Russian Investors: USA Investment Under Sanctions
Legal pathways for Russian nationals to invest in US markets under OFAC sanctions regime
Current Situation Overview
List Screening Required
Ownership Rule
Banks Disconnected
Compliance Risk
Who Can Still Invest Legally
Despite extensive sanctions, many Russian nationals can still legally invest in the United States. The key distinction is between sanctioned persons and non-sanctioned Russian citizens:
Generally Permitted
- Non-sanctioned Russian citizens
- Russian permanent residents abroad
- Dual nationals (with non-Russian citizenship)
- Russians with legal residency in EU/UK/UAE
Prohibited (SDN List)
- Named individuals on SDN list
- Russian government officials
- Oligarchs on sanctions lists
- 50%+ owned by sanctioned persons
Understanding OFAC Sanctions
Types of Russia Sanctions
| Sanction Type | What It Blocks | Who Is Affected |
|---|---|---|
| SDN List (Blocking) | All assets frozen, no transactions | Named individuals/entities |
| Sectoral Sanctions (SSI) | Specific transaction types blocked | Russian financial sector, energy, defense |
| Correspondent Banking | No USD clearing for listed banks | Major Russian banks |
| SWIFT Disconnection | No international wire transfers | 12+ Russian banks |
| 50% Rule | Entity blocked if 50%+ owned by SDN | Companies, trusts, LLCs |
For comprehensive sanctions compliance guidance, see our OFAC Sanctions Screening Guide.
Screening Process
Before any US investment, Russian nationals must undergo thorough sanctions screening:
Required Checks
- OFAC SDN List search
- Sectoral Sanctions (SSI) check
- EU/UK sanctions cross-reference
- Beneficial ownership analysis
Documentation Needed
- Passport (Russian and foreign if dual)
- Proof of residence abroad
- Source of funds documentation
- Employment/business verification
SWIFT Disconnection Impact
Which Banks Are Disconnected
Major Russian banks have been removed from the SWIFT international payment network:
| Bank | Status | Alternative |
|---|---|---|
| Sberbank | Disconnected from SWIFT | Cannot send USD directly |
| VTB | Disconnected from SWIFT | Cannot send USD directly |
| Alfa-Bank | Disconnected from SWIFT | Cannot send USD directly |
| Gazprombank | Limited SWIFT (energy payments) | Energy sector only |
| Raiffeisenbank Russia | Still connected (as of 2025) | Limited functionality |
Practical Impact
What You Cannot Do
- Wire USD from Russian bank to US bank
- Use Russian debit cards in USA
- Receive USD to Russian accounts
- Direct brokerage funding from Russia
What Is Still Possible
- Transfer via third-country bank
- Use cryptocurrency (with compliance)
- Open accounts while abroad
- Invest through non-Russian entities
Third-Country Routing
How It Works Legally
Non-sanctioned Russian nationals can legally move funds through intermediate countries with banking relationships to both Russia and the West:
Common Transit Countries
- Kazakhstan (Kaspi, Halyk Bank)
- Armenia (Ameriabank, Ardshinbank)
- Georgia (Bank of Georgia, TBC)
- UAE (ADCB, Emirates NBD)
- Turkey (certain banks)
Requirements
- Legal residency or presence
- Pass local KYC/AML checks
- Source of funds documentation
- Tax compliance in transit country
Compliance Requirements
Third-country routing must be done with full compliance to avoid sanctions evasion charges:
| Requirement | Why It Matters |
|---|---|
| Genuine residence/presence | Shell arrangements are red flags |
| Source of funds proof | Banks require clean money trail |
| Proportional amounts | Sudden large transfers trigger review |
| Declared purpose | Investment purpose must be clear |
| Tax reporting | Report in all relevant jurisdictions |
Cryptocurrency Options
Legal Use of Crypto
Cryptocurrency can provide banking alternatives but comes with significant compliance considerations:
Potentially Viable
- Converting RUB to stablecoin (USDT/USDC)
- P2P exchanges in third countries
- Licensed exchange with KYC
- Documenting all transactions
Red Flags to Avoid
- Mixing services (chain obfuscation)
- Sanctioned exchange use (Garantex)
- Undocumented P2P trades
- Structuring to avoid reporting
Practical Path
A compliant crypto pathway typically involves:
- Establish residence in non-sanctioned jurisdiction (UAE, Kazakhstan, etc.)
