On the Procedure of Creation and Activity of the Representative Offices of Foreign Companies and Organizations on the Territory of the Republic of Belarus
The Procedure of Creation
The key legal acts governing the procedure on opening and functioning of representative offices of foreign organizations (hereinafter – the “RO”) on the territory of the Republic of Belarus are Article 51-1 of the Civil Code of the Republic of Belarus (entered into force by the Law No. 7-3 dated 03.05.2001) and Regulations on the Procedure on Opening and Functioning of Representative Offices of Foreign Organizations on the Territory of the Republic of Belarus”, approved by the Resolution of the Council of Ministers of the Republic of Belarus No. 1189 dated 31.12.2013 (hereinafter - the “Regulations”).
RO of legal entities and other organizations registered under the established procedure in a foreign country, governing bodies of administrative-territorial units of foreign countries (hereinafter – “foreign organization or foreign organizations”) can be opened and carry out activities on the territory of the Republic of Belarus on the basis of permissions issued by the Ministry of Foreign Affairs (hereinafter - the “MoFA”).
In accordance with the Regulations RO can be established for the purposes of conducting activities for and on behalf of the foreign organization the name of which is indicated in the permission on opening of RO. Purposes, for which RO may be established, depends on whether the organization which opens its RO is a commercial or non-commercial one.
social support and protection of citizens, including improvement of financial state of the needies, social rehabilitation of the unemployed, the disabled and other persons who due to their physical or intellectual peculiarities, other circumstances cannot independently realize their rights and legal interests;
preparation of population for overcoming of consequences of accidents, industrial accidents, other emergency situations, disasters, natural hazards, natural or other calamities, ethnic, cultural or religious conflicts and rendering of assistance to cope with their consequences as well as providing help for the victims of repressions, refugees and forced migrants;
In addition, representation of interests of the foreign organization may be performed without opening of RO in case of negotiations conducted by the persons assigned to the Republic of Belarus.
The permission on opening of RO is issued for three years with a possible extension for equivalent three-year period.
Foreign organization interested in opening of its RO in the Republic of Belarus must submit to the MoFA a written application stating the purposes of the opening of RO and other information relating to the creation and activity of the organization.
The following documents should be attached to the application:
All the documents (mentioned above in p. 1-5) must be submitted in one of the state languages of the Republic of Belarus - Russian or Belarusian. The translation of the documents must be certified in the established order by notary or by diplomatic or consular departments of the Republic of Belarus abroad.
It is necessary to determine the location (legal address) of RO.
The following state fees are established for issuance of permission on opening of RO and a permission on extension of the operation period of RO:
*Since 01.01.2017 1 (one) basic value equals to 23 BYN (approximately 11,7 US dollars or approximately 11,2 euro).
RO is considered to be established and is eligible to conduct its activity on the territory of the Republic of Belarus from the date the permission on its opening was issued by MoFA.
RO must present documents necessary for registration to the relevant local inspection of the Ministry of Taxes and Dues of the Republic of Belarus within 10 working days. RO must also present documents to the relevant division of Belarusian State Insurance Agency “Belgosstrakh” for registration as the payer on compulsory insurance against accidents at work and occupational diseases.
Moreover, within a month term from the date the permission was issued the Head of RO should send written information on the staffing table, phone numbers and faxes of RO as well as information that the foreign organization is registered with the above-mentioned bodies to the MoFA.
The permission on opening of RO can be prolonged. For extension of duration of the permission the foreign organization should submit an application and document, verifying the payment of state fee for the extension of the permission (rates are stated above) to the MoFA no later than 10 days prior to the termination of the permission.
The activity of RO is terminated in the following cases:
2. Legal Status
In accordance with aims of activities RO may act legally for and on behalf of the foreign organization that it represents, including entering into agreements, acquiring property and personal non-property rights and fulfilling obligations, being plaintiff and defendant in court. As a rule RO enter into and execute transactions in order to ensure material, technical and informational support of the activities of RO on the territory of the Republic of Belarus. The scope of the authority of RO is established by the foreign organization which created RO taking into account the applicable laws of the Republic of Belarus.
Socially useful activities of RO should be carried out on the basis of programs and projects that correspond to the priority orientation of activities of the foreign organization, approved by this organization. Giving the grants (financial, material and other resources, granted on the competition basis) by RO outside the scope of the realized programs and projects is prohibited. According to the para. 34 Clause 52 of the Regulationa on the procedure on reciept of foreign donatations, approved by the Decree of the President No. 5 dated 31.08.2015 granting donation for the purposes prohibited by the legislation (including publishing and distribution of agitation materials, conducting of seminars and other forms of mass agitation work among population) can cause termination of the activities of the mentioned-above RO.
