DOING BUSINESS IN BELARUS IN 2019
Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with i) Belarus business registration ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.
Bitcoin / crypto-currency
Accounting and tax regulations
Small business set up
Banking solutions
Summary table of Belarus company registration
| Summary | LLC | Free Zone company | Joint stock company | Representative office |
|---|---|---|---|---|
| Also known as | OOO | свободная зона | OAO | представительство |
| Best use of company? | All products and services | Manufacturing and export trading | To secure public funding | Marketing & research |
| How soon can you invoice Clients/sign sales contracts? | 4 weeks | 5 weeks | 6 weeks | 7 weeks |
| How soon can you hire staff? | 4 weeks | 5 weeks | 6 weeks | 7 weeks |
| How soon can you sign a lease agreement? | 1 week | 1 week | 1 week | 1 week |
| How long to supply corporate bank account numbers? | 8 weeks | 9 weeks | 10 weeks | 11 weeks |
| How long to supply company registration/tax numbers? | 4 weeks | 5 weeks | 6 weeks | 7 weeks |
| Corporate tax rate on annual net profits? | 18% | 0% | 18% | None |
| Limited liability entity? | Yes | Yes | Yes | No |
| Government grants available? | Yes | Yes | Yes | No |
| Government approval required for foreign owners? | No | No | No | No |
| Resident director/partner/manager/legal representative required? | No | No | No | Yes |
| Minimum paid up share capital? | US$1 | US$1 | US$1,175 | None |
| Can bid for Government contracts? | Yes | Yes | Yes | No |
| Corporate bank account location? | Belagroprombank | Belarusbank | Priorbank | Absolut Bank |
| Can secure trade finance? | Yes | Yes | Yes | No |
| VAT payable on sales to local customers? | 20% | 20% | 20% | None |
| Average total business set up engagement costs? | US$7,940 | US$10,790 | US$7,940 | US$11,090 |
| Average total engagement period? | 12 weeks | 14 weeks | 16 weeks | 18 weeks |
| Accounting and tax considerations | LLC | Free Zone company | Joint stock company | Representative office |
|---|---|---|---|---|
| Statutory corporate tax payable? | 18% | 0% | 18% | 0% |
| Legally tax exempt if properly structured? | No | No | No | No |
| Group HQ tax incentives? | Yes | Yes | Yes | No |
| Must file an annual tax return? | Yes | Yes | Yes | Yes |
| Must file annual financial statements? | Yes | Yes | Yes | Yes |
| Must appoint an auditor? | No | No | Yes | No |
| Access to double taxation treaties? | Yes | Yes | Yes | No |
| Withholding tax on payments to foreign shareholders? | 12% | 12% | 12% | None |
| Company Registration | LLC | Free Zone company | Joint stock company | Representative office |
| Resident director/partner/manager/legal representative required? | No | No | No | Yes |
| Minimum number of shareholders/partners? | 1 | 1 | 2 | Parent company |
| Maximum shareholding for foreigners? | 100% | 100% | 100% | 100% |
| Minimum statutory paid up share capital? | US$1 | US$1 | US$1,175 | None |
| Security deposit to be kept with Government? | No | No | No | No |
| Shelf companies available? | Yes | Yes | Yes | No |
| Time to incorporate a new entity? | 12 weeks | 12 weeks | 13 weeks | 14 weeks |
| Can easily convert to a PLC? | Yes | Yes | Yes | No |
| Public register of shareholders and directors? | Yes | Yes | Yes | Yes |
| Can have preference shareholders? | Yes | Yes | Yes | No |
| Business Considerations | LLC | Free Zone company | Joint stock company | Representative office |
| Good entity for trademark registration? | Yes | Yes | Yes | Yes |
| Can secure an import and export license? | Yes | Yes | Yes | No |
| Sponsorship by a local citizen required? | No |
| Our Client needs to travel to Belarus for business set up? | No |
| Temporary physical office solutions available? | Yes |
| You need a local resident as bank signatory? | No |
| Can be wholly foreign owned? | Yes |
| The entity will likely be regulated by? | Trade Register |
| Minimum number of directors/managers? | 1 |
| Monthly VAT reporting to the Government? | Yes |
| Must sign an office lease agreement during incorporation? | No |
| Shareholders & directors documents to be attested/translated? | Yes |
| Each foreign director needs a personal income tax number? | No |
| Foreign director needs a residence visa? | No |
| Maximum number of staff allowed? | No maximum number for any entity |
| Expatriate to local staff ratio? | None |
| Can secure residence visa for business owner? | Yes |
| Other useful information | |
| What will be included in my customer sales invoice? | Click link |
| This country has signed free trade agreements? | Yes |
| This country is a member of TRIPS? | No |
| This country is a member of the ICSID/WIPO? | Yes |
| Average custom duties suffered? | 5.2% |
| Government foreign investment approval required? | No |
| Average monthly office rental? (US$ per sq m) | US$20 |
| Minimum statutory monthly salary? | US$507 |
| Average monthly US$ salary for local skilled employees? | 3,591 |
| US$ deposit interest rate? (1 year average) | 1.95% |
| Overseas remittance currency controls? | Yes |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Good |
| Crowd funding available in this country? | Yes |
Belarus business setup summary
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Advantages and disadvantages
Advantages of Belarus company registration
