First move: Buying up Maltese near-zero tax scheme
Romanian lawyer Adrian Cuculis says clients of fast loans constitute one third of his cases – a number in the high hundreds.
Zaplo IFN is not a standalone Romanian company. It is subsidiary of Latvian based AS 4finance which operates in 17 European and American countries.
4finance claims to be “Europe’s largest and fastest growing online and mobile consumer lending group”. Since establishing in 2008, it has provided more than 11.5 million loans totalling over 4.0 billion Euro.
But interest rates can increase to even 2,000 per cent per year. This has caught the attention of consumer protection agencies.
In 2016, the Finnish Consumer Ombudsman applied for an injunction on a 4finance subsidiary on the grounds of unlawful credit granting practices – stating that a 2,010 Euro credit could balloon into 4,145 Euro in six months due to late payments.
In Denmark, 4Finance subsidiary Vivus violated Danish marketing laws by stating on the website that the interest rate on a loan was 19 per cent. According to the Danish consumer ombudsman, the correct figure would have been 730.1 per cent.
While 4Finance preys on vulnerable citizens across the continent, The Malta Files can reveal useful link how its former and current owners are using tax avoidance schemes in Luxembourg, Cyprus and the Bahamas. The full report on this story is here.
According to documents obtained by European Investigative Collaborations, its eight Latvian shareholders ran the fast loans business through a Maltese company, Fatcat Investments Ltd
But one of the most important tax friendly country for beneficial owners who profit from poor European citizens with usurious fast loans is – Malta.
Oleg Boyko: Payday Godfather
The current owners of 4finance are Russian billionaire Oleg Boyko and his Latvian partners. They enjoy a lavish lifestyle in contrast to their clients, who are usually the working poor, captured by the marketing trap of quick and easy cash loan.
With an estimated wealth of 1.2 billion USD, Boyko is the 75th most wealthy Russian, according to Forbes. He is an owner of global private investment group Finstar Financial, which had two billion USD assets under its management in 2016.
Boyko’s Ritzio International owns more than 150 gambling clubs in countries such as Germany, Italy, Romania and Croatia. Besides Russian citizenship, Boyko obtained Italian passport in , and is a European Union citizen. Through the British Virgin Islands company FTV BVI Ltd, Boyko co-owns the Fashion TV channel, which reaches hundreds of millions of viewers in more than 140 countries. He’s also connected to the Moscow elite – with close friends in Russian billionaire and Chelsea FC owner Roman Abramovich and first deputy Prime Minister of Russia Igor Shuvalov.
During summers, when he is not at his luxury villa in Blevio at Lake Como in Italy, he rides the 45-meter long Blade, one of the fastest yachts in the world. But he has also shown a recent passion is Hollywood films. He co-produced Frank Miller’s Sin City: A Dame to Kill For and it has been announced that he is co-producing the directorial debut of ‘The Avengers’ and ‘Lost in Translation’ actor Scarlett Johansson, called Summer Crossing.
In , Boyko bought 75 per cent of Latvian-based start-up AS 4Finance, which had subsidiaries at that time in Lithuania, Sweden, Finland and Denmark.
Boyko offered 55 million Euro for AS 4finance. The first tranche of 12 million Euro boosted Fatcat’s profits to 26 million Euro before taxes in 2011.
Due to the attractive tax rates in the nation of 450,000 people, Fatcat Investments paid only seven per cent in effective corporate tax – two million Euro. The EU average for corporate tax is about 22 per cent.