December is the best time to fund your Individual Investment Account (IIS). My clients are caught up in pleasant pre-New Year activity, and I help them allocate IIS funds into bonds, stocks, and mixed strategies—using conservative instruments and futures. Thanks to IIS-specific features, these mixed strategies support not only short-term trading but also long-term investment in domestic markets, oil, and gold.
Why You’ll Lose ₽52,000
Business is booming! It’s exciting! But the more I speak publicly about what currently fascinates me—the IIS—the more I notice that, even three years after its launch, a huge number of people—including many active exchange traders—still don’t have one. Surprisingly, among those who already hold brokerage accounts, fewer than 10% own an IIS. Apparently, the minimum ₽52,000 tax deduction available through the IIS feels trivial—like loose change on the sidewalk.
When I dug deeper, I found the issue isn’t reluctance to claim extra money—it’s persistent myths surrounding the IIS.
As you’d expect, I’ll list—and debunk—those myths below. But let me say upfront: if you’re 14 or older, you should already have an IIS. The only valid excuse for not having one is being under 14—because opening, closing, or operating an IIS before that age requires coordination with guardianship authorities, which most people understandably avoid.
Myths and Misconceptions About the Individual Investment Account
Opening an IIS takes too much time
In reality, you don’t need to leave home. Our existing clients open an IIS with a single click in their personal account. New clients can submit an application via our dedicated webpage and sign the agreement by verifying identity via SMS or the Russian State Services portal (gosuslugi.ru). No travel required!
There’s a minimum deposit requirement for IIS
Tax benefits—either the income tax (NDFl) deduction or exemption from capital gains tax on brokerage activity—become available after the IIS has been open for three years. That three-year clock starts at account opening—not first deposit. So simply opening the account—even with zero funds—reserves your right to the tax deduction.
“I don’t need an IIS—I’m not a Russian tax resident”
You may not be a resident today—but chances are high you’ll become one within three, five, or ten years.
“I don’t need an IIS—I don’t pay NDFl, so I can’t claim a deduction”
Ideally, you’d have the option to choose between the two IIS tax regimes. But even if you can’t reclaim NDFl, avoiding capital gains tax on securities trading profits—up to 13%—is still valuable.
“I don’t pay NDFl, and I don’t trade on exchanges—so neither IIS benefit applies!”
And you never plan to? Then why are you reading this? Open an IIS now—so when you finally begin trading, your account will already be mature enough to qualify for tax benefits.
You’ll gain greater flexibility in managing your capital. An IIS has no expiry date—it remains open indefinitely. After three years, it doesn’t auto-close; you can use it anytime—even five years later.
I can’t decide which tax regime to choose
I’ll personally decide near the end of year three: if reclaiming NDFl makes sense, I’ll file in time to meet the three-year deadline. But I hope to earn enough that skipping capital gains tax on IIS trading proves more beneficial.
I might need the money within three years
Then withdraw it! Until you do, you won’t owe tax on exchange trading profits. Keep earning—and compounding returns on returns. One caveat: if you previously claimed the NDFl deduction and then withdraw early, you’ll face penalties and interest for unpaid tax. See the previous point for context.
I don’t want to lock up my capital for three years
You can trade on an IIS just like a regular brokerage account. There’s no obligation to buy and hold forever. Short positions, foreign securities, USD holdings—all are permitted. Who knows—within a few years, even cryptocurrency may be allowed, provided it becomes a listed exchange asset on Russian markets.
I must deposit funds every year
No—you only need to contribute in years when you’re eligible to reclaim NDFl. By December, your annual tax liability for the current year (e.g., 2017) is usually clear—hence my opening note: December is the optimal month for IIS funding.
Funding an IIS is only possible in December
Only if you’re aiming for the NDFl deduction. If, like me, you prefer to avoid capital gains tax entirely—and aim to earn “an astronomical sum”—you’re free to fund your IIS anytime. No penalty applies.
Once I open the account, sales managers will bombard me
Yes—they’ll call to update you on regulatory changes, offer stock market training, invite you to events, send gifts, and run promotions. Honestly, it *is* annoying 🙂
No one explains clearly what to do with an IIS. There’s no reliable information!
Email afanaseva@corp.finam.ru—I’ll walk you through everything: from claiming deductions to building investment strategies. Let’s use a shared code: in your email subject line, write “IIS: New Year”!
FAQ
What is an Individual Investment Account (IIS)?
An IIS is a tax-advantaged brokerage account in Russia that offers either a 13% income tax (NDFl) deduction on contributions or full exemption from capital gains tax on investment profits—after three years.
Can I withdraw money from my IIS before three years?
Yes—but if you previously claimed the NDFl deduction, early withdrawal triggers repayment of the tax benefit plus penalties and interest.
Do I need to deposit money every year to keep my IIS active?
No. You can fund it only in years when you’re eligible for the NDFl deduction—or not at all, if you opt for the capital gains tax exemption instead.