- Belarus has no restrictions on the residency or nationality for directors, founders or shareholders of a Belarus business entity. As opposed to other nations in the region, no additional permits are required for a non-resident director of a Belarus business setup. In addition, there is no minimum capital requirement for a limited liability company in Belarus;
- The Belarus economy has been one of the most dynamic in Europe in recent years, with growth rates from 8 – 11% from 2004 – 2008. While the economy suffered during the global downturn in 2009, Belarus was one of the few countries to entirely avoid a recession and the economy has since recovered to post growth rates of 5 – 8% in the years following the recession. However, growth has not passed 2% since before 2012;
- Compared to countries of the western world, Belarus is very cheap, including food, transport, utilities, rent, wages etc. Specifically, office rental tends to cost a fraction of what it does in most western cities, a beneficial condition for business;
- The Belarusian government has taken steps in recent years to make foreign direct investment in Belarus a more attractive option, an advantage of operating a business in Belarus. In particular, the government abolished the golden share rule in Belarus, significantly limiting the ability of the government to interfere with the management of private enterprises;
- Belarus is positively ranked as the 44th easiest country to do business in, in a 2016 report published by the World Bank. Belarus’s high ranking is largely attributed to its simplified business registration process and the ease by which property can be registered in Belarus;
- Under certain conditions, dividends earned from sources within Belarus by a foreign organization are liable for a corporate tax rate of 0%;
- Belarus has 6 free economic zones which enjoy a range of customs and tax benefits, including i) exemption from VAT imposed by customs authorities on goods admitted for release into internal consumption, ii) exemption from corporate profit tax for first 10 years and iii) exemption from anti-dumping or countervailing duties pursuant to customs legislation.
Location
- The country’s geographically strategic position is between Europe and Russia. Therefore, businesses can utilize the most cost effective mode of transportation and export to both massive markets;
- Belarus’s relationship with Russia has gained it access to the Eurasian Economic Union, giving the country access to tariff-free trade with Russia, Kazakhstan, Armenia nad Kyrgyzstan.
Disadvantages of Belarus company registration
- Belarus has a corporate tax rate of 18%, and capital gains are taxed at a rate of 9 – 18%. In addition, there is a withholding tax rate of 12% on dividends, 10% on interest, 12% on capital gains and 15% on other income;
- The Belarusian economy suffered an internal economic crisis in 2011, largely due to a governmental attempt to raise average income in the country. Inflation reached upwards of 100% and the interest rates of several banks reached 120%. The Belarusian ruble has since recovered but is still reasonably unstable due to a lack of control methods;
- Belarus is not a member of the EU or the WTO and heavy-handed government interference in trade markets makes trade a very difficult process for a private Belarus business setup;
- Belarus suffers from high corruption, being negatively ranked as the 115th least corrupt country in the world in the 2015 Corruption Perceptions Index by Transparency International;
- Part of this is driven by the President, now in his fifth term in office. The President has broad legal powers and, until recently, was subject to sanctions from the EU for perceived human rights abuses;
- Belarus lacks investment and financial freedom, being ranked 157th in the 2016 Index of Economic Freedom by Heritage Foundation. The Belarusian government has little respect for property rights and government control is rigid in both the financial and investment markets;
- Belarus has been poorly ranked as the 108th freest economy (out of 180 economies) in the 2018 Index of Economic Freedom. This is largely due to its i) lack of freedom of the labour force, ii) poor fiscal conditions and iii) sluggish economic growth due to pervasive involvement and control of the government.
Language
- The official languages in Belarus are Belarusian and Russian. The majority of Belarusians are not fluent in English. Consequently, language is a barrier when conducting business because all the communications must be translated into Belarusian or Russian.
Other
- The Belarusian ruble (BR) is one of the most unstable currencies in the world. Thus, foreign investors can suffer large losses in foreign exchange when investing locally.
Best uses for a Belarus company
Industrial hub
Each region of Belarus has a free economic zone. By doing business in these zones, Clients enjoy a range of benefits including zero tax on exports for the first 5 years, priority at border crossings and full exemption from import duty on raw materials.
Company registration
- Time to incorporate: Four weeks
- Cost to set up: US$7,940
- Minimum capital: None
- Physical office required: No
Required appointments
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
Key facts
- Corporate tax rate: 18%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: LLC
