Is it possible in Russia today to conduct business absolutely honestly, regularly paying all taxes, at the same time have a good income and not be afraid that one day they will come for you and send you to a place where you will return (if you’re lucky) only in a few years? We talked about this with State Duma deputy Kira Lukyanova, the author of the controversial project on amnesty for those convicted of crimes in the economic sphere. The conversation turned out to be sad.
Kira Aleksandrovna, the general tone of our conversation will apparently depend on how you assess the state of the business climate in Russia, its investment attractiveness, property security and... the quality of domestic justice. On a five-point scale, if possible.
A solid two. The state of the business climate, as the president has repeatedly noted, is unsatisfactory. Investments are not coming to us, business is fleeing the country. And not at all “speculative” capital, not an abstract oligarchy, but fully established representatives of small and medium-sized businesses. They are simply afraid to continue doing business in their own country. They are afraid of state pressure and “landings”, which have become a widespread phenomenon. These are not horror stories... We have conducted interactive surveys many times: up to 70% of people with capital are ready to leave Russia by moving their business abroad. Let it be small. They pack their suitcases. They go to the Czech Republic, Bulgaria to do the same thing as here - to sell paint, furniture fittings, etc. Anything, anywhere, but not here. Please note that they are not going to the USA, but to the countries of the former socialist camp, where the ideology, unlike ours, has approached the pan-European one. They buy real estate (it’s cheaper there) and open a business. After some time, they receive a residence permit and tax benefits. They value investors and do their best to attract those who are ready to invest not only a million, but also 100, 50 thousand euros into the economy. What are we doing? And we don’t attract strangers, and we “smoke out” our own... Many of those who intend to stay are curtailing their affairs. Last year, for example, the number of those who ceased operations commercial organizations accounted for 45.3% of the total number of registered. In Russia, absolutely no one, no matter what individual business they engage in, can feel protected.
As for domestic justice, it is precisely because of its shortcomings, especially in terms of property protection, that foreigners are still afraid to invest in Russia. I wouldn’t talk about independence at all. Distinctive feature Our judicial system has a pronounced punitive, repressive bias. If the case goes to trial, there is no hope of acquittal.
By the way, about independence. The Council of Judges proposes to install special security systems in judges' apartments at state expense. When a judge is calm about his life, there are more guarantees of fair justice - this is implied.
We are talking about the physical safety of judges, but there are not many such examples. As a rule, judges are put under administrative pressure, intimidated by being deprived of their positions or disqualified. By pronouncing an acquittal on an economic crime, the judge exposes himself to the danger of falling out of the loop. It is believed that the verdict should be guilty - at least a fine, but not an acquittal. These are statistics, you can’t run away from them.
The old saying that one cannot swear off scrip and prison remains relevant in our country. A step to the left is the first, a step to the right is the second... How many entrepreneurs, according to your estimates, are currently in prison?
In total, over 806 thousand people (0.6% of the country's population) are kept in Russian colonies, prisons and pre-trial detention centers. Among them are entrepreneurs on purely economic lines, according to the Center for Legal and Economic Research, up to 100 thousand. Every sixth businessman in our country has ever been under investigation.
How actively is the tool of criminal prosecution used not to punish the truly guilty, but to redistribute property, eliminate competitors, settle scores, etc.?
The last 5-7 years have been extremely active. The only fault of Krylov’s lamb was that the wolf wanted to eat. Many of those currently serving sentences were only guilty of the fact that someone liked their business. Why prepare a raider seizure yourself, when you can carry it out with the hands of law enforcement officers, urgently “asking” them to find some kind of clue. And they will definitely find her. “They will call for help” 171, 159, 174 or 199, tax, article of the Criminal Code. If there was a person, there would be an article. The law enforcement system as an institution is confidently turning into a collective raider.
What, in your opinion, is the ratio of the number of truly guilty to those convicted in fabricated, ordered cases? How does the number of convictions and acquittals for economic crimes compare?
