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Options for employment of Belarus-based individuals for foreign companies

Belarus is 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 usual.

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.


14.05.21


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