RO fulfills its activities in compliance with the legislation of the Republic of Belarus and within scope of authorities granted to it by foreign organization.
In order to organize the activity of RO, foreign organization may at its own discretion provide RO with property including monetary funds. Property, imported from outside the Republic of Belarus for ensuring functioning of RO, may be placed under the customs procedure for release for domestic consumption (exclusively for own needs of RO) or the customs procedure of temporary import with subsequent placement of this property under the customs procedure of re-export. The property is placed under the customs procedure of temporary import with full nominal or partial nominal exemption from payment of customs duties and taxes. There is a list of goods, being imported with full nominal exemption from payment of customs duties and taxes. 3 % of import customs duties, taxes, that could be paid if goods were placed under the customs procedure for release for domestic consumption, should be paid for usage of the property, placed under the customs procedure of temporary import with partial nominal exemption from payment of customs duties and taxes for each full and not full month of location of the property on the territory of the Republic of Belarus.
Moreover, property as well as monetary funds can be acquired by RO in the Republic of Belarus. All property and monetary funds of RO is the ownership of the foreign organization that created RO irrespective of the methods of acquiring.
RO is entitled to open dollar and ruble accounts in the banks of the Republic of Belarus. Opening of the accounts takes place after providing the bank with a number of documents the specific list of which is defined by bylaws of the bank.
Legal regime of dollar and ruble accounts of RO is established in accordance with the Regulations on currency transactions adopted by the Resolution of the Board of the National Bank of the Republic of Belarus No. 72 dated 30.04.2004 (with further changes and amendments).
Under these Regulations RO is able to open in the resident banks the following kinds of foreign currency accounts:
Transactions on the current (settlement) foreign currency account are carried out by RO without any limitations in relation to the types of transactions (including currency exchange operations connected with purchase and sale of foreign currency under the procedure established by acts of currence legislation).
RO carries out transactions over its foreign currency accounts in cashless form. RO is able to use foreign cash currency to the following aims:
Assets from the foreign currency accounts may be freely transferred abroad by RO or sold for rubles through off-exchange currency market.
The BYR accounts, opened by RO, depending on the way of coming of monetary funds and the possibility of further use of these funds are divided into the following types:
current (settlement) account of T-type;
Transactions on the current (settlement) account of T-type are carried out without any limitations in relation to the types of the transactions (including currency exchange operations connected with purchase and sale of foreign currency under the procedure established by acts of currency legislation) and as a general rule are realized in cashless form.
Foreign organization administers RO through the Head of RO appointed by the organization and who acts on the basis of the Power of Attorney issued by the organization.
In order to organize its activities RO is entitled to hire Belarusian and foreign citizens. The number of foreign citizens – employees of RO should correspond to the quantity specified in the permission on opening of RO and should not exceed 5 employees. As a general rule RO should receive a special permit for employment in Belarus for every foreign employee (except for Head of RO).
Employment in RO proceeds in accordance with labour legislation of Republic of Belarus.
Legislation of the Republic of Belarus applies to the labour agreement (contract), concluded with a foreign citizen – an employee of RO, in case the labour agreement (contract) is concluded on the territory of Republic of Belarus.
RO is entitled to conclude labour agreements (contracts) with Belarusian citizens – employees of RO.
For execution of one-time work RO may conclude civil-law contracts with Belarusian citizens, including independent-work contracts.
Taxation of RO proceeds in accordance with tax legislation of the Republic of Belarus. However, where an international agreement concluded by the Republic of Belarus provides otherwise than the Belarusian tax law, the provisions of the international agreement are adopted.
In accordance with the Tax Code of the Republic of Belarus (General Part) from 19.12.2002 with further changes and amendments, RO of foreign organization is not considered to be an independent taxpayer, but it merely performs the taxation duties of the foreign organization, which created RO in accordance with objects of taxation and in the amounts that fall on the activities of RO.
Foreign organization is not a tax resident of the Republic of Belarus and owes a duty to pay taxes only for the activities performed in the Republic of Belarus, for the income from the sources in the Republic of Belarus and for the property, located on the territory of the Republic of Belarus.
In general RO pays only compulsory payments charged on its wages fund and real estate tax, which rates are indicated below.
It should also be noted that RO is obliged to assess and withhold the income tax on the income paid to the employees of RO.
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