“address a deal pipeline in excess of $1bn for
existing and prospective token issuances.”
The deals include the ReitBZ tokenized
property offering announced in February, and
would further cover a variety of traditional and
alternative investments, they noted.
https://www.coindesk.com/brazilian-bank-plans-to-use-tezos-blockchain-for-stos-worth-1-billion

RUSSIA: RISKS AND OPPORTUNITIES

Recommended

Recommended

More Related Content

What's hot

What's hot (12)

Similar to RUSSIA: RISKS AND OPPORTUNITIES

Similar to RUSSIA: RISKS AND OPPORTUNITIES (20)

Recently uploaded

Recently uploaded (20)

RUSSIA: RISKS AND OPPORTUNITIES