EU loses Another Listed Company To Russian Domiciliation

*The old Konigsberg Stock Exchange, now a museum*

The European Union has lost another listed company to Russian domiciliation as video analytics solutions developer NtechLab has completed redomiciliation from Cyprus to the Kaliningrad Region Special Administrative District. The entity will be known as IPJSC NTK. N-Tech.Lab LTD owns NtechLab’s main operational legal entity in Russia – NTech Lab LLC, which is a world leader in facial recognition software.

The company develops AI-based video analytics solutions for smart cities, healthcare, industry, transportation and other sectors, implementing projects for government and businesses in 34 countries, including in the Commonwealth of Independent States, Latin America, the Middle East and Asia, and more than 70 Russian regions.

NtechLab’s revenue doubled in 2024 to ₽1.7 billion (€18 million). According to Ntechlabs accounts, its total number of sales contracts increased by 2.5 times to 450 clients last year.

While Ntechlab may be a relatively small company, it is growing and is well-positioned in a significant hi-tech security market. The move is however damaging for the Cypriot professional services industry. Previously, Cyprus was a convenient jurisdiction for registering foreign companies and attracted Russia’s largest industrial and financial corporations. Under an agreement on the absence of double taxation, profits were not taxed in Russia, but were withdrawn to Cyprus, where the beneficial owners paid just 4.25% income tax.

However Cyprus, having joined the anti-Russian sanctions, began to reap the fruits of its own policy – the eighth package of EU sanctions, which banned the provision of accounting and consulting services to Russian companies, has hurt Cypriot law and accounting firms, whose portfolios of Russian clients used to be up to 40% of the national total.

That taxable income, and the employment services to support the business, will now be realised in Russia.