Temporary restriction on payment of profits and dividends to residents of "unfriendly" countries in Belarus

30.04.2024

On 19.04.2024, the Council of Ministers of Belarus issued Resolution No. 299 "On the Application of a Special Restrictive Measure".

As of April 24, 2024, temporary restrictions have been imposed on the payment of profits and dividends to foreign participants of Belarusian legal entities - residents of "unfriendly" countries.

Criteria for applying the restriction

The amount of profit and/or dividends paid during a calendar year to all foreign participants (property owners) of a Belarusian legal entity exceeds 80 thousand BV (BYR 3.2 million)[1]. In case of payment in foreign currency, the amount is determined on the basis of the exchange rate of the National Bank of the Republic of Belarus (RB) as of the 1st day of the month in which the payment is made.

Payments when the restriction is applied

In case of the restriction for the payment of profits and/or dividends, a special authorisation is required.

Regional executive committees are authorised to issue permits. The term of consideration of an application for a permit is 30 calendar days.

A permit must be obtained for each payment of dividends and/or profits to foreign participants (property owners).

Conditions for obtaining a payment permit:

  • The amount of declared profit / dividends does not exceed 50% of the amount of direct foreign investments for 5 years (in case of activity or shareholding by a foreign participant for less than 5 years - for the whole period of activity).; *
  • Keeping at least 70% of employees in the reporting period from the number of employees in the reporting period of the previous year;
  • No net loss in the previous year and the reporting period of the current year;
  • No overdue debts as of the date of application submission on:
    • loans from banks of the RB and interest on their use
    • payment of taxes, levies (duties), penalties and other obligatory payments to the budget and extra-budgetary funds
    • budget loans (borrowings)
    • wages and other legally established benefits
  • The nominal accrued average monthly salary[2] of the company for the previous year and the reporting period of the current year is not less than 3.5 times the minimum wage established in the RB (as at 01.01.2024).*

* For Hi-Tech Park residents, when considering an application for a payment permit, the condition on the amount of foreign direct investment does not apply if the amount of nominal accrued average monthly salary for the previous year and the reporting period of the current year is not less than 11.5 times the minimum wage established in the RB.

In case of refusal to issue a permit, payment of dividends and/or profits may be made only by crediting to a bank account with a special functioning regime.

The Regulation on the functioning of such accounts was approved by Presidential Decree No. 285 dd. 13.09.2023.

Regardless of the application of the restriction, it is necessary to notify the executive committee at the place of registration of dividends / profit actually paid to foreign participants from "unfriendly" countries. The deadline for notification is no later than 10 calendar days from the date of payment. The notification form is approved by Resolution of the Council of Ministers of the RB No. 299 dd. 19.04.2024.

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[1] As at 01.01.2024, base value (BV) is BYR 40.

[2] The minimum wage as at 01.01.2024 is BYR 626.