Contacting Business People In Belarus: A Guide

Belarus is a favourable destination for investment, with a strong business environment and a large focus on its industrial sector. The country boasts a highly educated and skilled workforce, with over 90% of the population having higher, secondary or basic education. The country's economic and geographical location is advantageous, with developed transportation and logistics infrastructure connecting the EU and EaEU. Belarus is also part of the Eurasian Economic Union, offering a common customs territory and ensuring the free movement of goods, services and capital across Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. The country's legal system propagates foreign property ownership, complete equality of rights to foreign investors, protection against discrimination and freedom to repatriate profits. The World Bank's Doing Business 2020 report ranks Belarus 30th for starting a business, while the country ranks 49th in the World Bank's Ease of Doing Business Index.

Legal requirements for setting up a business in Belarus

The Belarusian government has made it a priority to improve the overall business climate by making it easier to start a company. Here are the key legal requirements for setting up a business in Belarus:

Choosing a Legal Form

The first step is to choose the appropriate legal form for your business. The most common forms of legal entities in Belarus include:

• Sole proprietorship: Can be established by only one individual or entity, with 100% of the authorized capital needed within 12 months.
• Limited liability company (LLC): Can have between 1 and 50 shareholders, and requires a statutory capital of €50 (Belarusian ruble) to be paid within a year of registration.
• Additional liability company (ALC): Similar to an LLC, with 1 to 50 shareholders.
• Open joint-stock company (OJSC): Any person can acquire shares, with a minimum authorized capital of 400 base amounts.
• Closed joint-stock company (CJSC): Shares are held only by shareholders, limited to 50, with a minimum authorized capital of 100 base amounts.

Company Name Approval

The company name approval procedure is free of charge and must be done before state registration. You can check available business names on the Unified State Register of Legal Entities and Individual Entrepreneurs' website. The application for name registration can be submitted in person, by post, or via email, and will be processed within one day if done in person, two working days if by mail, and by the next business day if submitted online.

State Registration

State registration can be done through the Unified State Register (USR) website or via a notary. The required documents include:

• Application for state registration
• Charter or articles of association in two copies without notary certification, along with an electronic copy
• Payment document confirming the state fee, unless paid through the Unified Payment and Information System
• Legalized extract from the commercial register of the country of incorporation for foreign organizations, or a copy of the identity document for foreign individuals, along with translations into Belarusian or Russian

Visa and Work Permit

Foreign nationals looking to start a business in Belarus must obtain the relevant visa and work permit. The Belarus government offers three types of work visas:

• Type B visa for transit
• Type C visa for short-term visits (up to 90 days) or company expansion to Belarus
• Type D visa for long-term stays

To obtain a work visa, you must submit the visa application form, recent passport-size photographs, a valid passport, documents supporting medical insurance, a certified copy of the work permit, and payment proof for the visa fee.

Taxes

When incorporating a company in Belarus, you must pay taxes to the Ministry of Taxes and Duties. The corporate income tax rate is 18%, the personal income tax rate is 13%, and the VAT is 20%.

Directors and Shareholders

The number of directors and shareholders depends on the type of company. For a limited liability company, you need one director (who must be a Belarusian resident) and at least one shareholder. For a joint-stock company, you need two shareholders of any nationality and a Belarusian director, along with an auditor.

Special Economic Zones

Belarus has established Free Economic Zones (FEZ) to promote private sector development, improve the enterprise sector, and attract investments. While registered businesses in an FEZ require a minimum capital of €1 million, there are several benefits to this route, including tax incentives.

Business customs and etiquette

When doing business in Belarus, it is important to be aware of the local customs and etiquette to ensure smooth interactions and transactions. Here are some key considerations for business customs and etiquette when contacting business people in Belarus:

Communication Style

Belarusians value clear and direct communication. When corresponding with business contacts, it is essential to be concise, specific, and straightforward. Avoid vague or ambiguous statements as they may create confusion or mistrust. Be respectful and maintain a professional tone in your communication at all times.

Language

Belarus has two official languages, Belarusian and Russian. While English is also widely spoken, particularly in business circles, it is beneficial to have materials translated into Belarusian or Russian. This includes business proposals, presentations, and marketing collateral. Consider hiring a professional translator or interpreter to ensure accurate and effective communication.

