CFC, currency control and auto exchange: what is important for a Russian with a Vanuatu passport in 2026

Briefly: what does a passport change and what doesn’t?

Vanuatu citizenship gives you a second document and the right to live in a country with zero taxes. But a Russian’s obligations to the Russian tax authorities are determined not by his passport, but by two statuses: tax residency and currency residency of the Russian Federation. The second passport in itself does not change either one or the other.

In short: while you are a tax resident of the Russian Federation, you are required to report on controlled foreign companies (CFCs), notify about the opening of foreign accounts and comply with currency restrictions - exactly the same as without a second passport. The rules really change only when you cease to be a tax resident of the Russian Federation and/or spend more than 183 days a year abroad.

• Vanuatu passport changes: freedom of entry into a number of countries, the right to zero taxes within Vanuatu itself, the opportunity to safely spend time abroad.
• Vanuatu passport does NOT change: responsibilities of a tax resident of the Russian Federation, CFC rules, currency control requirements, participation of your banks in auto exchange.

This article is a continuation of the analysis of the topic Vanuatu passports for Russians. Here we focus specifically on financial compliance.

Two residencies that are easy to confuse

In Russian law, “residency” is two different concepts, and for financial compliance it is important not to confuse them. Citizenship (passport) is the third dimension, and it almost does not overlap with the first two.

Tax residency determined by Article 207 of the Tax Code of the Russian Federation: you are a tax resident of the Russian Federation if you are in Russia for at least 183 days within 12 consecutive months. This status determines whether you are required to pay tax on global income in the Russian Federation and report on CFC.

Currency residency it is structured differently: according to the law on currency regulation, all citizens of the Russian Federation are recognized as currency residents. But for those who spend more than 183 days abroad in a calendar year, a special, lighter regime applies.

The main conclusion: in order for something to really change in your responsibilities to the Russian Federation, you need to change not your passport, but the number of days in Russia and your country of tax residence. More on this in the sections below.

CFC: responsibilities of a tax resident of the Russian Federation

A controlled foreign company (CFC) is a foreign organization (or a foreign structure without forming a legal entity) that is controlled by a tax resident of the Russian Federation. If you remain a tax resident of Russia and own a stake in a foreign company - including one registered in Vanuatu or elsewhere - the CFC rules apply to you regardless of your second citizenship.

You are recognized as a controlling person if at least one of the following conditions is met:

• your share in a foreign company exceeds 25%;
• your share exceeds 10%, while the total share of all tax residents of the Russian Federation in this company exceeds 50%;
• you exercise control over the company in your own interests (through participation in the contract, actual management, etc.).

The controlling person has two groups of responsibilities, and it is important not to mix them up:

The key point where many people get it wrong: a CFC notification is submitted even if there is no need to pay tax. CFC profits below 10 million rubles for the period are not included in the tax base - but this is an exemption from tax, not from reporting. Notification is also required for an unprofitable company. The fine for failure to submit is 500,000 rubles for each CFC.

Since 2026, the conditions for applying certain benefits for CFC profits have been tightened: for example, to be exempt under “active holding”, the company must be in a jurisdiction with a double tax treaty with the Russian Federation, not in an offshore location, and with a corporate tax rate of at least 15%. Vanuatu, as a rule, does not meet these criteria, so you should not count on automatic release on this basis. The specific set of benefits that apply depends on the structure - this is a matter for consultation on your situation, not a one-size-fits-all answer.

Currency control and accounts abroad

This is where the real difference appears - but not because of the passport, but because of the number of days outside the Russian Federation. The Currency Regulation Law divides resident citizens into two categories based on the time spent abroad.

General mode - for those who spend 183 days or more in the Russian Federation in a calendar year. These persons are obliged:

• notify the tax office about the opening, closing and changing the details of a foreign account - within one month;
• annually submit a report on the movement of funds in foreign accounts;
• carry out only permitted currency transactions on accounts (the list is in Articles 9 and 12 of the law).

Special mode - for those who spent more than 183 days abroad during the calendar year. For them, the relaxations are significant:

• exemption from the obligation to notify the Federal Tax Service about the opening/closing of foreign accounts;
• exemption from the annual report on the flow of funds on such accounts;
• removal of most restrictions on the list of permitted transactions - funds can be freely credited and used.

Important: the criterion here is again days abroad, and not the presence of a Vanuatu passport. You can have a second passport and still remain on the general regime if you spend most of the year in Russia. And vice versa - you can not have a second passport at all, but end up under a special regime after spending more than six months abroad. The Vanuatu passport itself does not switch these statuses.

It is worth remembering separately: the special regime for currency control and the loss of tax residency are different things that often coincide in fact (a person leaves), but are regulated differently. You can stop being a currency resident under the general regime, but still not understand your tax status - and vice versa.

CRS: what is actually transmitted and where

CRS (Common Reporting Standard) is an international standard for the automatic exchange of financial information developed by the OECD. According to it, banks and financial organizations of the participating countries collect data on the accounts of non-resident clients and, through their tax authorities, transfer them to the countries of tax residence of the account holders.