Acquittals are no more than 1%. From a third to a half of entrepreneurs are imprisoned, if not on a direct order, then on charges for which it was quite possible not to be imprisoned. Let’s take the same Article 159 of the Criminal Code – “Fraud”: about 30 thousand people a year are convicted under it. It is actually very convenient for law enforcement officers, since it can attract anyone who is not too lazy. In our Criminal Code, only half a page is reserved for it. And if you take German law, Austrian law, then it is described there in great detail: the first type of fraud, the sixth, the tenth... Many subsections. In our country, the article “Fraud” also includes a person who robbed a grandmother or built financial pyramid, and a person who owed someone money, but due to the crisis did not return it on time. His case could have been resolved in the civil law, but he is locked up in a prison cell.
According to Supreme Court, in the first half of 2011, 3 times fewer businessmen (10 thousand) were taken into custody than during the same period last year. Presented as a very comforting fact.
At least a little, but it really consoles. At least 10 thousand families were left happy. Before the president’s intervention, 90% of requests for pre-trial detention were granted; now it is 20% less. Very little, of course, but at least some movement forward.
Kira Aleksandrovna, you are the initiator and one of the co-authors of the bill on amnesty for those convicted of economic crimes in connection with the 20th anniversary of Russian independence. Your initiative was met with hostility and rejected by the Duma majority. What is the reason? “Economic prisoners”, when released, will pose a real threat economic security countries?
Colleagues from United Russia called our idea immoral and populist, with which I categorically disagree. The amnesty of last year, on Great Victory Day, was immoral, when our critics released less than a hundred instead of the supposed 300 thousand people. 63 people out of more than 800 thousand are hundredths of a percent.
Most recently, Dmitry Medvedev said that he is not against amnesties and called for a clear determination of which trains it should be extended to. Representatives of United Russia, who had previously been categorically against it, after the president's parting words, stated that they were ready to develop a corresponding bill themselves. How, in your opinion, can such an attempt to seize the initiative end? Amnesty for a very limited number of articles?
The topic of amnesty is now being actively discussed by the Presidential Administration, and for now it is our “broad” version, which includes articles 159 “Fraud,” 160 “Embezzlement,” and 165 “Deception or Breach of Trust,” that is taken as the basis. United Russia stated that in our version of the amnesty (very famous lawyers and experts took part in the development) there were many technical errors, so it is easier to write a new one. I think that at the beginning of the autumn session they will introduce their draft, quite possibly without including the above-mentioned articles. The 159th will either be removed completely, or only the first part will be left with minor damage. If it is accepted, then the majority of the “economic” ones will not be given freedom to New Year's holidays(Our Independence Day is December 12) and they will have to sit from bell to bell and not count on freedom. To sit in appalling conditions (our prisons can only be compared with those in Africa), with chronic diseases that, of course, no one treats there.
The fact that they started talking about “economic amnesty” at the highest level is just a manifestation of mercy or a sober calculation? After all, the prisons are overcrowded. Maybe it’s just necessary to clear some space for new prisoners?
Both. The state spends 16.5 thousand rubles a month on the maintenance of one prisoner. If we compare these figures with the average salary salary in the regions – 15–20 thousand rubles, then they look very impressive.
Vladimir Vysotsky’s hero Gleb Zheglov from “The Meeting Place...” assured that there is no punishment without guilt. According to polls, his point of view is shared by the majority of Russians - people still perceive businessmen as grabbers who are only trying to “make easy money” and defraud their neighbors. Therefore, it serves them right. Is not the business community, but society as a whole ready for economic amnesty? How to break the stereotype “an entrepreneur is a swindler”?
A very sore question. Despite the fact that the majority of “economic convicts” certainly deserve an early release and return to full-fledged activities, economic amnesty in Russia is unlikely to gain mass popularity. Society is too negative towards entrepreneurs. Most thinking people higher education are in favor of making it happen. But this stereotype, which developed under Gorbachev, when the first cooperatives were created, is very tenacious. And these swindlers must be beaten with the law, like a flail, at every opportunity. Talking about economic amnesty with society, with people who do not adhere to any ideologies, is difficult, but necessary. It is necessary to explain that businessmen are not bad, they are just different, that their life is not easier, but in many ways harder. Yes, they are not standing at the machine, but they are not slackers and thieves. They just want to work for themselves while living in Russia, while creating jobs for others, and do not want the state to take away 90% of their profits.
Should the criminal records of those sentenced to probation be expunged during the amnesty?
