a popular destination for IT outsourcing, due to the amount of talent in Belarus´s
sizeable workforce. In addition to IT outsourcing, foreign companies are sometimes
looking to hire Belarusians for project-related work or various consulting
services. This is not as easy to accomplish as for example in the EU, where a
foreign company can just register as a foreign employer and tax payer without
having a legal entity in the country. In Belarus such a registration is
unfortunately as of yet not possible. This means that foreign companies are
left with several options to employ Belarusians within Belarus:
1. Establish their own legal entity inside
the borders of Belarus. This can be a LLC or a representative office depending
on the goal of the business. In this way the foreign company employs Belarusians
through their Belarusian subsidiary. Normal payroll taxes are usually applicable.
Establishing a subsidiary in the form of an LLC is a favorable option especially
for IT companies, as there is a special tax regime in Belarus called the High-Tech
Park where payroll taxes for IT professionals are significantly lower than
2. Use an Employer of Record or (EOR)
company in Belarus. These are companies already established inside Belarus,
which provide employment services. This option is not recommended, as the local
legislation does not provide a framework for it. The arrangement may carry
legal and tax risks.
3. Purchase services from Belarusian
individuals who have registered themselves as individual entrepreneurs. This is
in effect a B2B arrangement instead of employment. The foreign company remunerates
the Belarusian individual by way of paying their invoices. This arrangement is facilitated
by a service agreement for consulting or other services. Before using this arrangement,
an analysis should be made on whether or not it creates a permanent
establishment risk in your particular situation.
Feel free to contact Leinonen Belarus if you are looking for options to employ Belarus-based workers for your business. We will be happy to provide more information about the available options.
We will send you articles keeping you up to date with the latest trends and developments in accounting, taxation or legal fields.