Doing business in Belarus is getting easier for foreign investors
Business-wise, Belarus is one of the most dynamic and fast-growing countries in the world that attracts more and more investors every year. But what makes it an enviable place to set up a company? And is it difficult to start a business in the country that has only recently moved up from the economic freedom status of “repressed”?
The Republic of Belarus is situated in the crossroad of business opportunities as it lies in the heart of the trade roads from west to east and from north to south. The country’s favorable geographic position, perhaps best in its region, has resulted in improvement of the investment climate with over 200 million potential consumers.
Belarus is a member of the Eurasian Economic Community (EEC) that serves to facilitate the economic cooperation between Central Asia and Russia with goods being delivered having no significant trade barriers. Today companies who decided to invest in Belarus kill two birds with one stone as they automatically enter the 180-million market of three members of the community.
However, EEC will cease to exist on 1 January 2015 as the community will be enlarged and transformed into Eurasian Economic Union with Armenia joining the union.
Being trade-friendly and having highly skilled workforce, Belarus now shows the highest in its history capacity to carry out profitable business activity. In 2005, unique High Technology Park (HTP), which creates a favorable environment for business development in the field of information technologies, was opened in Minsk.
The park delivers a great opportunity to develop IT industry by providing inimitable incentives for investors and welcoming its residents by providing a tax-free zone (including zero VAT, profit tax, and customs duties).
The Hi-Tech Park also allows its residents to be located outside the park that establishes a strong educational and scientific base for the development of technologies across the whole country (from big cities to small towns).
Industrial Park “Great Stone” is another strategically important business project that provides enviable economic climate for doing business in Belarus. Living areas, offices, shopping malls, financial and research centers are to be located at the territory of the park that has excellent conditions and tax benefits (exemption from customs duties and VAT, regime of a free customs zone).
If you are a foreigner who is looking for the options of setting up a business in Belarus, there are certain key moments that you have to consider before jumping into establishing your company. The first thing you have to do is to find the right business partner as well as to hire a good local lawyer who is familiar with the commercial law and legal requirement and who can assist you throughout the whole process of setting up a business in another country.
If you are planning on trading with Belarus, then there is no need for you to register the company. However, if you opt for long term business, then registering the company is a wise move as it will help to facilitate the process of communicating and will help to build a strong and trustworthy contact with your partner.
If you are interested in trading as a foreign company, there are two options to consider: a representative office (RO) and a legal entity. The latter option, perhaps, has a better long-term commercial potential, whereas, having an RO excludes taxable presence within the country that greatly simplifies the process of the set-up procedure. You only need an application form, statutory documents and power of attorney, notarized in Belarus to start your business as a representative office. Usually it doesn’t take longer than 7 days once the documents are ready and submitted.
To set up a legal entity in Belarus, one is required to have a state registration, open bank accounts, prepare a company stamp or seal, and obtain tax identification number. It is also required to have at least 20 000 Euro as the minimum Charter Capital.
Since setting up a legal entity is a more complicated process, it takes a bit longer to be established. Besides, it might take a while to collect the pile of the necessary documents together with the apostils and notarizations.
It is important to mention that Belarusian ruble is the only currency that can be used for transactions and payment within the country. However, to combat the problem of the floating exchange rate and to facilitate business-to-business negotiations, US dollars or Euros are used.
Since the Belarusian government wants to engage into international business and to improve investment climate, it has passed modest reforms to simplify the tax system by reducing the number of applicable taxes and duties and by facilitating the procedure for tax settlement and payment. The government introduced low tax rates– 18% on corporate income and 12% on personal income, which have contributed to strong foreign investment inflows.
Today there are a number of international companies that serve as a great example of a successful business activity in Belarus. Belarus has become a home for running business for more than 5,000 foreign investors from 77 countries from all over the world, including such global giants as Bosch, Heineken, Coca-Cola, Hewlett Packard.
As a result, great conditions for doing business make Belarus one of the most attractive countries not only of its region but also of the world. Therefore, if you are looking for the right place to set up a company to benefit from the emerging markets and to enjoy the simplified taxation system, you are welcome to Belarus.