The main thing you need to understand about CRS and the second passport: the exchange is based on accounts, and not on the basis of citizenship. The bank determines which jurisdiction to report data to based on the client’s tax residence and indicators (address, phone number, place of birth), and not based on what passport you have. A Vanuatu passport does not “hide” the account from exchange - what matters is what tax residence you indicated to the bank and how much it corresponds to reality.

The status of Vanuatu itself in the CRS system is as follows:

• Vanuatu signed the Multilateral Competent Authority Agreement (CRS MCAA) back in 2018 and is formally a member of the auto exchange;
• at the same time, Vanuatu is classified as a jurisdiction with a temporarily non-reciprocal status - that is, it transfers information to partners, but does not yet receive incoming data itself (until the requirements for confidentiality and data protection are met);
• There is currently no actual exchange with Russia: Vanuatu is not included in the current list of the Federal Tax Service of states with which the Russian Federation automatically exchanges financial information.

What does this mean in practice? A bank account in Vanuatu itself does not automatically go to Russia via CRS now. But if you, having a Vanuatu passport, hold an account in a country that exchanges money with the Russian Federation, and at the same time are listed as a tax resident of the Russian Federation there, the data on this account will be transferred to the Russian Federal Tax Service in the usual manner. That is, it is not your passport that protects, but your actual tax status and the bank’s jurisdiction.

Separately: from 2025-2026, the international standard has been expanded - the exchange includes data on crypto assets (CARF framework) and an updated version of CRS. This is a general trend towards narrowing “gray areas”, and building a long-term strategy on the assumption that some account is “invisible” is risky.

What really frees you from obligations to the Russian Federation?

If we put all of the above together, we get a simple and thesis: a Vanuatu passport is about mobility and about zero taxes within Vanuatu itself, but not about automatic exemption from Russian duties. It is not the document that liberates, but the change of status.

• To stop paying tax on global income in the Russian Federation and reporting on CFC - you need to cease to be a tax resident of the Russian Federation (spend less than 183 days in Russia in 12 months and, as a rule, become a tax resident of another country).
• To remove reporting and restrictions on foreign accounts - you need to fall under the special currency regime (more than 183 days abroad in a calendar year).
• So that the account does not go to the Russian Federation via CRS - what matters is the tax residency declared to the bank and the jurisdiction of the account, not the presence of a second passport.

Vanuatu itself has attractive conditions: there is no tax on income, on capital gains, on inheritance and on world income - all rates are zero. Therefore, Vanuatu can be a convenient element of the structure for those who do change residence. But it is precisely an element, and not a “turn off button” of Russian rules. More details about the fiscal side can be found in the material about taxes in Vanuatu.

And let us separately recall what we write about in all materials: since December 2022, the EU has suspended the visa-free regime for Vanuatu passports, and there is no Schengen for it now. If European mobility is important to you, compare Vanuatu with other programs: Vanuatu vs Dominica and review Caribbean passports.

Common misconceptions that lead to people losing money

Most of the problems Russians have with a second passport arise not because of the programs themselves, but because of incorrect expectations. Here are the common mistakes.

• “I have received a passport - you don’t have to submit a CFC notification.” No. While you are a tax resident of the Russian Federation, the obligation remains, the fine is 500,000 rubles per company.
• “The profit of a CFC is less than 10 million, which means there is no need to file anything.” No. This is a tax exemption, not a notice exemption. The report is submitted even if there is a loss.
• “I opened an account for a Vanuatu passport - they won’t know about it in the Russian Federation.” Not a fact. The exchange is based on tax residency, not passport; and the obligation to notify the Federal Tax Service about the account depends on your currency regime, and not on your citizenship.
• "I changed my passport - I changed my tax residence." These are different procedures. Tax residency is determined by the days of stay, not by receipt of a document.
• “If you go abroad, you are immediately a non-resident.” The status is calculated by days per period; The mere fact of moving is not enough; you need to track 183 days.

For each of these situations there are specific deadlines, forms and sanctions. There is no universal recipe: everyone has their own structure, and the correct procedure is determined individually. Therefore, we do not give prescriptive advice here - before taking any steps, you need advice on your specific situation.

How to get everything right with BRIDGES GLOBAL

Financial compliance with a second passport is not a one-time action, but a combination of several statuses that need to be agreed upon: tax residency, currency regime, ownership structure of companies and accounts. An error in one link nullifies the benefit from the rest.

BRIDGES GLOBAL helps you go through this entire path: from obtaining Vanuatu citizenship by investment before building the correct tax and currency configuration - taking into account CFC, foreign accounts and auto exchange. We show where a passport works and where a change of residence is needed, and we do not promise what the program does not provide.

If you're weighing Vanuatu against other options for speed and cost - check out the review fastest second citizenships. And when you are ready to analyze your specific situation regarding CFC, accounts and residence - leave a request for a consultation: we will suggest a procedure for your structure, without template promises.

BRIDGES analysis on this topic: what zero tax actually gives.

BRIDGES service: Vanuatu citizenship by investment with BRIDGES support.