Wealthy Russians are increasingly using private foundations in neutral jurisdictions to shield billions of dollars from Western sanctions and secure assets for heirs, with registrations soaring following legal changes in Moscow.
Surge in foundation registrations follows legal changes
Russian business elites have turned to private foundations as a primary vehicle for asset protection, with new registrations increasing by more than 200 percent to exceed 600 entities. This dramatic rise followed amendments to Russian legislation that simplified foundation creation and guaranteed complete confidentiality for beneficiaries. The structures allow founders to maintain control over assets throughout their lifetime while legally separating ownership from individuals.
Neutral jurisdictions provide anonymity shield
A detailed Bloomberg investigation published in March 2026 revealed that the United Arab Emirates, China’s Hong Kong, and other ‘friendly’ jurisdictions have become preferred locations for these wealth protection structures. In the Emirates alone, Russian citizens established between 40 and 50 new foundations during 2025, according to Dubai consulting firm M/HQ managing partner Yann Mrazek. These locations offer high levels of anonymity and protection from European regulatory inquiries.
Legal structures complicate asset tracking
Private foundations create substantial obstacles for Western regulators attempting to identify ultimate beneficial ownership. Assets transferred to foundations legally cease to belong to their original owners, making them inaccessible to asset freeze orders issued against specific oligarchs. Many businessmen use the structures as family ‘testing grounds’, appointing children or relatives to governing bodies while maintaining operational control. This separation formally transfers ownership to heirs while allowing sanctioned individuals continued access to resources.
Western sanctions face adaptation challenges
Despite expanded European Union and Swiss bans on trust services for Russians, wealthy individuals have adapted by hiring lawyers and administrators in neutral jurisdictions. This parallel financial infrastructure ignores Western regulatory requirements for sanctions enforcement, ensuring capital preservation for targeted persons. The mechanisms allow international financial operations through intermediaries while concealing fund origins and connections to sanctioned Russian entities.
International coordination needed for effectiveness
Effective countermeasures against private foundation abuse require harmonised sanctions regimes between the EU, United States, United Kingdom, and key financial centres like the UAE and Switzerland. Increased pressure on jurisdictions providing capital concealment tools must accompany secondary sanctions against financial institutions servicing anonymous private foundations. Without coordinated international action, these legal structures will continue providing safe harbours for wealth shielded from confiscation through judicial channels.
