Foreign ownership restrictions / limitation of foreign investments and equity in corporations in Belarus

1) Are there any restrictions on foreign ownership in companies?

Yes, currently there are restrictions in place on the share of foreign investors in banking and insurance organizations. For instance, the share of foreign capital in all banking organizations operating in Belarus cannot exceed 50%, and for insurance organizations, it should not exceed 30%.

In other sectors, foreign investors have the right to establish commercial organizations in Belarus with any amount of foreign investment. This means that an investor can own either a minority stake or 100% of the shares (stocks) in the share capital.

2) Is government approval required for foreign investment in local companies?

Generally, no consent from state authorities is required to establish a company with foreign investments or to acquire shares in an existing company. The state registration procedure is of an applicant-driven nature.

However, there are some exceptions to this rule. Consent is required when investing in specific sectors such as banking and insurance activities (establishing banking or insurance organizations). Additionally, under certain conditions, approval for economic concentration from the Ministry of Antimonopoly Regulation and Trade may be required (for example, when establishing a joint venture with a major market player, a dominant entity, or a natural monopoly subject).

3) Which sectors are subject to special rules or restrictions for foreign investors?

The legislation of the Republic of Belarus does not allow investments in prohibited activities. Restrictions may be imposed based on legislative acts of the Republic of Belarus in the interests of national security (including environmental protection, historical-cultural values), public order, morality protection, population health, and the rights and freedoms of other individuals.

There are no direct prohibitions on foreign investments, but certain sectors are subject to special rules and licensing requirements, applicable to both local and foreign investors. These areas include banking and insurance activities, gambling business, activities related to the circulation of weapons, explosives, and narcotics.

4) Can foreign persons own 100% of a limited liability company or joint-stock company?

Yes, Belarusian legislation explicitly states that a company can be established by one individual or can consist of a single participant (including a foreign one). Therefore, a foreign investor can own 100% of the shares in a limited liability company (LLC) or a joint-stock company (JSC). The registration procedure for such companies does not have any particularities, except for the requirement of legalizing the submitted documents.

However, it should be noted that when registering a JSC and depositing stocks to the account of a foreign investor from an “unfriendly” state, their stocks will be restricted from trading.

5) Are beneficial ownership rules applicable to foreign participants?

Yes, they are fully applicable.

All companies registered in the Republic of Belarus, regardless of the residency of their founders, are required to comply with legislation in the field of anti-money laundering and combating the financing of terrorism (AML/CFT).

During the company registration process and throughout its activity (e.g. when opening a bank account), it is necessary to disclose information about the ultimate beneficial owners. This rule aims to ensure transparency in ownership structure and applies to all participants, including foreign ones.

6) Are there any quotas or thresholds on foreign ownership in strategic companies?

The state retains control over strategic enterprises through other mechanisms. Many key companies in sectors such as engineering, petrochemicals, and energy are state-owned. Privatization of such entities or the sale of large stakes to foreign investors is carried out based on individual decisions of the President or the Government of the Republic of Belarus. Within these decisions, specific conditions may be set for the investor, including restrictions on ownership share or retaining a “golden share” for the state, granting special management rights.

Additionally, there are restrictions on the share of foreign participation in assets with a high degree of risk (see question 1).

7) Is disclosure of foreign shareholders/participants required when registering a company?

Yes, it is required.

When registering a legal entity an application is submitted to the registering authority specifying information about all founders.

If a foreign legal entity is the founder, a legalized extract from the trade register of its country of origin confirming its legal status must be provided to the registering authority. If the founder is a foreign individual, a copy of their passport is submitted. These documents must be legalized, translated into Russian or Belarusian, and notarized.

Information about participants is entered into the Unified State Register of Legal Entities and Individual Entrepreneurs (USR), making the ownership structure of a company with foreign participation transparent to government authorities from its inception. Regarding JSCs, such information is not disclosed, but providing the documents is still a mandatory step for state registration.

8) Are there any restrictions on the acquisition of real estate by foreign legal entities?

Foreign legal entities can acquire real estate properties located on land without restrictions: buildings, structures, as well as premises within them (office, commercial, industrial, etc.). However, foreign legal entities can’t own land plots as private property. Therefore, a foreign company can acquire real estate properties, while the land plot under the building or a share in it, in the case of acquiring a premises, can only be held by the company on a lease basis (with a maximum term of 99 years).

Moreover, the current legislation requires obtaining permission from the Government of the Republic of Belarus for transactions involving the alienation of real estate by property owners of legal entities in the Republic of Belarus who are individuals (companies) from foreign states, as well as legal entities in the Republic of Belarus where the share of ownership by individuals (companies) from “unfriendly” states in the share capital amounts to 25% or more.

9) Are there any business or office localization requirements for foreign investors?

The presence of a legal address is a mandatory requirement for the state registration of a company in the Republic of Belarus. The current legislation doesn’t impose any specific restrictions on the localization of business. The main requirement is that the legal entity's location must be within the territory of the Republic of Belarus. Generally, this should be a non-residential space (exceptions are allowed for private unitary enterprises and farms).

The location of the legal entity can impact the eligibility for various tax benefits (for example, registration in rural areas or in free economic areas).

The “management center” of the company must also be situated in the Republic of Belarus. Additionally, the organization can be managed by a foreign citizen (foreign management company) while complying with legal requirements.

10) Are sanctions or other restrictions applied to investors from specific countries?

Yes, they are applied.

In response to sanctions imposed by certain states, the Republic of Belarus has implemented corresponding countermeasures against investors from “unfriendly” states.

The key restriction is that foreign investors from “unfriendly” states cannot alienate their shares (stocks) in the share capital of Belarusian companies, carry out reorganization of their companies, or withdraw from the list of participants without special permission from the Government. Additionally, restrictions are placed on dividend payouts and real estate transactions.

Authors: Kristina Panchenko, Violetta Liudchyk