General rules for making a contract in Belarus

1) What mandatory elements must a contract between two residents contain?

Mandatory terms of a contract between residents include:

• a term on the subject matter of the contract;
• terms that are deemed essential or mandatory by law for the contracts of this type (for example, the commencement and completion dates of performance under a contract for work and labour, the price in a real estate sale and purchase agreement);
• terms in respect of which, at the request of one of the parties, an agreement must be reached.

The contract must clearly specify the parties that have concluded it, and the date and the place of its conclusion should be set out.

2) Is notarization or state registration required for B2B contracts?

B2B contracts between residents:

As a general rule, B2B contracts are concluded in simple written form. However, certain types of contracts may require notarial certification or state registration.

Require notarial certification:

• contracts where the parties have agreed on notarial certification;
• agreements amending or terminating notarially certified contracts;
• contracts for which notarial certification is mandatory under legislation (for example, an annuity agreement).

Require state registration:

• a real estate sale and purchase agreement, a mortgage agreement, a sale and purchase agreement of an enterprise as a property complex, and a number of other contracts involving immovable property;
• license agreements and assignment agreements of exclusive rights to inventions, utility models, industrial designs, and trademarks; pledge agreements for property rights evidenced by a certificate of a trademark; franchise agreements.

B2B contracts between a resident and a non-resident, involving currency transactions listed in the Instruction on the Registration of foreign exchange contracts, approved by Resolution of the Board of the National Bank of the Republic of Belarus dated 12.02.2021 No. 37 (hereinafter – National Bank Resolution No. 37), are subject to registration by the resident on the web portal hosted on the website of the National Bank of the Republic of Belarus (hereinafter – the National Bank web portal) in cases where the amount (estimated amount) of monetary obligations under such a contract:

• is not determined;
• equals or exceeds the amount equivalent to 4,000 basic units, which currently amounts to approximately USD 55,550.

3) What are the general requirements for the form and language of a contract between residents?

As a general rule, a contract between residents may be concluded in simple written form, except where notarial certification of the contract is required by the agreement of the parties or by legislation. Observance of the simple written form also includes the conclusion of a contract in electronic form, including with the use of a digital signature issued in Belarus, or another analogue of a handwritten signature. Certain types of contracts may require state registration (a real estate sale and purchase agreement, a mortgage agreement, an assignment agreement of an exclusive right to a trademark, a franchise agreement, etc.).

Legislation does not establish a direct requirement to the language in which a contract must be drafted. However, since the official languages in Belarus are Belarusian and Russian, Belarusian or Russian must be used in documentation and recordkeeping, as well as in interaction with state authorities, in this regard, this requirement also applies to contracts between residents.

Legislation also provides for cases where a bilingual contract is mandatory:

• a construction contract for facilities located in the territory of the Republic of Belarus with the participation of a foreign legal entity or a foreign natural person (the contract must be drafted in Belarusian or Russian and in the language of the foreign party);
• a contract for carrying out design and survey works and (or) supervision of construction, if a party to the contract is a foreign legal entity or a foreign natural person (Belarusian or Russian must be used, and with the parties’ consent – also the language of the foreign legal entity or natural person).

4) What are the consequences of non-compliance with the written form of a contract?

Non-compliance with the simple written form of a contract, concluded both between residents and between a resident and a non-resident, entails:

• the impossibility to rely on witness testimony to confirm the transaction and its terms, but written and other evidence may be used for this purpose;
• in the cases expressly established by law or by agreement of the parties, invalidation of the contract (for example, an insurance contract, an agreement on the fiduciary management of assets, etc.).

5) What specific rules apply when contracting with public authorities or state customers?

As a general rule, the conclusion of a contract with state authorities and state customers, when they acquire goods (works, services) at the expense of budgetary funds or state extra-budgetary funds, is possible only within the framework of public procurement procedures established by the Law “On public procurement of goods (works, services)”: open/closed tender, electronic auction, request-for-quotations procedure, single-source procurement procedure, exchange trading.

The public procurement procedure includes an invitation, submission of proposals, selection of the winner, and conclusion of the contract on the established terms. The procurement procedure may be declared failed if a winner cannot be determined or refuses to conclude the contract, as well as if all participants admitted to evaluation and comparison of proposals or to bidding are affiliated with the winner.

With respect to non-residents, the national regime applies (i.e. they are admitted to public procurement on equal terms with Belarusian participants), but on the basis of reciprocity: where in the foreign state of such a non-resident the same regime is established for Belarusian suppliers (contractors, performers).

With respect to residents of EAEU member states, the national regime is established in accordance with the Treaty on the Eurasian Economic Union dated 29.05.2014.

If the national regime is not established with respect to the state of a non-resident, such non-residents are admitted to participation provided that fewer than two proposals have been submitted from participants with goods originating from EAEU countries (Belarus, Russia, Kazakhstan, Armenia, Kyrgyzstan).

In certain cases, with respect to goods (works, services) originating from the Republic of Belarus and the EAEU, a preferential adjustment applies. It grants advantages to such goods (works, services) during evaluation and comparison of proposals by applying a preferential adjustment to the price of their proposal.

In addition to conducting public procurement, state authorities and state customers may also carry out procurement at the expense of their own funds. Resolution of the Council of Ministers of the Republic of Belarus dated 15.03.2012 No. 229 “On improving relations in the field of procurement of goods (works, services) at the expense of own funds” establishes a number of requirements for procurement carried out at the expense of own funds, however, such procurement is regulated by legislation to a lesser extent compared to public procurement. The issues that are not governed by legislation on procurement at the expense of own funds are determined by the customers themselves in their own local legal acts.

6) What are the requirements for performance and modification of contracts?