In our editorial office - yes. We set that zero reference point from which we can start life again.
In your opinion, what percentage of those convicted on trumped-up charges who have been released will find the strength to fight for a review of the case, demand compensation from the state for moral and material damage (ruining the Ministry of Finance with claims), seek investigations, and expose someone? After all, businessmen for the most part are active people and, for the most part, not broken.
It’s hard to say, of course, it all depends on the person’s character. But trying to punish people who sent you to jail for no reason, going through the courts requires a lot of time, expense, nerves and can become a torment. I think most will do it specific case, sighing heavily, will start all over again. Someone will leave...
Recently, the head of the Supreme Court, Vyacheslav Lebedev, proposed terminating criminal cases and releasing from criminal liability those accused who have fully repented and compensated for the damage (now in this case the punishment is only mitigated). It turns out that fighting for justice is more expensive for yourself? They're accusing me of don't understand what? It’s bad, of course, but it’s easier to repent of something you haven’t done than to prove something...
It is extremely difficult for us to achieve the truth. In the law enforcement, prosecutorial, and judicial environments, there is a mutual responsibility; the honor of the uniform is defended by all means, which is often interpreted completely wrong. Therefore, the temptation to sincerely repent of what you did not do, recognizing your innocence in your soul, will be very great.
A bill was introduced to the State Duma prohibiting the initiation of criminal cases of fraud and embezzlement against businessmen without a statement from the victims. What is his fate?
I would like to hope that it will be accepted, although it has not received very positive reviews. Such amendments, despite the fact that they deal only with the first and second parts of Articles 159 and 165 of the Criminal Code, with the amount of damage up to 250 thousand rubles, will still protect businessmen from pressure from security forces. Now criminal cases under these articles can be initiated at the request of the prosecutor's office. It is she who initiates the vast majority of such cases.
From the rather crafty statistics of the Ministry of Internal Affairs, an interesting conclusion can be drawn: the number of economic crimes is constantly decreasing, while the number of criminal cases is not decreasing. What is the reason? Is one defendant charged with several criminal cases?
Economic items belong to the identified category, and not to the “on application” category. Of the 10 cases initiated, 2-3 reach the court, the rest fall apart - either they really could not collect a decent evidence base, or they forced businessmen to pay “compensation”. In addition, the number of such cases is not decreasing, since lately The “non-economic” Article 206 of the Criminal Code “Abuse of Power” is very actively used.
There is an opinion that amnesty is a kind of state favor, but not a cure for the vices of the law enforcement, judicial, correctional, tax systems, or an admission of mistakes. And our legislation still contains norms that are simply impossible to comply with. Do you share this point of view?
Yes, it is an act of mercy, but not a cure. The disease cannot be overcome with one pill. This is not a panacea for all ills. But this is the first step, the state’s chance to show that it is changing its attitude towards the business community, forgiving both the right and the wrong. That is why one cannot help but welcome the emerging opportunity to release thousands of unjustly convicted people, but it is impossible to assume that this is where it all ends. This question will remain open even after the amnesty.
A comprehensive “treatment” consists of reconsidering the entire legislative framework in the field of entrepreneurship, since it contains norms that modern conditions it is no longer possible to comply. Many entrepreneurs are serving time under articles of the Criminal Code that are unknown to civilized law and order. It is necessary to radically change the judicial system, to free judges from dependence. And if they become truly independent, then it will not be petty officials or businessmen who will go to prison, but bigger birds.
But the most effective means can only be a global “turnover” Tax Code. All statements that we have very low tax rates are disingenuous. In other countries, some taxes may be higher, but there is so much that can be included in the cost of production! We never dreamed of it. We have a tax burden of 98 kopecks per ruble of revenue. In your opinion, is it possible under such conditions to talk about SMEs prospering and investing in innovative technologies? He needs to be encouraged to do this, saved from some taxes, and then he will be more willing to invest in his own industry, in his own production. I'm not even talking about intellectual property, about patents, which in our country actually cannot influence the capitalization of a company. Let's take one of the largest American companies- manufacturer of Coca-Cola. Its balance sheet comprises 70% of intangible assets and the brand. Take away the brand and there will be no company. We are far from this. The problem is understood only at the very top, but is not supported by the middle management, which considers its task only to pump resources abroad.
