Open a representative office in Belarus
Any foreign company has the right to carry out its activities on the territory of the Republic of Belarus either by registering a company in Belarus or by opening a representative office.
The purpose of opening a representative office of a foreign company is to represent and protect the interests of the company, study the market and investment opportunities, support clients, as well as perform other functions not related to business and insurance activities.
Legal status of a representative office
A representative office is not an independent company and does not have the status of a resident of the Republic of Belarus, but it is a separate subdivision of a foreign company located in Belarus.
The procedure for opening a representative office in Belarus is regulated by the Civil Code of the Republic of Belarus and the Regulations approved by the Council of Ministers of the Republic of Belarus №408 of 30.05.2018.
Taxation of a representative office
In the Republic of Belarus, the taxation of representative offices is carried out in accordance with the current national legislation, however, if there are other taxation rules in accordance with international agreements, these norms are applied.
A representative office is not recognized as an independent taxpayer, and a foreign company is taxed only on activities carried out in the Republic of Belarus, income received in Belarus and on property located on the territory of the republic.
Taxes paid by the representative office:
- contributions to the Fund for Social Protection of the Population (SPF);
- property tax.
Representation of a commercial organization
A representative office of a commercial foreign company may be opened only for the purpose of carrying out auxiliary activities, such as:
- conclusion and assistance in conclusion of international treaties;
- exchange of various information;
- market research and investment environment;
- other useful activity.
Representation of a non-profit organization
The goals of the activities of representative offices of non-profit organizations are: support and protection of citizens in various life circumstances, accidents, catastrophes, natural disasters, conflicts and assistance in overcoming the consequences; assistance in the areas of education, sports, healthy lifestyle; the institution of family, motherhood, fatherhood and childhood; protection of animals, protection of the environment and historical and cultural values; as well as other socially useful activities.
The functions performed by the representative office are limited by law and are the main difference between the representative office and the initial company.
The functions of the representative office are consistent with the goals of opening this representative office. For example, a representative office opened by a commercial organization performs auxiliary functions in concluding contracts, studying the sales market, negotiating, a part of the functions of the parent organization not related to entrepreneurial activity.
The procedure for opening a representative office in Belarus
The opening of a representative office is carried out according to the following algorithm:
- determination of the location of the representative office (when choosing the location and registering a representative office in Belarus, it is necessary to take into account the fact that a change of address will entail the need to approve a new regulation on the representative office, as well as the replacement of the tax inspection body and the Social Protection Fund, if the new address is located in another area);
- development and approval of the regulation on the representative office is mandatory for the registration of a representative office in Belarus. The regulation is developed and approved by the authorized body of the foreign organization;
- obtaining an authority from the foreign company to register a representative office (issued to the head or another person indicating all competence, and when it is drawn up in a foreign language, it must be translated into one of the state languages: Belarusian or Russian, certified in accordance with the established procedure);
- payment of state fees;
- registration of a representative office in the relevant executive committee;
- Registration of a representative office with tax authorities, Belgosstrakh, registration with the Social Security Fund.
- Opening a representative office account in a Belarusian bank (opening a bank account is mandatory for a representative office. The list of documents required to open an account may differ depending on the bank, but, as a rule, coincides with the list of documents required for registration with government agencies).
- Sending information to the registering authority (registration with all state bodies, as well as opening a bank account must be made no later than a month after the issuance of permission to open a representative office. At the same time, information on registration, opening bank account, contact details of the representative office and opening hours).
Government bodies, which can issue permits to open representative offices
Since September 2018, permits to open a representative office are issued by the executive committees: regional and Minsk city (determined by the place of the location of the representative office).
The basis for opening a representative office is the issued permit.
The list of documents required for registration of a representative office can be found on the websites of the executive committees and includes:
- an application for registration in the prescribed form, signed by an authorized person;
- confirmation of the legal status of the organization (extract from the labour register, etc.);
- provision on the establishment of a representative office;
- authority for the right to register a representative office;
- confirmation of payment of the state fee;
- non-profit organizations are also required to provide an action plan and goals for opening a representative office.
All documents drawn up in a foreign language must be translated into Russian or Belarusian, certified and legalized.
Terms of consideration of documents
Consideration of documents and adoption of a decision on the issue of opening a representative office is carried out within a period of 30 days or 2 months (if additional requests are sent to other government agencies).
The amount of the state fee depends on what kind of organization, commercial or non-commercial, opens a representative office.
For the first case - 65 base values, for the second - 20 base values for each year of the permit.
Period of validity of permission to open a representative office
The permission to open a representative office is issued for a period of 3 years. The national tax is paid all at once when applying to the executive committee for issuing permission to open a representative office.
The validity period of the permit can also be extended for 3 years.
Reasons for refusal to issue a permit to open a representative office
The reasons entailing a refusal to issue a permit include:
- Submission of expired documents (as a rule, such an error occurs when an extract from the trade register is provided, since its validity period is 3 months).
- Failure to comply with the content of information mandatory for the regulation on the representation: goals, location, structure, competence of the head, the procedure for terminating activities.
- Errors in the competence: design errors (lack of apostille, certification, legalization) and inconsistency of the authority with other legal documents.
- Errors in defining the goals of the representative office: the objectives specified in the regulations on the representative office must comply with the current legislation.
- Opening of a representative office by an organization that already has a representative office on the territory of the Republic of Belarus.
Extension of the permit to open a representative office
A foreign organization intending to extend the registration period of a representative office is obliged to apply to the executive committee within the period from 3 months till 30 days before the expiry of the permit, providing the necessary documents.
The list of documents is similar to the list for registration of a representative office.
The national tax is paid for three years of the permit.
Termination of the activity of the representative office
The decision of a foreign company to terminate the activities of a representative office is submitted to the executive committee.
Also, the activity of a representative office may be terminated by the decision of the executive committee under the following circumstances: termination of activity and liquidation of a foreign company; non-compliance with the requirements of the legislation on the activity goals of the representative office, the number of foreign employees and non-elimination of violations within the period established by the executive committee; expiration of the permit (if it is not renewed) and expiration of the international agreement on the basis of which the representative office was opened; when the executive committee receives a request from a state body to terminate the activities of the representative office; recognition of the activities of the representative office as extremist.
The Executive Committee sends a notice of termination of activity to the last known address of the representative office.
A foreign company, whose representative office stops operating on the territory of the Republic of Belarus, fulfills all obligations to state bodies and notifies the executive committee about it.
Information about the termination of the representative office is posted on the official website of the executive committee.
Photo: static.360tv.ru, yur-gazeta.ru