The Russian owners of a $1-billion mining company have chosen to move their corporate headquarters to Whitehorse, making it the latest foreign company to be Yukon-based in name only.
High River Gold Mines Ltd., a gold company with mines in Russia and Burkina Faso, is majority-owned by OAO Severstal of Russia and has its senior management in Moscow.
However, it has technically been based in Toronto. But the company recently announced that it plans to re-incorporate in Yukon.
The company’s shareholders are expected to approve the move at a meeting slated for Jan. 24 in Toronto.
Officials said Yukon’s business laws will give High River the freedom to appoint non-Canadian board directors.
The federal Canada Business Corporations Act requires at least 25 per cent of a company’s directors to be Canadian residents, but the Yukon Business Corporations Act has no residency requirements.
“By continuing under the Yukon Business Corporations Act, High River’s shareholders will have the flexibility which they do not presently enjoy to nominate and elect the directors based upon criteria other than residency,” the company said in a Nov. 15 news release.
High River’s corporate move is a technical one — meaning the company’s Yukon presence will be in name only — but not an uncommon one, say Yukon government officials.
“We process large numbers of transactions on a daily basis, so this is just one additional number in application,” Fred Pretorius, the government’s corporate affairs director, told CBC News on Thursday.
Still, Pretorius said High River and other foreign companies will not be exempt from any Canadian laws or security regulations.
“Regardless of which jurisdiction they would choose, they’re still going to have to comply with Canadian laws,” he said.
“It’s just not that simple that people usually choose one to get away from rules and regulations, especially when the rules and regulations are actually highly harmonized across the country.”
Expands Yukon brand: lawyer
Yukon government records show about 2,100 corporate registrations are for “extra-territorial” companies.
As well, many law firms in the territory serve as corporate headquarters for hundreds of foreign operations.
“It expands the Yukon brand,” said Whitehorse lawyer Greg Fekete, whose law office represents a number of foreign companies.
“For tourism we’ve got a great brand already, and the more we get the Yukon name out there, by whatever means, it puts our name in front of the media, potentially around the world. And it’s free.”