In Western countries, they understand that it makes no sense to expect abundant tax revenues from a startup company in the first few years. She must be groomed and cherished, and only then will she, like that hen, begin to lay golden eggs. We are required to show profits immediately and pay taxes on them. It comes to the point that accountants make this profit, with the sanction of management, who does not want to quarrel with tax office, they are simply “drawing” it, because in reality it does not and cannot exist - well, the enterprise has not yet gotten on its feet, they are just investing in it.
Amendments are made, laws change, but law enforcement practice remains unchanged. The bad dream refuses to go away. Everyone shouts that small business is our hope and support, that it needs to be looked after in every possible way, but in reality they treat it like a lemon that can be squeezed and thrown into the garbage chute. Is there some light at the end of this tunnel?
You see, no matter how good, ideal laws are adopted before the practice of their application, if the court needs to imprison this person, it will imprison him.
I repeat, this breakthrough could be a radical reform of the Tax Code. I will express a seditious judgment, which is actually shared by everyone: if entrepreneurs work strictly according to the Tax Code, they will not make a profit at all.
Let’s take my “favorite” paragraph 3 of Article 32 of the Tax Code: “If, within two months from the date of expiration of the deadline for fulfilling the demand for payment of tax sent to the taxpayer on the basis of a decision to prosecute for committing a tax offense, the taxpayer has not paid in full the amounts specified in this requirement the amount of arrears, the size of which allows us to assume that a violation of the legislation on taxes and fees has been committed, containing signs of a crime, the tax authorities are obliged, within 10 days from the date of discovery of these circumstances, to send materials to the investigative authorities to resolve the issue of initiating a criminal case.” In practice, we have the following situation: an inspector comes to the company and declares that for 5 years it has underpaid some amount to the budget (say, 10 million rubles), and a criminal case may soon be initiated. “We all paid honestly, you yourself recorded this,” say the businessmen. “And then we simply overlooked it,” say tax officials. And you can’t explain to the inspector that your company is engaged, for example, in brokerage activities, in which the turnover is large, but the profit is not very much, since it does not consist of turnover, but of the commissions that the broker is paid.
There are only two ways to get out of a sticky situation: quick, but illegal, and legal, but time-consuming and not always effective. The first is often suggested by the tax authorities themselves: to “agree” on 20 percent of the announced amount. The second is to complain and sue. First, file an appeal with a higher tax authority, where they will tell you: first pay, and then go to court, and if you prove that you are right, we will return every penny. If you rush to sue without paying, your assets and accounts will be seized, creating intractable problems with counterparties and customers. In a word, they will drive you into a dead end. Thus, in our country, in order to stay afloat, accountants have to show a different tax base, “convert” salaries, and forget about VAT refunds.
Free them from this need, and then things will get better. Make sure that business works for the benefit of the country, and does not think about how to stay alive, and then the situation will begin to change in better side. Everyone can't leave. So provide the rest with a normal living environment.
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CHESTNYBIZNES.RF is a portal created to build an open information space about business in the Russian Federation. We deliver for free open information from official sources for all Users. Open information is presented in the most convenient, processed form. The portal has an intelligent search, using which any User can easily find the information he needs about a company or individual entrepreneur.
On the CHESTNYBUSINESS portal, you can obtain free open data from official sources on any company or individual entrepreneur in the Russian Federation.
The data on the portal is updated daily and synchronized with the nalog.ru service of the Federal Tax Service of Russia.
To obtain open information about the company, enter INN/OGRN/OKPO/full name of the manager/Company name. To obtain open information about an individual entrepreneur, enter INN/OGRNIP/OKPO/Full Name of Individual Entrepreneur
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By receiving information about companies and entrepreneurs in the Russian Federation, Users can make the right informed decisions about cooperation with companies, reduce possible financial losses, and identify unscrupulous organizations. Openness of data increases the confidence of the Russian population in business and the state. Open data creates an environment for the emergence of quality services and allows honest development public companies, increase the informatization of society and have a positive impact on the state’s economy.
