Belarus Info
Joined: 20 Apr 2007
Posts: 13
Home Country: belarus
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 Posted: Tue May 08, 2007 2:45 am Post subject: DOING BUSINESS IN BELARUS / BELARUS BUSINESS GUIDE |
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DOING BUSINESS IN BELARUS
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Private Limited Company
Minimum Capital Requirement: 4,751,164
City: Minsk
Registration Requirements:
Procedure 1. Obtain an approval of the company name with the Ministry of Justice
Time to complete: 1 day
Cost to complete: BYR 29,000
Comment: Now the procedure of reserving future names for companies is executed by the Ministry of Justice. A company need not approve its address - it just must have a guarantee letter from the owner of the office. If a company rents an office in an administrative or social state-owned building (e.g. children institutions, schools, medical centres, museums, administrative buildings for executive organs of state-owned plants and factories, etc.), it must have an approval from the special commission. The Commission approves this every other week. The company must not have a guarantee letter from the owner of the office.
Procedure 2. Open a temporary bank account
Time to complete: 1 day
Cost to complete: no charge
Comment: Founders of Private Limited liability company have to make 50% of the Company's fund before the procedure of registration
Procedure 3. Notarise documents and pay a registry fee
Time to complete: 1 day
Cost to complete: BYR 900,000
Comment: The notary fees may rise depending on the amount of founders. In the case of 5 founders the payment would be about BYR 900,000. Notary fees may also rise depending on the quantity of pages of the Constituent agreement and the Charter of the Company, as well as on the change of the base rate
Procedure 4. Business registration with the State Registry
Time to complete: 30 days
Cost to complete: EUR 60
Comment: The registry also checks the background of founders and registers the company into the unified registration database.
The registration process has become slightly faster since the commission on company registration meets every week instead of every two weeks. However, if the register needs to make an inquiry for additional information about the founders of the Company, it can extend the term until 2 months, in such case it should notify the founders. The Investment Code establishes the brief term of 15-20 days for registration of companies with foreign investments.
Procedure 5. Obtain the approval of the company seal draft from the Registry
Time to complete: 3 days
Cost to complete: no charge
Comment: The draft of the company seal is approved by the registry organ only after the company has been officially registered.
Procedure 6. Obtain the approval of the company seal draft from the local police department
Time to complete: 8 days
Cost to complete: no charge
Comment: Formally, no fee is established, but the police department in practice asks 1-2 base rates.
Procedure 7. Prepare a business seal
Time to complete: 1 day
Cost to complete: BYR 50,000
Procedure 8. Receive a Management Certificate for the CEO
Time to complete: 7 days
Cost to complete: BYR 29,000
Comment: The CEO (director) should be resident of Minsk or Minsk region (in case when place of company registration is Minsk) otherwise the company must pay local fee in sum of 500 base rates. Also the company must pay this fee for all employees which are not living in Minsk or Minsk region. The director of the company with foreign investments could also be a foreign citizen. In this case the company is not obligated to pay local fee. However, the company with domestic investments is barred to have a director, a foreign citizen, except for citizens of Russian Federation. In the latter case, the company must pay local fee in the amount equal to 2 500 (two thousand five hundred) US dollars.
Procedure 9. Notarise the received company documents
Time to complete: 1 day
Cost to complete: The notary fee is 30% of the base rate for each page of the document
Procedure 10. Register the company in the Tax Office
Time to complete: 6 days (for getting the account number of payer)
Cost to complete: no charge
Procedure 11. Apply for a Statistical Number
Time to complete: 1 day
Cost to complete: no charge
Procedure 12. Apply for duplicates of a Company's taxpayer ID
Time to complete: 4 days
Cost to complete: no charge
Comment: The Company must obtain one duplicate of its taxpayer ID for one bank account. If the company opens some bank accounts in different currencies (i.e. BR, USD, Euro, etc.) it should get additional duplicates.
Procedure 13. Apply for a certificate for opening a bank account from the Social Security Office; register the company with the Social Security Office
Time to complete: The procedure usually takes 1-3 days.
Cost to complete: no charge
Procedure 14. Notarise a card with signatures of a Company's Director and Chief Accountant and a sample of the Company seal
Time to complete: 1 day
Cost to complete: BYR 232,000
Procedure 15. Register the company in the Belgosstrakh (state insurance company)
Time to complete: 1 day
Cost to complete: no charge
Comment: According to the Decree of the President of the Republic of Belarus № 18 of July 30, 2003 from 1 January 2004 every Company must register as a payer of Compulsory insurance upon accidents on manufacture and professional diseases.
Procedure 16. Open a regular bank account
Time to complete: 1 day
Cost to complete: depending on the bank, there is either no charge for opening a regular bank account, or it could be up to 10 base rates.
TAXATION
Corporate tax
Standard rate: 24% (30% for insurance companies)
Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Belarusian-source income. Companies registered under the law of Belarus are resident for tax purposes. Business profits, including capital gains, are subject to the corporate profits tax, charged at a rate of 24%. There is also a corporate income tax that applies to dividend distributions, banks and insurance companies, and transactions in securities. The rate is 30% for insurance companies and 40% for transactions in securities. As from January 1st 2006, banks are subject to the general corporate profits tax at the 24% rate, rather than the corporate income tax.
Individual tax
Progressive rates rising to 30%
Residents are taxed on their worldwide income; non-residents are taxed only on Belarusian-source income. An individual is resident if permanently residing in Belarus or if present in the country for more than 183 days in a year. Aggregate income, including business income, is subject to income tax at progressive rates from 9% to 30%. Dividends are taxed by a 15% final withholding tax.
Capital gains
Generally taxed as income
Capital gains are taxed as income, except where a company has foreign-source capital gains on securities, which are subject to corporate income tax at 40%.
Indirect tax
Standard rate: 18% ; Other rates: 10%
Value-added tax (VAT) applies to most transactions at the standard rate of 18%. A lower rate of 10% applies to supplies of certain foodstuffs and agricultural products; and services of repairs, hairdressing and laundries. Exemptions from VAT include banking and financial services, insurance, educational services and legal services supplied to individuals. Registration is compulsory for businesses.
Tax administration and compliance
Tax year: Calendar year
Companies must make monthly advance payments of the corporate profits tax and, if applicable, the corporate income tax, based on the submission of monthly returns. The tax year for individuals is the calendar year. Tax is deducted at source from employment income. Individuals receiving income other than employment income must submit a tax return by March 1st following the year-end.
Additional tax information
Withholding taxes: Dividends 15%, Interest 10%, Royalties 15%. These rates may be reduced by provisions of an applicable tax treaty.
Tax treaties: Belarus has concluded treaties with more than 40 countries and continues to apply some treaties of the former Soviet Union.
Dividends: Dividends are subject to corporate income tax at a rate of 30%. Dividend distributions are taxed by a final withholding tax of 15%.
Revenue protection: There is no transfer-pricing, thin-capitalisation or CFC legislation. However, an offshore duty of 15% is levied on transactions with companies registered in a tax haven and on deposits in a bank located in a tax haven.
Groups: There is no provision for group taxation.
Incentives: High-tech companies; free economic zones.
Other taxes: Corporate property tax, Customs and excise duties, Environmental tax, Land tax, Natural resources tax, Real estate tax, Contributions to the housing, employment and R&D fund and agricultural producers. |
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