Top-Rated Debt Collection Agency in Russia
Fast and reliable debt collection in Russia - no upfront costs, only pay for success. Request a FREE Consultation or upload your claim today.
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In Russia, recovering your debt is easiest when using this method.
Debitura is a debt recovery specialist in Russia, offering a full suite of services provided by our experienced professionals. Our offerings include accounts receivables management, debt collection notices, pre-legal and legal debt collection, as well as enforcement court proceedings. We leverage our extensive knowledge on Russia's debt collection laws and regulations to deliver efficient and effective solutions to help businesses recover their outstanding debts.
We provide unwavering support throughout the entire process.
A tailored collection approach.
We have a team of over 500 experts who specialize in international debt collection.
At the lowest cost, we have achieved a success rate of 87%.
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The ultimate guide about debt collection in Russia
If you have money that you are owed from a business or customer in Russia, you have come to the right place! We have helped hundreds of other businesses get their money back from people who owe them.
It can be hard to get people to pay you back if you loan them money in Russia. Language and cultural barriers, foreign laws and customs, and the distance between people can make it hard to get your money back.
When you want someone to pay you back for money they owe you, it is easier to use a collection agency that knows the laws and customs of the country where the person who owes you money lives.
At Debitura, we always put our customers first. We do everything we can to get your money back while still keeping a good relationship with the person who owes you money. Our strategic public relations efforts are always fair but firm- ensuring your reputation is our top priority! If you want to learn more about how to collect debt yourself, keep reading this guide. If you would rather work with a local law firm that specializes in debt recovery in Russia, we can help you with that too.
At Debitura, we have a simple way for you to collect your debt from people in Russia and 192 other countries. To get started, upload your claim today. We will look at it and provide you with 3 free quotes from local debt collection lawyers in Russia within 24 hours. We use a people-oriented approach and the latest tech-driven solutions to get results and provide better contact management. This comprehensive method gets the results you need while preserving customer relationships. In addition, our network of debt collectors, attorneys, suppliers and vendors are cherished relationships that allows us to get the job done. We value each of these relationships, no matter how small or large.
Upload claim
Begin the process of debt collection in Russia today at no cost. Simply make a free profile and upload your case within 2 minutes.
Pre-legal
We will attempt to collect your claim through our effective pre-legal recovery process for the first 3 months. You don't pay us unless we succeed in collecting your debt.
Legal
If your claim remains unpaid after the pre-legal phase, we offer you three quotes from our nearby debt collection attorneys to further assist with the collection process.
24/7 updates
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in Russia
Are you finding it difficult to collect payments from your Russian customers? Do not worry; we can help you get paid by your Russian customers easily.
The person who owes money is called the debtor. The person who gave them the money or invoice is called the creditor. If the creditor collects the debt, this is called first-party collection. If someone else collects the debt for the creditor, this is called third-party collections.
- The payment behavior of domestic firms is poor. This means that they often do not pay on time. Payment terms are not fully regulated, which means that businesses can charge interest on late payments.
- Courts can be efficient when a debt is certain and undisputed, but legal proceedings may be complex if the debt is disputed. Alternative Dispute Resolution methods (which is not relied upon) or through foreign courts (since Russian courts apply extremely strict jurisdictional exclusivity rules).
- Insolvency proceedings are something to avoid if possible. A debt-renegotiation mechanism exists, but it is not often used. Liquidation is the fallback plan, but unsecured creditors would have a very small chance of recovering their debt (on average, only 1.5% of what they are originally owed).
Days Sales Outstanding (DSO)
In Russia, people often do not pay their debts on time. The law says that people should have 10-45 days to pay for food, but this does not always happen. For other things that people buy, usually people have 30-60 days to pay, but in some cases they have up to 90 days. It is common for payments to be late, even though it is hard to say how often this happens. For companies that are listed (meaning their stocks can be bought and sold), the average number of days it takes them to get paid has been going down over the past few years.
Common payment types in Russia
Bank transfers are becoming a more popular way to pay for things internationally because they are fast and secure. This is because there is a good network of banks both domestically and internationally that support this type of payment.
It is important to negotiate down payments because company directors may disappear without notice. This is a major issue because we need to be able to prove that contracts are effective in order to make international transfers. If we can't identify the corporate structure, this may become difficult.