The main supplier of open data on business in Russia is the Federal Tax Service of Russia. The Federal Tax Service of the Russian Federation, the tax authority maintaining the main registers of companies and entrepreneurs (Unified State Register of Legal Entities and Unified State Register of Entrepreneurs), provides data on the basis of clause 1 of Article 6 Federal Law dated 08.08.2001 No. 129-FZ “On state registration legal entities And individual entrepreneurs": Information and documents contained in state registers are open and publicly available, with the exception of information to which access is limited, namely information about identity documents individual. Open official data about the business of the Russian Federation is extremely important when selecting and checking a counterparty, partner, conducting market analysis and many other functions that are extremely important for business development.
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In the organization card, in the basic data, information from the Federal Tax Service is used: the Unified State Register of Legal Entities (USRLE), the Unified State Register of Individual Entrepreneurs (USRIP). The main identifier for legal entities is the main state registration number (OGRN), for individual entrepreneurs - the main state registration number of an individual entrepreneur (OGRNIP). Also, one of the main details of the organization is the individual taxpayer number (TIN). For individual entrepreneurs, the TIN is used by an individual (entrepreneur).
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Checking the Counterparty for free on CHESTESTNYYBUSINESS
When making a decision to cooperate with a company or individual entrepreneur, the question of the reliability and honesty of the Counterparty constantly arises. This applies to the situation when an Individual orders a product or service, and to the situation when a Legal Entity begins cooperation with a new Supplier / Partner / Client.
When making a payment (prepayment) for goods or services, you must clearly understand that the Supplier will fulfill all its obligations, deliver the goods or provide the service accurately and on time.
It is important to check the Counterparty and choose reliable companies to resolve possible risks supplies poor quality goods, lack of warranty service.
For Legal entities, verification of the Counterparty is the main action to prevent financial and tax risks. The Federal Tax Service strongly recommends checking Counterparties and exercising Due Diligence using all available open and legal sources of information. The easiest way to Check a Counterparty is to obtain an extract from the Unified State Register of Legal Entities/Unified State Register of Individual Entrepreneurs on the tax website. To obtain more complete information, it is recommended to use the CHESTBUSINESS counterparty verification service.
On the CHESTNYBUSINESS portal, you can check for free the Counterparty of a legal entity or individual entrepreneur using information from official open sources(Federal Tax Service, Rosstat, etc.)
The data on the portal is updated daily and synchronized with the nalog.ru service of the Federal Tax Service of the Russian Federation*.
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Enter the company name + director's last name (for example: TEKHPROM IVANOV)
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There is no connection with a legal entity by legal entity. address (according to the Federal Tax Service).
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* Data from the Unified State Register of Legal Entities / Unified State Register of Individual Entrepreneurs are open and are provided on the basis of clause 1 of Article 6 of the Federal Law of 08.08.2001 No. 129-FZ “On State Registration of Legal Entities and Individual Entrepreneurs”: Information and documents contained in state registers are open and publicly available, with the exception of information to which access is limited, namely information about identification documents of an individual. On the website ZACHESTNYYBIZNES.RF you can check the Counterparty for free and exercise Due Diligence. All instructions and requirements presented on the website ZACHESTNYYBIZNES.RF are not mandatory and are advisory in nature. Recommendations are given for possible reduction of economic risks. When concluding transactions, taxpayers must first of all take into account the provisions of the Constitution Russian Federation and the Civil Code of the Russian Federation. Due to the principle of freedom economic activity the taxpayer carries out entrepreneurial activity yourself at your own risk. The administration of the website ZACHESTNYYBIZNES.RF is not responsible for possible economic losses/cases of lost income and does not give any guarantees or assurances to third parties.
Checking the counterparty by TIN or OGRN
There is often a need to check the reliability of a counterparty in order to eliminate future claims from the tax authorities. Sometimes, in a similar way, it makes sense to check your competitors to see whether they are doing business honestly or using shell companies that give them illegal competitive advantages regarding taxes. And it happens that it doesn’t hurt to run your Taxpayer Identification Number through the database - sometimes you can find unexpected information there that does not have the best effect on the image of a company or individual entrepreneur.
How to check a counterparty by TIN
To check a company or individual entrepreneur using various databases, it is enough to know the TIN or OGRN (OGRIP). If you have time to independently check a counterparty using various databases, we recommend the article “How to check a counterparty company: all free sources of information”, which contains all free official sources information.
