I. The document discusses the importance of conducting due diligence on Russian companies before entering into business agreements, as there is often a lack of transparency around ownership, finances, and potential for bribery. II. It provides tips for verifying a company's registration, tax status, participation in government contracts, and checking for debts or issues with directors. III. Statistics are presented on the growth in the number of registered companies in Russia between 2010-2016, as well as increases in overdue corporate debts, emphasizing the risks involved with Russian partners and the need for due diligence.

1. Due diligence of Russian companies &
suppliers
Russian Asian Business Union
www.ruasean.ru

2. www.ruasean.ru
Kolmykova Olga
● Russian Asian Business Union – p.t.
● Professional experience - 7 years in procurement
(multinational companies: Philip Morris, JTI, Chipita)
● Leader, organizer and co-chair of the Procurement
Committee in American Chamber of Commerce
National University of Singapore (Master of Science in Supply
Chain Management) in 2019Y
Saint-Petersburg State University Master in International
Business

3. Russian Due Diligence - “Trust but Verify“- “Doveryay no proveryay”
I. Lack of transparency (ownership, financial statements, often involve sureties, guarantees, barter
relationships and other kinds of trades, managers often keep two sets of books);
II. Lack of publicly-available information (very difficult to perform quick research on asset filings or to
determine whether a company’s stock has been properly issued);
III. Bribery (Yukos (in past the Russian oil giant) case, in which bribery is alleged at the highest levels, is an
extreme — but cautionary — tale. An investor or lender should find out if bribery is rampant and at what
level. Money laundering is prevalent as well, and should be investigated.)
The point of the due diligence is not to find problems that mean you cannot go forward. It is to find
problems and resolve them before committing a lot of time, resources and money to the project only to
find out about these problems later.
www.ruasean.ru

4. Main poins:
I. Investor or lender must verify that the Russian company has
been properly established and its shares were validly issued;
II. The company’s charter complies with Russian law. It may
contain restrictions on foreign ownership
III. Registration is extremely important. You cannot obtain shares
in a Russian “closed” or “open” joint stock company unless
those shares have been registered.
IV. Ownership of assets should be verified
V. real estate and land issues (A lease is not valid if it is not
registered)
VI. Tax issues always loom large in Russia
VII. Other Pitfalls (Environmental liabilities , Licenses, employment
system-terminated employees)
www.ruasean.ru

5. Dynamics of the number of companies in Russia 2010-2016
www.ruasean.ru
FEDERAL TAX SERVICE OF RUSSIA HTTPS://WWW.NALOG.RU/ENG/
0
1
2
3
4
5
6
2010 2011 2012 2013 2014 2015 2016
4,49 4,54 4,54 4,61 4,66
4,82
4,55
1,96
2,53
3,13
3,6
4,11
4,46
5,22
millioncompanies
the number of registered companies the number of struck off companies

6. Index of incorporated and struck off companies in Russia
www.ruasean.ru
FEDERAL STATE STATISTICS SERVICE RF HTTP://WWW.GKS.RU/
93,60% 94,70% 95,80% 94,40% 92,10%
102,70%
96,20%
46,30%
81,30%
89% 87,30% 84,70%
67,40%
149,20%
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
120,00%
140,00%
160,00%
2010 2011 2012 2013 2014 2015 2016
%
Index of incorporated companies Index of struck off companies2
Index of struck off companies = (Number of struck off companies / number of active companies )* 1000
! According to United
Nations Conference on
Trade and Development, in
2017 foreign direct investment
in Russia increased by 62% to $
19 billion, while on average it
fells by 13% worldwide.

7. Dynamics of overdue debts of legal entities in Russia
www.ruasean.ru
CENTRAL BANK OF RUSSIAN HTTPS://WWW.CBR.RU/
639486
733564
819856
861362
1128325
1676510
1749321
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
2000000
1.1.2011 1.1.2012 1.1.2013 1.1.2014 1.1.2015 1.1.2016 1.1.2017
mlnrubels
Amount of overdue debt Linear (Amount of overdue debt)

8. Statistic gives us a not very pleasant fact:
A deal with each 20 organization usually ends in losses
only because the counterparty company did not verify
it for reliability.
Let's try to figure it out and learn simple ways to verify
counterparty
www.ruasean.ru

9. To Check the INN - Individual Tax Number and Extract from Unified State
Register of Legal Entities (EGRUL)
Where: https://egrul.nalog.ru/
www.ruasean.ru
Result of search:

10. Check the registration address for "mass character"
Where: service.nalog.ru/addrfind.do
www.ruasean.ru

11. Verification of tax debt and reporting
Where: service.nalog.ru/zd.do
www.ruasean.ru

12. Contracts with government companies
Where: zakupki.gov.ru - to check the company for participation in public procurement
www.ruasean.ru
Contracts with government companies are a great way to check all the data about the
prospective partner. Companies executing such transactions are selected very strictly.
For example, the executor can not be a company has debts. If a company sometimes
concludes state contracts, it is an indicator of its reliability and a stable position in the
market.

13. Information about directors and beneficial
Where: service.nalog.ru/mru.do service.nalog.ru/disqualified.do
www.ruasean.ru

14. Thank you for attention !
www.ruasean.ru
Ocean Financial Centre,
Level 40, 10 Collyer Quay,
Singapore 049315
Сингапур: +65 8123 5527
Вьетнам: +84 9747 38037
Малайзия: +6011 283 51220
Таиланд: +65 81235527
Москва: +7 495 374 86 57
info@rsbu.org
info@ruasean.ru
www.ruasean.ru
www.rsbu.org
www.rvbu.ru
www.rtbu.ru
www.rmbu.ru