Main corporate structures
Liability for business debts is determined by legal structures, which are described as follows:
- A sole proprietorship is a business owned by one person. The owner is responsible for all debts of the business. In 2012, two to 50 people may decide to share ownership and responsibilities through limited partnerships.
- Limited Liability Companies are the most popular type of business in Russia because they are not as risky and do not require a lot of money to start (about EUR 114). This means that the people running the company are only responsible for the amount of money they put into it. Non-Public Joint-Stock Companies are used for larger structures. This means that the company is willing to divide their capital into at least 50 holders. Public Joint-Stock Companies aim to trade shares publicly. The minimum requirements for Capital is set at EUR 1,100. In these entities, the shareholders’ liability is limited to the value of their shares.
- Foreign companies can also choose to settle in Russia through Branch Offices. This means that the foreign parent company is not responsible if something goes wrong. Representative Offices can also be set up, but these cannot make any money. Joint Ventures may take the form of any legal structure listed above, but incorporation is not necessary. This just means that a contract drafted for this purpose would be enough.
The debt collection process in Russia
The debt collection process in Russia typically happens in several steps. The picture below explains our standard process for collecting debt in the Russia:
1 Upload your claim:
If you want help with your debt, you will need to find a partner who can help you. You can upload your claim to their website. If you use Debitura, we will provide you with 3 free quotes from local partners in the European country where your case is located.
2 Amicable collection:
The collection process usually starts with sending reminders to the person who owes you money. This is called a campaign. The reminders go through email, SMS, letters, and other ways of communication in the specific country. The goal is to get the debtor to pay or agree that they owe the debt and start a plan to pay it back. Debitura has a no-cure-no-pay solution for amicable collection, which means you only have to pay a small success fee if we recover your debt. Amicable collections with Debitura are 100% risk-free!
3 Evaluation:
If you have not received payment from the debtor after the amicable phase, it is time to evaluate the next steps. We will look at the size of your claim, the payment probability and other factors to guide you in making a decision on what to do next. There are three typical next steps:
A Surveillance:
If you claim is worth less than 2.000-5000€, it is not worth it to take any more legal action. In this case, we recommend "debt surveillance." This means that we will keep trying to reach your debtor and try to negotiate a friendly agreement.
B: Legal collections:
We suggest that you begin a legal procedure if you have a big issue that needs to be resolved. The specific steps you need to take will vary depending on the nature and magnitude of your problem. Typically, it takes about 1 to 1 and a half years for the whole process to be completed.
C: Debt enforcement:
If the person you are claiming money from has said that they owe you money or if there is a court order, you can go to the bailiff's court to get your money.
At Debitura, we can help you with all three steps in Russia.
Amicable collection in Russia
With Debitura, you can get your money back without any risk, and it will only take a short time. Just submit your claim and we will start working on it within 24 hours.
We will reach out to your debtor in Russia using different methods, like email, text messages, letters, phone calls, and social media.
The goal of this process is to:
A) make the person who owes money pay the whole amount, or
B) get the debtor to agree that they owe the money and start a plan to pay it back
If the person you are trying to collect money from has disputed your claim, you cannot try to resolve it peacefully. You must start with legal collections.
Late Payment Interest
The law provides some framework on late payment interest. This means that if someone does not pay you on time, you can charge them extra. The extra money is equal to the key rate approved by the Central Bank of Russia to the corresponding period. This rate applies even if it not stipulated in the contract. However, if a rate is stipulated in the contract and it is higher, the contract rate applies.
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Get started with
amicable debt collection
Upload your claim and get started with our 100% no-cure-no-pay collection solution.
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Legal collection in Russia
If you have not been paid during the amicable phase or the debtor disputes your claim, we will provide you with 3 free quotes from our local debt collection attorneys. In the legal phase, our local attorney will reach out to your debtor and try to negotiate a payment. Our partners can also go to court and get a payment order via the legal system in Russia. This payment order can then be used to enforce your claim via enforcement court.
Ordinary proceedings
If someone owes you money, you can write a letter asking them to pay you back. This is called a Demand Letter. In the letter, remind them that they owe you money and that they need to pay it back with interest.