Every year, doing business with China becomes more and more interesting. Democratic prices, high quality And wide range local goods are far from the only advantages of this country. For example, compared to Taiwan, Japan or South Korea, China is implementing the latest technologies much faster technical developments and more successfully introduces innovations into production. China is significantly ahead of its Asian competitors - this is where entrepreneurs go to buy new products for sale that still have no analogues in the world.
However, the main factor for merchants when choosing business partners is still the low cost of products, and often the desire to save on things that are not worth saving on results in serious financial losses for them - the price to pay for cooperation with an unscrupulous Chinese contractor. The miser, as they say, pays twice. But this does not mean that all Chinese suppliers are scammers and working with them is dangerous.
The likelihood of encountering unscrupulous contractors in China depends on the demand for a particular product group. For example, this year one of the most discussed topics was cryptocurrency. Out of ten transactions for the purchase of mining equipment, six end in financial losses for entrepreneurs. And even experienced intermediaries can find it difficult to determine the level of reliability of a contractor, since all manufacturing companies of the relevant goods have been on the market for no more than two years.
At the same time, there are categories of goods that have very small margins (such as, say, ceramic tiles or tombstones), so you can’t make much money from fraudulent transactions with them, and, therefore, the likelihood of meeting an unscrupulous contractor here is low. In any case, before concluding a deal with a partner from the Middle Kingdom, you need to thoroughly prepare and learn in advance about the tricks of local scammers.
Fictitious transaction: double company and shell company
The art of deceiving newcomers by Chinese scammers knows no bounds. The easiest way for scammers to mislead an entrepreneur is by telephone or via the Internet. As a rule, a fraudulent scheme begins with a call or letter from the sales manager of one of the enterprises in China. A kind salesperson offers goods at a very attractive price and with the possibility of prompt delivery if payment for it is made in as soon as possible usually on the same day. Realizing that there is not enough time to fly to production for inspection, the entrepreneur limits himself to viewing the company’s website. There he sees the corresponding product, all the characteristics, the supplier’s coordinates and, convinced of the security of the transaction, places an order and makes an advance payment. When, having not received the shipment on time, the entrepreneur contacts the supplier, it turns out that they heard about the existence of the order for the first time and did not receive any money. What happened? The Chinese swindler pretended to be an employee of the company and communicated with the customer either from a specially created email address, the address of which is exactly like the one indicated on the company’s website and differs by an extra dot or hyphen, or from the hacked mailbox of a real manager.
It takes a lot of effort from scammers to prepare a “performance” for a businessman who decides to pay a personal visit to a potential contractor. In this case, speeches alone will not do, therefore, in order to give the impression of a real enterprise, swindlers use decorations and extras. During the tour, the plant looks very natural: the machines operate at full power, Chinese workers in full uniform are constantly scurrying around the workshops, and the main characters - first-class scammers - proudly lead their gullible guests through all the corridors of the building, at the same time promising incredible prices and fabulous profits.
Of course, after such a royal reception, the businessman hurries to his native land in order to quickly complete the paperwork and transfer the required amount to newly minted contractors from the Middle Kingdom. That's where cooperation usually ends. After several weeks of waiting and fruitless attempts to contact the company, the deception is revealed: renting a factory and hiring a crowd of onlookers for a small performance in China turns out to be not so difficult.
So, in order to avoid falling into the hands of fraudsters, before concluding a deal and transferring funds to China, it is necessary to conduct a full audit of the potential partner. You can start this process literally without leaving your home, by analyzing information about the company on the Internet.
The first thing you should pay attention to is the domain on which the supplier's website is registered. If the address bar says “.cn” or “.cn.com”, then it is a local address, and the owner presented a passport to register it. Scammers try to avoid advertising their identity in order to attract less attention to themselves, so they hang fake sites mainly on American domains: if you see one of these, this is a reason to be wary.
The next step is to check the domain registration date: this can be done, for example, using the “Whois” service. It is better not to contact newcomers, but to contact the company that owns domain name long term, you can take a closer look and study the contents of the site.
The information indicated or, conversely, omitted on the official website on the Internet can tell a lot about the company. There are two main points that you definitely need to pay attention to: the presence of a Chinese version of the site along with the English version and the indication of a landline phone number in the feedback section.
