How and Where to Check the Reliability of a Counterparty in Kazakhstan

Any companies and individuals with whom you conduct business are considered your counterparties. The success of your transactions equally depends on both you and your partners. This means that entering into business relationships is only advisable with verified, reliable, and responsible partners. Unfortunately, not all counterparties meet these criteria. How can you determine whether a partner is trustworthy? You need to assess the counterparty's risk level.

Why is this important?

Collaborating with an unscrupulous supplier can lead to financial losses. Moreover, it can damage your business reputation, especially if, due to an irresponsible partner, you fail to meet delivery deadlines or provide services on time.

Conducting checks is also crucial to protect yourself from tax issues.

Firstly, the tax authorities may audit one of your transactions, analyze acts and contracts, and verify settlements. If there is an error due to the counterparty, you will face difficulties.

Secondly, starting in 2024, checking a counterparty through the unified registry has become mandatory. This check must be conducted 10 days before concluding a transaction, and the check itself is free. It is necessary to demonstrate to the tax authorities that the transaction was carried out with due diligence, thereby protecting responsible businesses from undesirable consequences.

What you need to know about a counterparty

Researching a potential partner should be comprehensive. What should be checked?

1. General Information. This includes the company’s registration date, its address, and the contact details of its director. For example, if you and the counterparty are located in the same city, visiting their office can reveal a lot: if no one works at the listed address, then you probably shouldn't engage with that company. Experts recommend paying special attention to companies that have been recently registered.

2. Finances. Examine expenses, revenues, and profits. However, first and foremost, focus on debt to creditors and bankruptcy procedures. If a potential counterparty is bankrupt, they will not be able to fulfill their financial obligations.

3. Legal Status. Avoid working with companies involved in suspicious legal disputes, those with frozen accounts, or those that have had legal issues.

4. Reputation. Review feedback about the company, and if possible, communicate with the clients of your potential partner personally. Typically, a company's key clients are listed on their official website, so it’s just a matter of contacting them. Search for information about the company and its director online and pay attention to the context in which they are mentioned.

Don’t hesitate to request documents. For example, a certificate of state registration and tax registration can confirm that the company is not a shell company but a legitimate operation. Additionally, you can request a copy of the charter, financial reports for the previous year, a certificate of no tax arrears, and other documents.

What constitutes a reliable company after the inspection? A reliable business is one that has been operating for more than a year, its OKED codes match its core business activities, it has an open bank account, stable profits, and no debts to creditors.

How to Check a Company

In Kazakhstan, you can verify a LLP or an individual entrepreneur (IE) by their BIN/IIN or by the organization’s name. It's important to note that the government is interested in identifying irresponsible counterparties, so it provides entrepreneurs with access to basic data.

So, how and where can you check a counterparty in Kazakhstan by BIN? You can use various resources; here are some of the most popular methods.

How to Check a Counterparty in Kazakhstan through Official Government Websites

The Committee on State Revenues handles financial matters in the country and provides access to the following services:

1. Judicial Cabinet. This contains judicial acts since 2009, covering various areas of law (criminal, civil, administrative). It’s a convenient way to check whether your potential partner has been involved in any legal proceedings.

2. Unified Register of Debtors. This is one of the simplest ways to check online whether an IE has debt by its BIN and whether the IE pays its taxes.

3. Egov. On the e-government website, you can verify by BIN whether the IE exists. Here, you’ll receive information about the company’s name, its form (e.g., LLP), and the founder's name.

Checks through the Committee on State Revenues’ services are free.

How to Check the Status of an IE in Kazakhstan through Commercial Resources?

Three resources are of particular interest:

1. ABIS. The "Atameken" National Chamber of Entrepreneurs' service provides a report based on information from open sources. The report includes a general risk assessment of the company, relying on the taxpayer's integrity index.

2. Kompra.kz. This service is versatile as it allows you to determine whether a company pays taxes, is undergoing bankruptcy, or is involved in legal proceedings. You can check up to 2 counterparties for free, but additional checks require a fee based on the chosen tariff.

3. Business Analyst. This service allows you to review summary data (tax payments, presence in state registries, etc).

How to Check a Company through Banking Services

Another way to check a company (as a VAT payer and otherwise) is by using a bank's service. For example, at the end of January, Bank CenterCredit launched such an option. The service allows you to assess the reliability of a counterparty not only in Kazakhstan but also in Russia. The check is conducted based on data available to the bank, such as BIN (for IE, LLP, and other legal entities) and IIN (for individuals), organization name, account number, or the bank where the counterparty is serviced.

The service provides a businessperson with comprehensive information about a potential partner:

• Details. This includes BIN, TIN, name, contacts, OGRN.
• Legal cases the company is involved in.
• Financial reports.
• Debt presence.
• Participation in public procurement.
• Availability of permits or licenses to perform certain activities, etc.

The service’s advantages include a simple interface, clear checks, and quick results.

What if the counterparty is from another country?

You can assess the reliability of a supplier even if it is a foreign company.

Suppose your business partner is from Russia. You can verify them through several methods, such as the “For Honest Business” portal. For this, you need to know the TIN (Taxpayer Identification Number), company name, or director's name. The portal's advantage is that its data is synchronized with the Russian Federal Tax Service. An alternative option is the List-Org service, which collects information about the company’s finances, debts, and participation in public procurement.

Bank CenterCredit’s service also allows you to quickly and conveniently check a counterparty from Russia. First, select “Russia” in the “Country” field in the "Counterparties" section of the business.bcc.kz online banking. Once selected, two new fields will appear: the counterparty’s TIN and OGRN. Fill in one of these fields, and the system will provide information on the reliability of your partner. You can check the company’s status, the number of employees, legal address, director’s name, and main activity type. For reliable companies, further analytical information is provided on favorable facts: the company is not bankrupt, has been actively operating for 12 months, has no debts on fees and taxes, and is not mentioned in the unreliable suppliers’ registries, shell companies, etc.

If necessary, you can download a detailed check report in PDF format.

Checking Chinese suppliers is a bit more challenging. The country doesn’t favor unified registries, and major commercial platforms don’t require companies to confirm their reliability. Therefore, entrepreneurs have to do the legwork themselves. What can be done?

• Verify the production address. If the company is registered at one address but the goods are produced at another, this should raise concerns. Often, this is a sign of intermediaries or even fraudsters.
• Request the counterparty's registration number. This number can be checked through the non-governmental website China Company Registration. Here, you can find information about the registering authority, the company's location, and its ownership form. Honest suppliers readily provide their registration number, and if they don’t, it’s better to avoid doing business with them.
• Request an export license.
• Verify the phone number. An interesting fact: any company in China is required by law to have a landline phone number. Call the company and ask a few questions (what they produce, how long they have been in business, etc.).

Checking a counterparty doesn’t take much time, but it significantly reduces the risks associated with finances and business reputation.

This article has been translated from its original language using neural network-based translation technology.