BUYING PROPERTY FROM BANCRUPCY AUCTIONS IN RUSSIA

BANCRUPCY AUCTIONS IN RUSSIA 

How it works?

When Company is going bancrupt in Russia its property is being sold on auction. Auctions details are being published in "Kommersant" newspaper on weekly basis every Saturday. Goods which are being sold on auctions include all type of property, equipment, machinery, cars, etc.  We are mainly buying on third stage of auction known as a public offer. Difference from first two auction sessions is that Price during public offer (3rd auction) is going down over a period of time before asset is being bought or minimum price is reached. 

Bancrupcy auctions are held on web-based electronic trade portals. Now it is more than 150 different electronic platforms where bancrupcy auctions are held, but principles of operation are the same for all of them. Buyer should register in advance and get authorisation by providing necessary legal documents. Also a prepayment to specified account is being made before your bid is being submitted. After changes in legislation on bancrupcy auctions in 2014 winner is defined as a Company which offered maximum price during corresponding active period of auction provided it has all necessary documentation in place.

Are foreign Companies able to buy from bancrupcy auctions in Russia?

Yes, foreign Companies are able to buy from bancrupcy auctions but all required documents should be translated and verified into Russian. Also some type of land is only available for rent to foreigfn companies (for example land near state border, farm land, sea ports land, etc). Taxation for foreign Companies differs from taxation to Russian Companies as well.

What are main benefits of buying from bancrupcy auctions in Russia?

Main benefit of buying from bancrupcy auctions is that you can buy property, production facilities, warehouses and other assets in Russia with considerable disount from market price. Usually it is 20-30% discount, but in some auctions it reaches 70% discount. 

What are main concerns when buying from bancrupcy auctions in Russia?

Main concern is that you are buying from bancrupt company. It means you need to check assets very carefully, because it is really hard to get your money back in case you bought something and did not like it. In fact money goes not to bancrupt company but to its creditors who are not likely to give money back after they get it.

What does Saint-Petersburg Business Gate offer our Customers?

We offer agent services for buying from bancrupcy auctions in Russia including monitoring of required property or other assets, requesting documents for assets being considered, preparation of documents for auction, handling auction procedure on electronic platform.

ADVANTAGES OF USING SALES REPRESENTATIVE IN RUSSIA

What advantages international business can recieve by using Sales Representative in Russia?

1. Sales
Main advantage of using Sales Representative in Russia is that you gain access to really big market. Russia is a huge area which is more than one-eight of the Earth's inhabited area.

2. Minimization of your business risks on the market
Using Sales Representative in Russia you do not need to register branch office or representative office in Russia. This means you do not need to interact with numerous Russian Authorities which will definately save your time and nerves.

3. Flexibility 
When using Sales Representative you can quickly change your presence on the market depending on the situation and market condition.

4. Cost Effectiveness
When using Sales Representative you pay monthly fee plus percentage from sales turnover. You do not need to pay for office costs, salary to your employees, payments to social funds, etc.

5. Overcoming market peculiarities
Russian business model still have some peculiarities, using Sales Representative gives you knowledge of tricks and traps which cannot be seen from first sight.

These are advantages of using Sales Representative in Russia, but there are disadvantages as well:

Main disadvantage is that Sales Representative Company is not your Company but your Representative Company. If Sales Representative is not professional or does not have necessary experience in international trade it may have negative influence to your sales figures.

Another possible disadvantage is misunderstanding between Parties which may occur especially on first stages of collaboration.

HINTS: 

1. Discuss your proposal to Customers in Russia in details. Ensure your Sales Representative understands your Company sales policy the same way that you do. (Sales pricing, Discounts, Terms of Payments. Minimum Order, Incoterms, etc.)

2. Use professional Sales Representative. This will save your time and money.

Regards, SPB BUSINESS GATE