Having made sure that the contractor took a responsible approach to filling out the site, it is worth checking whether he was lying about his territorial location. To do this, you need to copy the production address from the contact page and paste it into the search bar of Google maps. If the building belongs to the non-residential stock, then you can safely move on to the next step of the inspection - studying the reviews.
To do this, first enter the company name and “reviews” in the address bar, and then change last word to "scam". The first combination will show what current and former customers think about the contractor, and the second will search for the company using a list of scammers.
After completing all the procedures from the checklist, it’s time for negotiations. But before starting to discuss the terms of the deal, it is important to request from the potential contractor copies of the registration document and an export license if the company works not only for the domestic market. All further discussions, of course, should take place in the format of a personal meeting directly at the enterprise. In order for a businessman to insure himself, before packing his bags and booking a ticket to China, you can request an official invitation from your partners to obtain a visa. It will not be difficult for honest companies to do this, but scammers will look for all sorts of excuses so as not to attract attention from the embassy.
"Golden" product
The Chinese are obsessed with the idea of making money here and now, without caring about the prospects for long-term cooperation. To get more money from the current partner, the supplier needs to increase trade turnover with him, and this means providing discounts for volume. In these conditions, it is much easier and more profitable for Chinese businessmen to find several new clients who are easily bought into the terms of cooperation that are attractive at first glance. Thus, in order not to lose money, it is important for an entrepreneur to have a good understanding of the market and know the price range for the product of interest.
But this awareness will protect you from inflated prices only at the beginning of work. Unfortunately, some particularly greedy contractors find ways to “increase” the cost already in the process of cooperation. We are talking here, first of all, about “hidden” payments. For example, one entrepreneur I know had to pay a significant amount during customs clearance of cargo because this service was not included in the contract with the supplier. As a rule, avoiding conversations about unforeseen costs, Chinese merchants try to issue an additional invoice at a time when it is no longer possible to change the supplier or return the prepayment. The only way to protect the company from unnecessary expenses is to conclude an agreement.
Poorly drafted contract
However, not everything here is as simple as it might seem at first glance. First of all, it is worth noting that there can be no talk of any oral agreements - everything must be formalized in writing. At the same time, the process of drawing up a contract must be approached very responsibly. First, you need to seek services professional translator. Only fluency in Chinese will allow the parties to correctly understand each other and record the agreements reached in official papers without errors. Also, all documents must be thoroughly studied by lawyers. Any mistake or omission when drawing up a contract can result in serious problems and financial losses for the entrepreneur.
It is very important to describe as accurately as possible both the process of producing goods and the final appearance of the products. If you don’t cover the details, the Chinese will not miss the opportunity to replace materials with more budget-friendly ones and often of lower quality, putting the money saved due to this into their own pocket.
It is also necessary to specify the terms and conditions of delivery so that the Chinese side is not tempted to delay production while fulfilling other orders in parallel.
In addition, in case something does go against the terms of the contract, it is necessary to indicate the corresponding fines and penalties.
In the payment section of the contract, the supplier’s details must be recorded, since real companies accept funds by transfer to the bank account of a legal entity. Requests for payment in another form, such as Western Union, indicate dishonest intentions on the part of the supplier.
In fact, working with China, if it is clearly established, will bring not only profit, but also pleasure. The Chinese are very friendly and hardworking people. But, as in any other country, not everyone lives honestly here. If an entrepreneur does not pay due attention to debugging business processes at all stages of cooperation with the Chinese side, he will most likely suffer losses.
When making a decision to cooperate with a company or individual entrepreneur, the question of the reliability and honesty of the Counterparty constantly arises. This applies to the situation when an Individual orders a product or service, and to the situation when a Legal Entity begins cooperation with a new Supplier / Partner / Client.
When making a payment (prepayment) for goods or services, you must clearly understand that the Supplier will fulfill all its obligations, deliver the goods or provide the service accurately and on time.
It is important to check the Counterparty and choose reliable companies to eliminate possible risks of delivery of low-quality goods and lack of warranty service.
