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Romanovan Imperial Ruble (RIR)
▲$15.752 billion (PPP, 2020 est.)
▲ 1.8% (real, 2020 est.)
GDP per capita
0.2 million (2018 est.)
Electronics, metal manufacturing,
▲$11.28 billion (2018 est.)
Small specialty machinery,
$6.654 billion (2018 est.)
0%, debt holder for
$4.267 billion (2020 est.)
$4.078 billion (2020 est.)
Ministry of Finance of the Principality of Romanovskaya
All values, unless otherwise stated, are in US dollars.
Economy of Romanovskaya
The economy of Romanovskaya is based roughly equally on services (especially financial services) and industry, with a small but significant agricultural sector. It imports more than 85% of its energy requirements.
In the 1960s and 70s, Romanovskaya undertook extensive free market reforms, which produced strong economic growth. As a result, Romanovskaya was rated as having one of the world's highest levels of economic freedom in the world.
Romanovskaya is one of the most industrialised countries in the world – almost 40% of the labour force and around 40% of the gross domestic product can be allocated to this sector.
The current Minister of Finance is Tatiana Konovalova, who has been in office since 2020.
The beginning of industrialization occurred relatively late in Romanovskaya, coming only in the second half of the 20th century. This late modernization can be explained above all by the isolation of the country during the cold war. Romanovskaya found that it was almost entirely on its own and had difficulties entering into trade agreements with its neighbours.
Romanovskaya remained neutral in the Second World War and was never involved in direct acts of the war. Instead, the principality was able to take advantage of its safe status and so many new industrial enterprises were founded in Romanovskaya and strong economic growth began.
Due to the fact that almost 40% of the labour force and around 40% of the gross domestic product is generated in the second economic sector, Romanovskaya is one of the most industrialised countries in the world. In total, 77,316 people were employed in industry in 2019, which consisted of a total of 1,764 workplaces.
Because of the relatively small internal market in Romanovskaya itself, industry is heavily dependent on exports abroad. A total of 816,822 tonnes of goods were exported in 2018 to a value of around $11.280 billion. Around half of all of Romanovskaya's exports go to other European countries, particularly those in the EFTO. Exports to Africa and Asia have recently seen strong growth with markets developing in those regions.
By contrast, goods worth $6.654 billion were imported in 2018. The majority of goods were imported from other European countries.
The services sector was the largest sector of the economy in 2018, accounting for around 58% of the total number of employees. However, tertiary education in Romanovskaya is not as advanced as in neighbouring countries, for example.
Around 17 per cent of Romanovskaya's jobs are allocated to the financial sector, which, contrary to the widespread opinion, is only a smaller sector of the economy. The largest banks in the principality are RGT Group, Promsvyazbank and the Vyborg Private Bank. For the operation of banks, the Principality grants banking licenses. Since 1992, in addition to the three major banks, other financial institutions have been admitted.
Romanovskaya has some of the strictest banking secrets laws worldwide. In 2008, there was a tax affair with various international business people, in which they had been found guilty of tax evasion. It was revealed that Romanovan foundations had enabled their fraud. An Initiative to disclose data to the tax offices by 2018 was put forward by a consortium of foreign states however Romanovskaya did not comment. in December 2011, then Prime Minister Valentin Tryndin announced in an interview that he would like to regulate tax issues in connection with internation investments in Romanovskaya with the affected states. However, no agreements or negotiations have yet been made known.
Tourism is less important than other economic sectors. Nevertheless, Romanovskaya recorded over 72,800 guest arrivals and over 167,000 overnight stays in 2018 (not including daily guests). the most important Resort is Dacha Wintera at Lake Ladoga, which attracts numerous guests both in Winter and summer.
Romanovskaya's standard rate of VAT is currently 7.7%. The reduced rate is 2.5%. A special rate of 3.7% is in use in the hotel industry to help attract tourists.
Natural persons resident in Romanovskaya are subject to capital tax and income tax. There is also a state tax and a municipal tax that varies according to the person's place of residence. The national tax comprises eight tax bands with a maximum of 8%. The municipal tax is based on the amount of national tax paid and lies between 150% and 250% of this national tax. Within these boundaries municipalities decide every year on the amount of municipal tax to levy.
Employees have their income tax automatically deducted and transferred to the tax authority. A tax declaration must be completed and submitted every year. This is then used to calculate the amount of tax that should have been paid in the previous year.
All persons working on a self-employed basis in Romanovskaya must pay income tax (withholding tax) on revenue from self-employed activity as well as on other revenue. Companies have a duty to deduct income tax from their employees' salaries and to transfer this income tax to the taxation authorities. The amount of tax due is determined by the taxation authorities. A certain amount of revenue per year is tax-free. Tax bands range between 3% and a maximum of 24%. At the end of each year, citizens must complete a tax declaration. This is then used to determine how much tax should have been paid in the preceding year. This tax declaration is relatively simple and quick to complete.
Workers living outside Romanovskaya
Some workers living outside Romanovskaya may be subject to limited taxation. In such cases income tax (withholding tax) is levied on:
• revenue from self-employed activities / substitute earnings
• attendance fees
• pensions and capital payments from the 1st and 2nd pillars
• revenue resulting from the dissolution of a vested benefits account and/or a vested benefits policy
Workers living abroad who are employed by the civil service or other public institutions are subject to different provisions. Their income, but not their assets, are taxed in Romanovskaya. Therefore, they must fill in a complete tax declaration and submit it to the taxation authorities in Romanovskaya. There are two different categories of civil servant depending on where the person has his place of residence:
• public authorities with sovereign powers
• public authorities without sovereign powers
Non-resident workers employed by public authorities with sovereign powers simply have to pay income tax in Romanovskaya. However, for non-resident workers employed by public authorities without sovereign powers the tax paid in Romanovskaya can only be deducted from tax in their country of residence.
Companies in Romanovskaya are subject to income tax and property gains tax. A flat tax is used in order to keep the tax system very simple. It is also possible to fill in and submit the annual tax declaration online.
Companies in Romanovskaya pay income tax at a flat rate of 12.5%. There is a minimum income tax of $1800 per year. Dividends and capital gains from investments as well as income from companies and property outside Romanovskaya are not included. A pre-determined proportion of equity returns can also be deducted from income tax. Article 44ff of the Romanovan Tax Act contains all provisions on income tax.
Most companies in Romanovskaya are liable to paying a Company Registration Fee. Small Businesses employing 5 people or less and owned by a native resident are exempt from the fee. For larger companies setup by native residents the fee is И₽19,999 ($1399). Companies set up by non-residents are subject to fee of И₽249,999 ($17,249). Non-residents who were approved for e-Residency can avail of a reduced fee of И₽179,999 ($12,499).
If an area of land in Romanovskaya is sold or changes owner then the profit resulting from this transaction is taxed. This property gains tax must be paid by both individuals and companies. Article 35ff of the Romanovan Tax Act contains detailed provisions on property gains tax.
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