The Russian online hypermarket of household, garden, construction and repair items “VseInstrumenty.ru” has moved its holding company from Cyprus to Russia.
Analysts surveyed by RB.RU had divided opinions on the benefits of the solution for companies: some believe that such changes can reduce the economic and legal risks of companies, while others point to the insecurity of minority shareholders in Russia and the lack of external financing.
At the same time, experts agreed that there is a stable demand for DIY products in Russia and that VseInstrumenty.ru has a strong position in this market.
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Changes in the ownership structure of VseInstrumenty.ru LLC are reflected in the Unified State Register of Legal Entities. The press service of VseInstrumenty.ru RB.RU confirmed the fact of the holding’s new registration in Russia.
“On May 6, 2024, the Russian joint-stock company VI.ru became 100% owner of VseInstrumenty.ru LLC, replacing the Cypriot company Haverburg Enterprises Limited,” a company representative said. — VseInstrumenty.ru is based and generates revenue in Russia. “The transfer of the holding company to Russia is consistent with our development strategy.”
The new owner of VseInstrumenty.ru LLC was registered in the Vladimir region on March 28, 2024. Irina Egorova, head of corporate and tax practice at the Intercession law firm, believes that in this case the process cannot be called redomiciliation. “If we were talking about redomiciliation, it would be one of the Russian offshore companies in Vladivostok or Kaliningrad,” says the expert.
How AKIT and Infoline evaluated the changes
Infoline CEO Ivan Fedyakov called the changes an “expected move”:
“Right now, the vast majority of companies that want to continue operating in Russia are forced to do so, as their legal entities outside Russia run out of cash flow and face many other problems.”
Reregistering a company of Russian origin in its home country rather than in a foreign jurisdiction is a logical step for many companies, agrees AKIT president Artem Sokolov. In his opinion, in recent years this process has been significantly simplified and, in general, these changes can reduce the economic and legal risks of business.
Fedyakov sees more disadvantages than advantages in re-registering as a company in the Russian Federation. Companies are isolated from external financing and the rights of minority shareholders are not protected, as they are protected by the so-called London law (Cypriot law allows working with shareholders in accordance with it), he explains.
Infoline’s CEO believes that the company’s domestic activities will remain the same. If the retailer is interested in expanding the business further, this will most likely involve other legal entities and other projects.
“VseInstruments.ru” on the market of DIY products in Russia
“VseInstrumenty.ru is one of the largest e-commerce companies operating in the DIY segment; It is the leader in the number of online orders from companies and private customers in its category. Of course, in the future it has possibilities to expand its market position, including strengthening its regional presence, where the market is more fragmented,” Sokolov noted.
“The company will continue operating in Russia as before. The niche they occupy in Russia among offline retailers and marketplaces will continue to strengthen. “VseInstruments.ru” enjoys a good position, although, of course, in the future the competition will be tougher,” adds Fedyakov.
- In Russia there is a stable demand for DIY products. Thus, the “tools” category in online commerce has shown high growth in the last four years, notes AKIT. In the first quarter of 2024, the category saw 133% year-over-year sales growth, according to the association.
- According to Infoline, in March 2024, the online hypermarket “VseInstrumenty.ru” became a rapidly growing leader in the TOP ranking of DIY Retail Russia. Over the course of the year, the company opened 254 new points of sale and the total number of points of sale increased to 908. Also in 2023, VseInstrumenty.ru increased its assortment, exceeding the level of 1.5 million SKUs.
Author:
Anastasia Marina
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