- Open bank account in new jurisdiction
- Use licensed local exchange with full KYC
- Convert crypto to fiat in new jurisdiction
- Wire from new jurisdiction bank to US
- Maintain complete transaction records
US Entity Formation
LLC vs Corporation for Russians
Entity choice for Russian investors involves unique considerations:
| Factor | LLC | Corporation |
|---|---|---|
| Ownership disclosure | Required (BOI reporting) | Required (BOI reporting) |
| Bank account opening | Harder with Russian owner | Harder with Russian owner |
| Real estate holding | Preferred structure | Less common |
| Brokerage accounts | Limited options | Limited options |
State Selection
Wyoming LLC
- Strong asset protection
- No state income tax
- Accepts foreign owners
- Privacy (but BOI required)
Delaware LLC
- Business-friendly courts
- Well-established law
- Standard for investments
- Higher formation costs
Florida LLC
- Best for FL real estate
- Strong homestead protection
- No state income tax
- Good for rental property
Opening US Bank Accounts
Realistic Expectations
Opening US bank accounts as a Russian national is extremely difficult but not impossible:
Major Banks (Chase, BofA)
- Generally decline Russian nationals
- Automatic compliance flags
- Even with US visa/residence
- Not recommended to attempt
Possible Options
- Regional/community banks
- Credit unions (with relationship)
- Mercury (for business, case-by-case)
- Relay (fintech, may work)
What Improves Chances
Positive Factors
- US visa (especially E-2, L-1)
- Green card holder
- Dual citizenship (especially EU)
- Extended residence outside Russia
- Clean source of funds
Required Documentation
- OFAC clearance letter from counsel
- Source of funds evidence
- Foreign residency proof
- Tax returns (any jurisdiction)
- Business purpose explanation
Frequently Asked Questions
Am I automatically sanctioned because I am Russian?
No. Russian nationality alone does not mean you are sanctioned. OFAC sanctions target specific individuals, entities, and sectors. Ordinary Russian citizens who are not on the SDN list and do not work for sanctioned entities can legally invest in the USA. However, practical barriers (banking, compliance reviews) remain significant.
Can I buy US real estate?
Yes, if you are not sanctioned. Real estate purchase is possible, but challenges include: (1) Getting funds to the US, (2) Opening title/escrow accounts, (3) Finding title companies willing to work with Russian buyers, (4) Florida has additional restrictions near military bases. Cash purchases are more feasible than financed purchases.
Can I open a US brokerage account?
Very difficult from Russia. Interactive Brokers and others have closed Russian resident accounts. Options: (1) Establish genuine residence in another country first, (2) Use third-country brokers that accept Russians and offer US market access, (3) Consider European brokers with US market access from your new residence.
What if I move to another country?
Relocating to a non-sanctioned jurisdiction (UAE, Kazakhstan, Armenia, Georgia, Turkey) significantly improves your options. With genuine residence abroad, you can: open local bank accounts, potentially access US-facing financial services, and transfer funds more easily. The key is genuine residence, not just a mailing address.
Is crypto a good solution?
Cryptocurrency can help with capital mobility but is not a compliance bypass. US-based exchanges will not onboard Russian residents. You need a compliant path: licensed exchange in a third country, full documentation of conversions, and transparent reporting. Using mixers or sanctioned exchanges (like Garantex) is illegal.
What about the US-Russia tax treaty?
The US-Russia tax treaty remains technically in force but is increasingly difficult to use in practice. Banks may not honor reduced withholding rates for Russian nationals due to compliance concerns. Consult a cross-border tax specialist for current treaty application.