Fraud Prevention: Attributes of Fraudulent or Shell Companies are Successfully Identified in Russia


According to the Federal Tax Service of Russia (FTS – authority responsible for registrations and taxation) as of March 1, 2019, 4 million active companies are registered in Russia, on 4,7% or 187 thousand companies attributes of fraudulent or shell ones have been found by this competent body.

The FTS, taking strong measures against shell (in practice – inactive) and fraudulent companies since 2016, has worked up the list of following attributes that may speak for dubious features in company’s activities, in particular such as:

  • registration and trading address are different
  • frequent change of registration address
  • no lease agreements with working premises owners
  • company age – young
  • company or sole entrepreneur is represented by trustees registered in another region
  • change of company’s management just before the filing of annual accounts
  • inaccurate information on address, director, shareholder filed in the EGRUL-Register
  • directors or shareholders are non-residents of Russia
  • multiple filing of zero annual accounts
  • equality of income and expenditure with minimum profit
  • lack of employment data / single employee registered
  • lack of open bank account / closure of all bank accounts / over 10 bank accounts are open
  • cash flow without account balance
  • registration of company and opening of bank accounts in different regions

How to find out that a Russian third party you have to do business with may be a fraudulent or shell one?

The aforementioned attributes together with other significant signs are taken into account by evaluating Russian companies within the credit management solution developed by Credinform Russia – The Information and Analytical system Globas They offer a special scoring that estimates if a Russian company of interest might be a dubious one. This scoring among solvency, likelihood of bankruptcy checks is available online and also in comprehensive fresh investigations on Russian companies performed by a local Russian company data provider.

You may also want to read “Russia Takes Action against Fraudulent and Inactive Companies”