Owens OnLine Credit Grantor's Fact Sheet: RUSSIA

Background: Russia has 11 time zones, 100 nationalities, roughly 150 million inhabitants and some of the world’s richest wood, oil and gas resources. Russia’s retail sector is growing rapidly. Difficulties in doing business include ownership disputes; high tax rates and frequent changes to the tax code; high operation costs; corruption and commercial crime; payments arrears, frozen accounts and the financial illiquidity of many Russian firms; changing regulatory requirements; a lack of market information; an embryonic legal framework; cultural and language differences; infrastructure problems and frequent changes in government personnel. Taxes are often not collected, even from foreign firms, causing infrastructure problems.

Business Structures: There are 2.8 million registered enterprises (over 575,000 in Moscow). Legal forms are limited liability (OOO since 1995 totaling 562,000 companies, TOO before 1995 totaling 599,000), public joint-stock (OAO) totaling 58,000, private joint-stock (ZAO) totaling 341,000, limited with additional liability, general partnership, limited partnership, subsidiary, production cooperative, state/municipality unitary enterprise, and sole proprietorship. Private joint-stock companies are not publicly-traded and shareholders cannot sell shares without permission of all other shareholders.

Locating Businesses: Free Internet databases include OPM’s List of Public Companies, Russia on the Net company and Web directory, and Moscow Business Telephone Guide (see 200+ Free Directories on Owens OnLine). Kompass offers a CD-Rom with 30,000 Russian manufacturers and distributors.

Banking Information: Russia’s central bank is Centrobank of the Russian Federation. The largest commercial banks are Incombank, Onexim-Bank, Vneshtorgbank, SBS-Argro, Natsionalnyj Rezervnyj Bank, Rossijskij Kredit, Menatep, Mosbiznesbank, Mezhdunarodny Moskovskij Bank and Avtobank. Commercial banks are not allowed to disclose information without their client’s written authorization.

Public Records and Financial Information: Public records are kept at the State Register and State Statistics Committee (SSC) offices situated nationwide. Registration includes place and date of establishment, legal form, and activities share capital and directors (individual shareholders are not disclosed). Companies of all types except proprietorships, production cooperatives and general partnerships are supposed to submit their financials to the SSC, but since enforcement is lax, compliance is low. Banks must also file to avoid losing their licenses. Financial filings are available to the public for a fee. Lien and judgment filings are not officially available. The two stock exchanges are the Moskovskaya Mezhbankovskaya Valutnaja Birzha (Moscow Interbank Value Exchange) and Moskovskaya Centralnaya Fondovaya Birzha (the Moscow Central Stock Exchange). Only large public joint-stock companies (OAOs) are quoted. Due to lack of demand, smaller OAOs sell shares directly to investors instead of through the exchanges.

Personal Information: Data is not generally available outside of address, surname, parent’s name and birthdate. Only state institutions (e.g., the taxman or police) may legally inquire on individuals. Criminal records are available but expensive.

Trade Payment Histories: Lacking a commercial repository, trade payment history databases do not exist. Agencies rely on references supplied by the subject companies, who often respond slowly and only list their best-paid vendors.