Business in Belarus
Before undertaking business activity in Belarus, it is necessary to choose which type of legal entity to form. The type of company form will influence all the activity of the company, which includes financial and tax reporting as well as customs procedures. An investor should pay special attention to determining the appropriate corporate form according to their goals. The most common company forms used are the Limited Liability Company or LLC, and the Representative Office.
As in most countries, the LLC company form allows the owner to undertake most business activities without restrictions as their own legal entity. Conversely, the representative office allows only for activity that supports the owning company's business - usually this is marketing activity done locally in order to create sales for the parent company.
Some business areas require licenses in Belarus. These include banking and financial activities, legal counseling, power supply, alcohol and tobacco sales and production, telecommunication, insurance activity.
Companies established in Belarus pay 18 % corporate income tax on their profits. If you are establishing an IT business or a production plant, we highly recommend to consider the Belarus High-Technology Park and Great Stone special economic zones. These zones offer very attractive tax breaks to foreign investors. Ask us
to learn more about the special economic zones in Belarus.
The personal income tax in Belarus is 13 % for salary and investment income. The employer pays a 34 % social tax rate from the employee's gross salary. Both of these rates are significantly reduced in the free economic zones.
Standard VAT rate is 20 %. Export of goods VAT is 0 %, for services it can be 0 or 20 % depending on the place of receiving services, place of registration of the recipient etc. Import of goods and services to Belarus is subject to 20 %VAT and customs duties.
In Belarus, special economic zones are areas with special legal status and various economic benefits designed to bring Russian and foreign companies into sectors that are considered as a priority in the Belarusian economy. Examples of SEZs are the Belarus High-Technology Park and the Great Stone industrial park. Companies enjoying the tax benefits of HTP can be located anywhere in Belarus. Production companies working in Great Stone need to be located within the park limits near the Minsk international airport. For more information about taxation in these zones, contact us.
The regulation of employment in Belarus is governed by the Labor Code of the Belarusian Republic, which applies equally and must be complied with by both the executives and employees. Belarusian labor laws apply to foreign nationals and foreign businesses in Belarus in the same manner as to domestic entities. All regulations related to minimum guarantees, employment benefits and compensation supersedes any agreement between the employer and employee. In general, the Belarusian labor law is protective of the employee.
Expats are liable to pay resident Belarusian taxes and social charges only if they stay in the country at least 183 days during a calendar year. Your employer will typically arrange for your registration with the Belarusian tax office and secure your tax number. Self-employed workers will need to arrange their tax registration and Belarusian tax number themselves. Belarusian social security payments are deducted from your gross salary by the employer.
In the condition of an employer-terminated agreement as a result of redundancy or liquidation, two months’ notice is given along with a two months’ salary severance payment to the employee.
Termination of the employment agreement by the employee may be carried out by providing one months' written notice to the employer, which is a basic right under the Labor Code that cannot be overridden by contractual terms.
BEING AN EXPAT
An investor looking to start a company in Belarus may want to consider moving here to manage their company. In this case they must first start their company so that they have the company's registration certificate, and after that apply for a work permit. The work permit entitles them to receive an entry visa into Belarus, and afterwards apply for a year-long work visa and temporary residence. This process is somewhat cumbersome but easily done with the right help. It is also possible to visit Belarus for a maximum of 30 consecutive days visa-free, not more than 90 days per each 180.
Minsk is a very nice place to live, and the living costs are quite low. Finding an apartment may be tough if requirements are complex. Usually foreigners who move to Minsk will not have too many great apartment options to choose from at first. We recommend to use a real-estate agent when looking for an apartment, as most of the advertisements online are outdated.
The foreign national who is living or working in Belarus for more than 183 days in a calendar year is obliged to pay taxes and contributions towards the Belarusian social security system. Usually double taxation can be avoided but this should always be checked on a case-to-case basis.