Business Attire

Belarusians generally dress in a conservative and formal manner for business occasions. Both men and women typically wear suits in dark or neutral colours. Ensure your attire is well-tailored and polished, as first impressions are important. Avoid overly casual or revealing clothing, as it may be perceived as disrespectful or inappropriate in a business setting.

Business Meetings

Punctuality is highly valued in Belarus, so always arrive on time for meetings. Greet your Belarusian counterparts with a firm handshake, maintaining eye contact and a friendly smile. Business cards are commonly exchanged, so ensure you have a sufficient supply of your own cards printed in English and, if possible, translated into Belarusian or Russian. During meetings, be prepared for a direct and results-oriented discussion. Belarusians tend to be efficient and focused, so come prepared with a clear agenda and supporting materials.

Business Relationships

Building strong relationships is crucial for successful business interactions in Belarus. Belarusians appreciate professionalism, expertise, and a respectful attitude. They tend to be reserved and may take time to build trust, so be patient and consistent in your approach. Developing personal connections and demonstrating a genuine interest in your counterparts can go a long way. Social events or informal gatherings can be important for relationship-building, so accept invitations whenever possible.

Gift-Giving

Gift-giving is not a common practice in Belarusian business culture. However, if you are invited to a Belarusian colleague's home, bringing a small gift such as flowers, chocolates, or a bottle of wine is appropriate. Avoid giving expensive gifts, as they may be perceived as bribes or attempts to influence decision-making.

Negotiations

When negotiating with Belarusian business people, be prepared for a thorough and detailed discussion. They may take a firm stance during negotiations, so be ready to support your proposals with facts and logical arguments. Compromise and flexibility are important, and finding a mutually beneficial solution is typically the ultimate goal. Respect their negotiation style, and avoid putting pressure on them or using aggressive tactics.

Business Dining

Business meals are common in Belarus, and they provide an opportunity to strengthen relationships. Table manners are important, so be mindful of your dining etiquette. Wait until you are prompted by your host to begin eating, and use proper utensils and table manners. Avoid discussing business during the meal, as this time is often reserved for casual conversation and getting to know one another.

Investment opportunities

Belarus is a country open to foreign investment, offering favourable business conditions and a strong business environment. The country has a large focus on its industrial sector, with a wealth of opportunities for investment.

Benefits for Investors

• Strategic geographical location with direct access to ЕЕU markets (Belarus, Russia, Kazakhstan, Armenia, Kyrgyzstan)
• Well-developed infrastructure, including transport, logistics, and communications
• Progressive investment legislation
• Investor rights and investment protection
• Attractive investment climate and favourable taxation policies
• Government support in the form of guarantees, benefits, and preferences
• Privatisation opportunities
• 6 free economic zones
• Highly skilled workforce
• Good quality of life

Priority Areas and Sectors for Foreign Direct Investment

• Pharmaceutical industry
• Biotechnology industry
• Nanotechnologies and nanomaterials
• High technologies in the industry
• Petrochemical and chemical industries
• Mechanical engineering industry and production of machines and equipment
• Transport and transportation infrastructure
• Production of construction materials
• Information and communication technologies

Investment Projects

The National Agency of Investment and Privatization has a list of investment projects in Belarus, including:

• Construction of a new factory for the production of chipboard
• Construction of a factory for the production of bleach pulp
• Creation of an enterprise for extraction and bottling of natural ultra-preserved and children's drinking water
• Organization of gypsum board production
• Production of automobile filters
• Creation of a medical and tourist complex based on a unique source of ultra-fresh groundwater
• Construction of a sports and recreation complex in various towns
• Creation of a cultural and entertainment center at the site of historical and cultural value “Water Mill”

Support for Foreign Businesses

The National Agency of Investment and Privatisation was set up to attract inward investment and help international companies in Belarus. Services for foreign investors include:

• Preparing investment proposals
• Looking for potential investors
• Research and analysis for potential investors
• Facilitating interaction with government bodies and national institutions
• Arranging meetings with government officials
• Introductions between Belarus businesses and foreign partners
• Newsletters and market research
• Support and guidance

Other organisations that can help foreign businesses include:

• Belarusian Chamber of Commerce and Industry
• Belarusian Universal Commodity Exchange
• National Centre for Marketing and Price Study
• Agency of International Business Development

Taxation rates

Belarus has a standard corporate tax rate of 20% as of 2023, which was increased from 18% in 2022. This rate applies to both foreign and national companies, but only on revenue sourced from Belarus. The standard corporate tax rate includes capital gains tax, which is included in the taxable income of companies.