A contract between residents, and between residents and non-residents, may be amended:

1. by agreement of the parties;

2. by a court decision at the request of one of the parties, but only in cases of material breach of the contract by the other party and in other cases provided by the legislation of the Republic of Belarus;

3. in case of a material change of circumstances from which the parties proceeded when concluding the contract, unless otherwise provided by the contract or arises from its nature. Such amendment is effected by agreement of the parties, and if such agreement is not reached – by a court decision. A court may amend a contract due to materially changed circumstances only in exceptional cases, when termination of the contract would contradict public interests or would cause harm to the parties significantly exceeding the costs necessary for performance of the contract as amended by the court.

An agreement of the parties to amend a contract must be executed in the same form as the contract itself, unless otherwise follows from legislation or from the contract.

The parties must duly perform their obligations under the contract in accordance with the terms of the obligation and the requirements of legislation. Unilateral refusal to perform an obligation and unilateral amendment of its terms are not permitted, unless otherwise provided by legislation or the contract.

As a rule, the parties agree on the time limits, procedure, place and other terms of performance of obligations, as well as liability for their non-performance or improper performance. Otherwise, the obligation must be performed in accordance with the requirements of legislation, and in their absence – in accordance with the requirements usually imposed in such cases.

Meanwhile, currency legislation requires that contracts between a resident and a non-resident stipulate the deadlines for the fulfillment of obligations by non-residents:

• for payment of goods delivered to a non-resident, undisclosed information, exclusive rights to intellectual property objects, property rights, leased property (payment of rent and other lease-related payments), completed works, and rendered services;
• for repayment by the non-resident of advance payments in the event of non-performance or partial performance of contractual obligations by the non-resident. 

At the same time, currency legislation imposes on the resident an obligation to ensure repatriation of such monetary funds, i.e. their crediting to the resident’s accounts opened with banks in the Republic of Belarus, within the above-mentioned time limits stipulated in the contract, which may be extended for the period necessary for crediting the funds to the account. An exhaustive list of exceptions to this rule, where funds are not required to be credited to the resident’s account with a Belarusian bank, is established by Article 19 of the Law of the Republic of Belarus “On Currency Regulation and Currency Control”.

Contracts between residents and non-residents are also subject to reporting obligations regarding their performance on the National Bank web portal in cases and in the manner prescribed by legislation.

As regards the currency of performance of obligations, in contracts between residents the contractual currency must be the Belarusian ruble. However, residents may agree in their contracts that payments will be made in Belarusian rubles in an amount equivalent to a specified sum in foreign currency or in conventional monetary units. However, there is an exception to this rule, for example, in lease agreements the amount of rent and other obligations may be expressed only in Belarusian rubles, i.e. it is not permitted even to specify conditions for payment in Belarusian rubles in an amount equivalent to the sum in foreign currency.

In contracts with non-residents, the contractual currency and the currency of payment may be either Belarusian rubles or foreign currency, as determined by the parties in their contract.

7) What are the requirements regarding currency and payments in contracts with non-residents?

The legislation of the Republic of Belarus does not impose special requirements for the currency of obligations in contracts with non-residents. Obligations under such contracts may be expressed either in Belarusian rubles or in foreign currency, as determined by the parties’ agreement in the contract.

Settlements between residents and non-residents that are legal entities or individual entrepreneurs under their contracts may be carried out in non-cash form in Belarusian rubles and in foreign currency without restrictions.

In cash form, the following restrictions apply:

1. in Belarusian rubles – subject to compliance with the maximum permitted amount of cash settlements;

2. in foreign currency – prohibited, except in cases specified in paragraph 2 of Article 13 of the Law on сurrency regulation and currency control.

At the same time, residents are obliged to ensure repatriation of funds under contracts with non-residents providing for export or import.

Repatriation means the obligation of the resident to credit, within the time limits established by currency legislation, to its accounts in banks of the Republic of Belarus:

• monetary funds in fulfillment of payment obligations under export transactions;
• the amount of advance payment repayable by the non-resident to the resident in case of non-performance or partial performance of obligations under import transactions.

8) Can foreign law be chosen to govern a contract and what are the restrictions?

Parties, one of which is a non-resident, may, at the time of conclusion of a contract or subsequently, by agreement between them, choose the law governing the contract. The parties may elect either the law of the Republic of Belarus or the law of any foreign state.

If the applicable law is not determined in a contract between a resident and a non-resident, it is determined in accordance with the applicable conflict-of-law rules (Articles 1125–1127-2 of the Civil Code).

Meanwhile, there are specific exceptions where the chosen applicable law does not apply. Provisions of foreign law shall not apply if they contradict public policy or mandatory rules of the Republic of Belarus. In addition, the legal status, legal capacity, and other requirements for a non-resident legal entity are determined under the personal law of such a legal entity, and not under the law applicable to the contract.

As regards contracts between residents, the relations of the parties shall be governed by the law of the Republic of Belarus.

9) What are the requirements for registration and reporting of cross-border contracts?

Currency contracts, including foreign trade contracts, are subject to registration on the National Bank web portal if they involve a foreign exchange transaction included in the list approved by National Bank Resolution No. 37, and:

1. the amount of monetary obligations is not determined, or

2. the amount of monetary obligations equals or exceeds the amount equivalent to 4,000 basic units for legal entities and individual entrepreneurs, which currently amounts to approximately USD 55,550.

With respect to the currency (including foreign trade) contracts registered on the National Bank web portal, residents are obliged to submit information on their performance for the calendar month through the personal account on the National Bank web portal. The deadlines for such reporting are: until the 18th day of the month following the reporting month (period), or within 15 days after full performance of the contract. 

Authors: Natalia Zhuk, Yuliya Stefanovich, Alina Karchevskaya