If the debt is less than RUB 800,000=EUR 9,176 and the debtor is a company, or RUB 400,000=EUR 4,588 if the debtor is an individual entrepreneur, then simplified court proceedings are available. This means that if everything is certain and undisputed, the court process will be quicker. Once all the necessary documents are provided to the court and the debtor is informed, as well as paying the court tax duty, then these proceedings can be settled efficiently.
If someone disagrees with the debt, we have to start a different kind of case, which is harder. The claim must be sent to the court, and then the court will invite the person who owes money to a meeting. This is something that only happens in Russia. If the person who owes money does not come to the meeting, they still might lose. But normally, if somebody wins this kind of case, they would get their money back or be told to stop doing something. They can't get more money just because they won the case, though.
The Russian legal system is based on Civil Law principles, which means that regulations are written down in a code rather than being created by the courts through decisions in individual cases.
The judicial system is complex. It has different courts for different types of cases. For example, there are courts for personal disputes, commercial disputes, and appeals. There is also a Supreme Court and a Constitutional Court. There are different types of courts, and the law is different for each type. The Civil Procedure Code applies to the courts of general jurisdiction, and the Arbitrazh Procedure Code applies to the Arbitrazh Courts.
In 2012, a special court was made to handle cases about intellectual property rights. This court is responsible for cases related to intellectual property rights. On August 6, 2014, the Supreme Court became the highest court that deals with Arbitrazh Courts.
The amount of money you will need to pay a lawyer depends on how complicated your case is and how big your claim is. To get the best price, it is a good idea to ask multiple lawyers for their prices so that you can compare them. You can do this easily by using Debitura.
Get started with
legal debt collection
Upload your claim and get 3 FREE quotes from our local collection partners.
Debt enforcement in Russia
If you have gotten a written note from the person you are asking for money from, or a court order, you can go to the bailiff's court in Russia to get your money from them.
A judgment is enforceable for three years after it becomes final.
If the person you sue does not pay the money they owe you, you may have to ask the court's bailiff services to make them pay. You also have the right to collect money directly from their bank account.
The way to do this and how much it will cost is different for everyone. You can upload your information onto Debitura. They will give you 3 different options within 24 hours.
Get started with
debt enforcement
Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in Russia
The final stage you can initiate if your debtor cannot pay his debts is an insolvency procedure. The goal of this procedure is to sell the debtor's assets and give the money to the creditors following the debt priorities.
- In Russia, there are no out-of-court debt renegotiation proceedings.
- Debt restructuring would take place in various stages, with supervision proceedings being set up first following the publication of a bankruptcy declaration by the court.
- If the temporary administrator concludes that the company is viable and may be rescued, a financial rehabilitation stage may then commence.
- If necessary, a third external management phase may finally be put in place to further assist the debtor to return to solvency.
- Liquidation is the default insolvency procedure and liquidators are normally entitled to request the court to cancel certain transactions concluded prior to the insolvency proceedings.
The analysis is concluding that the risk of doing business in Russia is high. Based on this high score, we recommend always charging upfront payment or using credit insurance when trading with customers in Russia, as it may be very difficult to get paid. The high risk score is based on the following factors:
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The economic risk in Russia
Economic risk in Russia is very high (6 out of 6). An economic risk of 6 out of 6 is high in Europe.
GDP and economic growth are critical drivers for economic risk.
The GDP of Russia is 1775,8 bn. USD (2021), growing by 4,82% per year.
In terms of the size of its economy, Russia ranks #12 out of 183 countries and has a large economy.
Having a view at the growth rate, it is ranked #82 out of 183 countries and is therefore considered an excellent growing economy.
GDP per capita is 12173 USD, ranking Russia number #58 out of 183 countries. This means the purchasing power of citizens in Russia is high compared to the rest of the world.
You can see a more throughout picture of GDP and economic growth in Russia in the table below:
Another critical driver for the economic risk score is the inflation rate and the interest rates. You can see a more throughout picture of monetary KPIs in Russia in the table below:
The inflation in Russia was 6,7% in 2021 which is considered a high inflation rate.
Looking at the interest rate for businesses, it is 6,73%.
The business environment risk in Russia
Our analysis shows that the business environment risk in Russia is high (5 out of 6), which is a high risk score in Europe.