From 1 January 2024, a higher tax rate of 25% will be introduced for resident companies and Belarusian permanent establishments of foreign companies if their total tax base for the year exceeds BYN 25 million. This higher rate will apply to the total taxable profit of the year but will not include transactions subject to reduced or increased tax rates.

Belarus has a personal income tax rate of 13%. The VAT rate is 20%, which was also increased from 18% in 2023. The following items are exempt from VAT: financial services, insurance services, educational services, cultural services, housing services, medical services, certain medical equipment and devices for disabled persons. A reduced rate of 10% applies to sales of crops, sales of store cattle, sales of fish and hive products produced in Belarus, and sales or imports of goods for children and food products as per the list established by the Belarusian President. Telecommunications services are taxed at a higher rate of 25%. Exported goods and related services are zero-rated.

Other corporate tax rates include:

• 25% for banks, insurance companies, and companies deriving profits from foreign exchange transactions
• 30% for cellular mobile telecommunications operators and commercial microfinance organisations (from 1 January 2023 to 1 January 2025)
• 50% for companies that transport oil and oil products through pipelines in Belarus
• 10% for income from high-tech products (5% for self-produced goods included in the list of high-tech goods until 1 January 2024)
• 5% for profits from the sale of self-produced food products for young children (from 1 January 2024)

Foreign companies may not establish branches in Belarus but can establish subsidiaries, representative offices, or permanent establishments, which are taxed at the standard rate of 20%. Income of non-resident companies sourced in Belarus that is not related to the activities of a permanent establishment is subject to withholding tax at rates ranging from 0% to 15%. Dividends paid by a Belarusian company to a non-resident are taxed at a rate of 15%.

Social security contributions payable by the employer amount to 34% of the gross salary (28% for pension insurance and 6% for social insurance). Employers also pay a contribution for workplace accident insurance equal to 0.6% of salary (multiplied by coefficients of up to 1.5 for certain trade groups). An amount equal to 1% of an employee’s wages is withheld by the employer and paid on behalf of employees for the social security fund.

Self-employed individuals and individual entrepreneurs must make contributions for pension insurance at a rate of 29% and for social insurance at a rate of 6%.

Business services

Belarus has a strong business environment and a large focus on its industrial sector, making it an attractive prospect for investors. The country has a wealth of opportunities for businesses of all sizes and across a vast number of sectors.

Business Support

The Belarusian government has established the National Agency of Investment and Privatisation to attract more foreign investors to the country. This agency provides free services to foreign investors, including:

• Preparing investment proposals
• Looking for potential investors
• Research and analysis for potential investors
• Facilitating interaction with government bodies and national institutions
• Arranging meetings with government officials and other contacts
• Introductions between Belarusian businesses and foreign partners
• Newsletters and market research
• Support and guidance

The Belarusian Chamber of Commerce and Industry is another key organisation for international trade in Belarus. It helps businesses with:

• Finding business partners for foreign companies
• Support for Belarusian companies trading abroad
• Legal and commercial advice
• Translation and interpreting services

Business Structures

Belarus has several types of business structures that foreign companies can choose from when setting up a business in the country:

• Sole proprietorship: Can be established by only one individual or legal entity.
• Limited liability company (LLC): Can have between one and 50 shareholders, and must have one director who is a resident of Belarus.
• Additional liability company (ALC): Similar to an LLC, but with additional liability protection for company directors and shareholders.
• Open joint-stock company (OJSC): Any person can acquire the company's shares.
• Closed joint-stock company (CJSC): Shares are held only by the entity's shareholders, with a maximum of 50 shareholders.

Registration Process

To register a business in Belarus, companies must:

• Decide on a legal form.
• Check available business names and register their chosen name.
• Choose a location and legal address.
• Draw up a charter or articles of association.
• Submit the required documents to the local registration authority for state registration.

Visas and Work Permits

Foreign nationals looking to start a business in Belarus must obtain the relevant visa:

• Type B visa: For transit.
• Type C visa: Suitable for short-term visits of up to 90 days, or for company expansion to Belarus.
• Type D visa: For long-term stays.

In addition, a Special Work Permit is required for foreign employers before beginning any work in Belarus.

Frequently asked questions