Based on the exploitation of many of Europe's poorest and most vulnerable citizens, and thanks to Malta's generous tax system, Russian and Latvian businessmen enjoy a luxury lifestyle and financial burden of near-zero taxes.
Fashion TV co-owner Oleg Boyko is a Russian billionaire who made his fortune during the ex-USSR's privatization frenzy in the 1990s, before turning to gambling, media and financial services. One of his recent major investments is in fast loans, where his companies supply small amounts of money to those in desperate need of cash. Their customers often end up repaying the loans at massive interest rates.
52 year-old Boyko is the 75th wealthiest Russian (according to Forbes), although he has an Italian passport, so enjoys all the rights of an EU citizen. He has hidden his fortune in Cyprus and the Bahamas, and purchased Latvian start-up 4finance in 2011, which provides fast loans with usury interest rates in Europe and America.
His company paid at least 105 million Euro for shares in this Riga-based business - cash which was distributed through Malta corporate structures to eight Latvian and Russian founders and beneficial owners. These Maltese companies do not appear to have one single employee and pay no significant corporate tax.
Additionally, in 4finance, which is expanding its fast loans operations to other continents, they established a system of loans to its shareholders with 15 per cent interest, through which the parent company drains the profits of subsidiaries from many European countries where 4finance operates. In this way 4finance Malta Ltd. collected almost 68 million Euro in loan interest between 2013 and 2015 and shifted profits from other countries to Malta, forwarding them to the parent company in Luxembourg.
Another Maltese company owned by Boyko financed a business operation providing fast loans in the USA with the help of Native American Indian tribes in Montana and Wisconsin with interest rates that can rise over 700 per cent.
According to Maltese legislation and tax practices, all these untaxed or low-taxed financial transfers are legal. This story reveals how Malta, which currently holds the EU presidency, attracts wealthy people and foreign corporations who want to avoid taxation in their own countries.
It shows in minute detail how rich people operate behind companies in tax havens - while their customers face ballooning debts that force them to leave their home country to find work to pay back interests on their loans.