How can a Russian citizen open an individual entrepreneur or LLC in Belarus in 2024?
Due to the extremely close economic interaction between the Russian Federation and Belarus, many Russians are interested in the issue of opening an individual entrepreneur or LLC to work with foreign contractors, so the following questions arise:
Can a foreigner open an individual entrepreneur or LLC in Belarus?
How does this compare to other jurisdictions?
Which legal form is better? (spoiler – LLC)
Entrepreneurs in Belarus can take advantage of the following benefits:
Possibility of cross-border transfers: In the context of sanctions, in 2024 Belarus, along with other countries of the post-Soviet space, is a bridge for Russian citizens, connecting payment flows from abroad and vice versa, although not without difficulties, especially in matters of transfers between the USA and Europe. At the same time, the possibilities for money transfers between the two countries (RF and RB) are as wide as possible.
Less paperwork and a simple tax structure: Opening an individual entrepreneur or a company in Belarus involves three simple steps: obtaining a certificate of approval of the company name, registration in the state register and registration with the tax authorities. There are three main taxes for business in Belarus: VAT, profit tax and income tax.
Geographic location and trade agreements: The Republic of Belarus has a strategic location on the main trade route connecting Europe and the CIS.
Business and investment support: The government of the Republic of Belarus has created several free economic zones, special tax incentives and cooperation with China to create the China-Belarus Industrial Park “Great Stone” and the High-Tech Park.
But there are also disadvantages, primarily concerning non-residents.
Who can open an individual entrepreneur or LLC in Belarus?
Any citizen can open an individual entrepreneur and LLC in Belarus, however, to register an individual entrepreneur, foreigners, including citizens of the Russian Federation, must have a work visa or residence permit in the country. The same requirement can be found when opening an individual entrepreneur in Kazakhstan, but in Armenia, Georgia, Kyrgyzstan, such a requirement is absent and you can easily open an individual entrepreneur without the requirement of residence in the republic.
In case of opening an LLC in Belarus, there is no requirement for residency, the founder/director from the Russian Federation is not required to have a residence permit or work visa. Non-residents can also act as representatives of a legal entity when registering a business.
Documents required for registering an individual entrepreneur in Belarus
Below is a list of documents that will be required to register as an individual entrepreneur:
Identity document – passport or residence permit;
In case of registration through a representative – his power of attorney for further actions;
An application of the established form. The application form can be obtained at the place of registration;
One/two 3×4 photos;
Receipt of payment of state duty;
Non-residents must have a notarized translation of a copy of their passport into Russian or Belarusian.
Documents required for registering an LLC in Belarus
Application completed by business owner.
Passport
Receipt of payment of state duty.
Two copies of the Charter (for LLC).
Digital version of the Charter (For LLC).
Non-residents must provide a residence permit or work visa before registering an individual entrepreneurship (For individual entrepreneurs).
Non-residents must have a notarized translation of a copy of their passport into Russian or Belarusian.
Is it possible to open an individual entrepreneur or LLC in Belarus remotely online?
Yes, you will need a power of attorney and a notarized copy of your passport; in the case of registering an individual entrepreneur as a citizen of another country, a notarized residence permit in the Republic of Belarus.
To register an individual entrepreneur online, you will definitely need an electronic digital signature key. Without it, you cannot register and log in to egr.gov.by. This key is issued by the Republican Unitary Enterprise “Information and Publishing Center for Taxes and Duties” and the “National Center for Electronic Services”. The cost of the key (valid for one year) is 48.60 Belarusian rubles. Usually, checking the key and all necessary documents takes one day. The decision will be announced the next day, at which time a registration certificate will be issued.
How to register an individual entrepreneur and LLC in Belarus?
The procedure for registering an individual entrepreneur or LLC in the Republic of Belarus is quite simple and standard:
Approval and registration of the name: The company name must be approved in the Unified State Register of Legal Entities and Individual Entrepreneurs.
State registration: Once the name is approved, the applicant must complete state registration.
Tax registration: Every individual entrepreneur must have a VAT registration number. After completing the processes, the applicant can apply for a VAT number through the tax authorities of the Republic of Belarus.
Bank accounts: The business owner must open an account in a bank in Belarus. All transactions must be carried out through this account in Belarusian rubles.
Taxes for individual entrepreneurs and LLCs in Belarus
Individual entrepreneurs and LLCs can apply the following taxation systems:
single tax on individuals;
income tax (general tax system);
tax under the simplified taxation system (STS) (from 2023 only for LLCs);
value added tax (VAT);
excise taxes;
tax on the profits of foreign organizations not operating in the Republic of Belarus through a permanent establishment;
environmental tax;
tax on the extraction of natural resources;
offshore tax.
The tax system of Belarus can be conditionally divided into the main (OSN), income tax of 20% and simplified (USN) turnover tax of 6%. However, since 2023, individual entrepreneurs in Belarus cannot use the turnover tax system, so the rate for individual entrepreneurs on the simplified tax system in Belarus is 20%. Moreover, if the annual turnover exceeds 500,000 Belarusian rubles (approximately $ 155,000), the rate becomes equal to 30%. At the same time, if the turnover is exceeded in the 4th quarter, the 30% rate is recalculated for the entire turnover from the beginning of the year).
For service sector representatives from the Russian Federation, who more often use individual entrepreneurship and the turnover tax system, tax rates in Armenia (5%) or Kyrgyzstan (4%) may seem much more interesting compared to 30%. Kyrgyzstan can be singled out separately, where turnover restrictions have been completely lifted. Georgia, with a rate of 1%, looks quite attractive, but is much inferior to the countries above, including Belarus, in terms of the complexity or impossibility of money transfers from/to the Russian Federation.
For LLCs in Belarus, the simplified tax system of 6% – turnover tax, and the general tax system of 20% – profit tax with VAT of 20% are still in effect.
Thus, for representatives of the service sector from the Russian Federation, tax residents of the Russian Federation, working in the organizational and legal form of individual entrepreneurs, Belarus, due to the requirements for residency in the country for registering an individual entrepreneur and a relatively high tax rate, is the least suitable for doing business with foreign counterparties.
As for the profit tax for LLC, everything is more or less comparable with the countries of the former socialist camp. The tax rate for the simplified tax system for LLC is comparable to the Russian one and is inferior to Armenia (5%), Kyrgyzstan, Uzbekistan (4%), Kazakhstan (3%).
For tax residents of the Russian Federation who have opened a company on a simplified system abroad, it is also important to remember that the agreement on the absence of double taxation applies only to the main taxation system – income tax. If you choose a simplified system, there will be no deductions and you will need to pay the full amount of tax in both countries.
