Belarus: New restrictions for businesses from “unfriendly countries”

updated on 26 April 2024 | reading time approx. 2 minutes

On 23 April 2024, the Resolution of the Council of Ministers of the Republic of Belarus No. 299 (hereinafter – the “Resolution”) has been officially published. The new Resolution sets out new restrictions when it comes to payment of dividends by Belarusian business entities in favour of their shareholders from the “unfriendly countries”.

The “unfriendly countries” comprise the ones as follows:

EU member states
USA
UK
Switzerland
Norway
Liechtenstein
Canada
New Zealand
Albania
Iceland
Montenegro
North Macedonia
Australia

By default, a Belarusian company is not entitled to freely pay dividends towards its shareholders from the “unfriendly countries” (hereinafter – the “Foreign shareholders”), in case the total amount of dividends to be paid to the Foreign shareholders exceeds 80,000 basic units (as of today BYN 3,200,000 or ca. 920,000 euro) within a calendar year.

In case the eventual dividends towards the Foreign shareholders exceed the aforesaid threshold, a Belarusian company shall apply for a one-time clearance for payment of dividends (hereinafter – the “Clearance”) to be issued by a regional (Minsk City) executive committee. By default, the Clearance shall be issued subject to fulfillment of particular criteria by a Belarusian company, inter alia, the ones as follows:

The total amount of dividends in the ongoing calendar year does not exceed 50 percent out of the average volume of foreign direct investments into a Belarusian company for 5 previous years;
Average number of employees – at least 70 percent out of the number in the similar period of a previous year;
Absence of net losses for the previous year as well as for the ongoing reporting period;
No overdue indebtedness upon the loans granted by Belarusian banks;
No indebtedness upon taxes and other mandatory duties as well as upon payments due to a budget;
No indebtedness upon payment of salary;
Average salary in the ongoing and previous year – at least 3.5 minimum wages (as of today BYN 2 191 or ca. 630 euro).

When it comes to the residents of the Hi-Tech Park, the criterion 1 shall not be applied in case of the average salary in the ongoing and previous year being at least 11,5 minimum wages (as of today BYN 7,199 or ca. 2,070 euro).

The application on issuance of the Clearance shall be processed within 30 days. In case the Clearance is denied, then dividends shall be paid at the special account of a Foreign shareholder in Belarus, which can be used only for limited purposes.

De facto, the Resolution sets out a threshold within which dividends can be freely paid towards the Foreign shareholders – 80,000 basic units in a calendar year. The payment of dividends abroad towards the Foreign shareholders in excess of the said threshold shall be allowed only subject to obtaining the Clearance. Moreover, Belarusian companies shall file a notice to a regional (Minsk City) executive committee within 10 days from the payment of dividends to the Foreign shareholders regardless their amount.

Please also consider that the said restrictions are of a temporary nature and shall be applied until 31 December 2025.