Economic freedom and rights has a big influence on the business environment risk in a country. You can see the critical facts for Russia in the table below:
As you can see in the table, the property rights index is 54 in Russia, which is considered low in Europe.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 84 in Russia, a pretty good score for a country in Europe.
Russia's overall economic freedom index is 62 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in Russia
The political risk in Russia is very high, with a score of 6/6. This is a high political risk score in Europe.
The governance and political stability indicators are critical drivers for political risk. An overview of Russia can be seen in the graphs below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When doing business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In Russia, the rule of law index is at -0,87 points, with the score going from -2.5 (weak) to 2.5 (strong). Russia has, therefore, a very low rule of law index, which means it is often close to impossible to enforce your contracts. We, therefore, recommend avoiding credits and recommend charging upfront payment instead.
Other drivers for the very high political risks are the very weak control of corruption, the very weak political stability index, and the large shadow economy that is 33,72% of Russia's GDP.
The commercial risk in Russia
In Russia, the commercial risk score is 4/4, which in our model is a high score. This high commercial risk score is high compared to the average in Europe.
The commercial risk is influenced by a country's international trade relationships. You can see some of the key facts for Russia in the table below:
Russia has a total of foreign exchange reserves of 632.24 bn. USD.
Russia has a positive trade balance of 9,56% of GDP. This means that Russia imports fewer goods and services than the country exports.
The annual growth of exports of goods and services has been growing 3,21% annually - now 30,84% of GDP. Import of goods and services represents 21,29% of the GDP in Russia.
The financing risk in Russia
We have calculated the financing risk to be 4/4, which equals a high risk. A high financing risk score is high for countries in Europe.
The country's banking system, efficiency, and stability influence the financing risk. You can find the extra information for Russia in the table below:
In Russia, the credit information sharing index is 7 on a scale from 0 (low) to 8 (high). This means the accessibility and quality of credit information available in Russia is medium-high.
This makes it easy for you to understand the credit risk of your counterpart in Russia. You should therefore be able to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.
Your legal rights as a creditor (and as a borrower) are 9 out of 12 and, therefore, strong.
The high financing risk for creditors also impacts the high interest rate in the private sector of 6,73%.
Debt Collection in Russia: Frequently Asked Questions (FAQ)
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Debt collection in Russia can be complex, with poor payment behavior from domestic firms and uncertain payment terms. Legal proceedings may be complicated if the debt is disputed, and insolvency proceedings are something to avoid if possible. It is common for payments to be late. Bank transfers are becoming more popular, but negotiating down payments is important because company directors may disappear without notice. Foreign companies can also settle in Russia through branch offices. The debt collection process in Russia typically involves three steps: uploading the claim, amicable collection, and evaluation. Debitura can help with all three steps in Russia.
The debt collection process in Russia generally involves three steps: pre-legal collection, legal debt collection, and debt enforcement. This involves submitting your claim to a partner who can help you, attempting amicable collection to get the debtor to pay or start a payment plan, and evaluating the next steps if amicable collection fails. This can include debt surveillance, legal collections, or debt enforcement through the bailiff's court. Debitura can assist you with all three steps in Russia.
If the debt is disputed, a civil lawsuit is required for debt collection in Russia. Legal actions including debt enforcement and insolvency proceedings require a local lawyer. Simplified court proceedings are available for debts less than RUB 800,000 (EUR 9,176) for companies or RUB 400,000 (EUR 4,588) for individuals. The Russian legal system is complex, with different courts for different types of cases. Lastly, for insolvency proceedings, the final stage is to sell the debtor's assets and distribute the money to the creditors following debt priorities.
The cost for debt collection in Russia depends on your case and desired actions. Debitura offers a no-cure-no-pay model for pre-legal collection, with a success fee between 10-20%. For legal action, prices also vary. Debitura can provide 3 quotes from trusted debt collection lawyers in Russia to help you find the best option for your needs.
The time it takes to collect a debt in Russia depends on the individual case and the debtor. If the case can be resolved in the pre-legal phase, it usually takes 3-6 months to collect the debt. However, if legal action is required, the collection process typically takes 12-18 months. It's important to have a professional debt collection agency to handle your case and ensure a successful outcome.
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