A new company called Yandex Europe B.V. was incorporated at the end of last year in Hague. Its share capital of 90 thousand euros belongs to the parent company Yandex N.V which also is the owner of Yandex LLC.
According to Yandex CEO Arkady Volozh, the decision to incorporate parent company in Netherlands was due to some irregularities in the law of Russian Federation for joint-stock companies. All of its taxes company pays in Russia; all of its active assets are also there.
So why would such uncomplicated structure need another level? In company PR department there was a brief explanation: “for economic needs”.
The journalists of the Russian business journal “Makler” are pointing to the incorporation papers of Yandex Europe B.V. According to those documents, the purpose of a newly established entity is “working with the electronic data, creating and developing data centers”. Netherlands are of course the popular destination for data centers, but some experts have a different opinion of what are the true reasons behind Yandex management decision.
It’s going to be 2 years now of active talks about the company plans to make IPO. The company came pretty close to doing that in 2008, but the world financial crisis interfered with company plans. Now the rumor has it that company is going to do an IPO at the beginning of 2011. According to financial reports of 2010, Yandex had a 43% increase in revenue. Although those results came as a surprise even to some of the more enthusiastic analysts, still the general opinion right now is that the market in Russia had reached its peak. Currently experts do not see a way for further growth in national market. According to them, establishing new affiliated company in Netherlands before IPO comes as a very natural move.
• Alexander Volozh interview “We were offered to get all of the biggest Russian internet companies under one roof” to the newspaper “Kommersant”, April 20, 2009 (in Russian)
• Internet journal “Finans” news article “Yandex is planning to get more then $1,5 millions during IPO”, November 29, 2010 (in Russian)
• Yandex press-release “Yandex’s Revenue Increases 43% YoY”, January 19, 2011
• Business newspaper “Marker” news article “Yandex has registered its affiliate company Yandex Europe B.V.”, January 21, 2011 (in Russian).