For Legal entities, verification of the Counterparty is the main action to prevent financial and tax risks. The Federal Tax Service strongly recommends checking Counterparties and exercising Due Diligence using all available open and legal sources of information. The easiest way to Check a Counterparty is to obtain an extract from the Unified State Register of Legal Entities/Unified State Register of Individual Entrepreneurs on the tax website. To obtain more complete information, it is recommended to use the CHESTBUSINESS counterparty verification service.
On the CHESTNYBUSINESS portal, you can check for free the Contractor of a legal entity or individual entrepreneur using information from official open sources (Federal Tax Service, Rosstat, etc.)
The data on the portal is updated daily and synchronized with the nalog.ru service of the Federal Tax Service of the Russian Federation*.
To check the Counterparty for free by TIN / OGRN / Full Name / Name, use the search bar:
To do this, enter the company’s INN or OGRN in the search bar.
If you do not have exact details, it will be enough to enter the company name. If the name is common and your request produces a list, it is advisable to clarify your request:
. enter the company name + director's surname (for example: TEKHPROM IVANOV)
. or: company name + location (for example: TEKHPROM MOSCOW)
. or all parameters at once (for example: TEKHPROM IVANOV MOSCOW)
A brief algorithm for checking a Counterparty (how to identify a reliable Counterparty using CHESTESTNYBUSINESS.RF):
- The organization must exist, its status must be Active.
- The company should not be in the special registers of the Tax Service (FTS), otherwise a red inscription will appear on the card under the name of the company. For example:
There is no connection with a legal entity by legal entity. address (according to the Federal Tax Service). - Companies that have been operating for less than a year have increased risks (determined by the date of registration). According to statistics, every 3rd company ceases operations within the first year.
- The company must be located at the registered address. The company must not have a mass registration address. How many companies are still registered at this address is indicated in the card below the address. Bulk addresses are often used by unscrupulous or shell companies.
- The company's activities must coincide in meaning with the actual activities of the company.
- Head (director) of the company. If you know who the head of the company is, check this data. There are cases when companies are registered in the name of nominal managers, i.e. persons not participating in the activity. This is one of the main signs of unscrupulous companies.
- Check the number of employees. A company without own employees and the material and technical base may not fulfill its obligations.
- Check for registration with extra-budgetary funds. Without registration, for example with the Pension Fund, a company cannot contribute funds to the Pension Fund.
- Authorized capital of the company. The minimum in the Russian Federation is 10,000 rubles. The larger the authorized capital, the lower the risks when working with the Counterparty.
- It is also worth paying attention to Financial indicators (does not apply to companies that have existed for less than a year). Please pay attention to the articles: “Net profit (loss)” - an unprofitable company may have financial problems. The article “Fixed Assets” shows the presence of Property in the company's ownership.
- Particular attention should be paid to the data of the Arbitration Court (a separate tab in the card of a Legal Entity or Individual Entrepreneur on the CHEST BUSINESS portal). The presence of court cases for non-fulfillment of obligations and claims for the recovery of funds against the inspected Organization indicates the unreliability of the Counterparty.
- Check the FSSP data. The presence of enforcement proceedings indicates the forced collection of funds from the audited company.
We wish you to work with reliable, honest Contractors!
Convenient, comfortable work when checking Counterparties on the portal!
Your HONEST BUSINESS.RF.
* Data from the Unified State Register of Legal Entities / Unified State Register of Individual Entrepreneurs are open and are provided on the basis of clause 1 of Article 6 of the Federal Law of 08.08.2001 No. 129-FZ “On State Registration of Legal Entities and Individual Entrepreneurs”: Information and documents contained in state registers are open and publicly available, with the exception of information to which access is limited, namely information about identification documents of an individual. On the website ZACHESTNYYBIZNES.RF you can check the Counterparty for free and exercise Due Diligence. All instructions and requirements presented on the website ZACHESTNYYBIZNES.RF are not mandatory and are advisory in nature. Recommendations are given for possible reduction of economic risks. When concluding transactions, taxpayers, first of all, need to take into account the provisions of the Constitution of the Russian Federation and the Civil Code of the Russian Federation. Due to the principle of freedom of economic activity, the taxpayer carries out business activities independently at his own risk. The administration of the website ZACHESTNYYBIZNES.RF is not responsible for possible economic losses/cases of lost income and does not give any guarantees or assurances to third parties.
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