Mikhail Khodosevich

 The Belarusian Legal Forum is holding a public discussion of the draft amendments to the Edict of the President of the Republic of Belarus No. 493 dated 16.10.2014 “On Development of Non-Cash Payments” (“Edict No. 493”). The proposed amendments provide for the reduction of the permitted amount of cash payments between legal entities (individual entrepreneurs) and individuals from 500 basic units (BYN 20,000) to 100 basic units (BYN 4,000), as well as an increase in the amount of income tax-free remuneration for non-cash payments.

On March 13, 2024 the Resolution of the Council of Ministers of the Republic of Belarus No.164 dated 07.03.2024 was published. The resolution increases a withholding tax rate and suspends certain provisions of double taxation treaties (“DTTs”) with “unfriendly” states.

As a follow-up to the previously adopted Edict No. 93 dated 14.03.2022 “On Additional Measures to Ensure Stable Functioning of the Economy” (“Edict No. 93”), the main provisions of which we have already explained, the Resolution of the Council of Ministers of the Republic of Belarus No. 27 dated 12.01.2024 “On Issuing Permits” (“Resolution No. 27”) has been published. Resolution No. 27 enters into force on 18th of January and approves the procedure for obtaining permits and paying the fee.

On 29 December 2023, the Resolution of Council of Ministers No. 713 (4) (“Resolution No. 713 (4)”) was adopted, amending the Resolutions No. 713 dated 19.10.2022 and No. 713 (2) dated 01.02.2023. Most of the amendments entered into force on 1 January 2024. Resolution No. 713 (4) introduces a new edition of the list of consumer goods with regulated prices, as well as other changes concerning the increase of sale prices, specifying sale prices for new goods and regulating the amount of incentive payments.

Draft amendments to the Tax Code of the Republic of Belarus are available on the National Legal Portal. The Tax Code 2024 introduces significant changes to tax legislation, including the establishment of progressive tax rates, changes to existing rates and tax deductions.

Resolution of the Council of Ministers of the Republic of Belarus No. 493 dated 28.07.2023 introduces amendments to a number of acts regulating the registration procedure of intellectual property objects. The changes affect, inter alia, trademarks and patents registered under the Eurasian Economic Union agreements. The main amendments enter into force on 13 November 2023.

Amendments have been published to the Instruction on the Procedure for Providing Payment Services in the Republic of Belarus approved by Resolution of the Board of the National Bank of the Republic of Belarus No. 453 dated 05.12.2022. The amendments concern the types of activities that are not recognized as payment services.

On 14 July 2023, the Regulation on the Procedure for Providing Incentive Payments enters into force. It was approved by the Resolution of the Ministry of Antimonopoly Regulation and Trade No. 39. The document regulates the procedure for provision by suppliers of incentive payments to retailers in relation to the goods subject to Resolution No. 713.

The Regulation changes rules of pricing for certain Belarusian and foreign goods, simplifies such a procedure in regard to e-commerce, regulates incentive payments made by suppliers. The new rules come effective on June 10, 2023.

On June 7, 2023 the Regulation of the Council of Ministers of the Republic of Belarus dated 03.06.2023 № 365 “On the Procedure for Constitution, Determination and Maintenance of the Lists of Goods” entered into force. The document is adopted pursuant to the Law of the Republic of Belarus dated 03.01.2023 No. 241 “On the Limitation of Exclusive Rights to Intellectual Property” and approves the Regulation on the Procedure of Constitution, Determination and Maintenance of the Lists of Goods (Groups of Goods) Essential for the Internal Market.

On 21 May 2023 the Decree of the Ministry of Health of the Republic of Belarus dated 03.05.2023 No. 69 ”On Distance Retail of Medicines“ came into force. The document lifts the previously existing ban on online trade of pharmaceuticals and sets forth requirements for sellers of such goods as well as for delivery services.

Starting from March 26, 2023, the formula for determining maximum periods of repatriation has changed.

What does revenue repatriation mean? Belarusian legislation defines repatriation as an obligation of a Belarus-based business entity to ensure that revenue under cross border export and import currency contracts is credited to their accounts in Belarusian banks. This concerns contracts which oblige residents to fulfill their obligations prior to non-residents.

On 11 April 2023, the Resolution of the Ministry of Finance No. 11 of 31 March 2023 “On Amending the Resolution of the Ministry of Finance No. 13 of 12 February 2018” will enter into force, expanding the list of cases when unilateral preparation of primary accounting documents is permitted.

On March 28, 2023 the Edict № 80 “On Certain Issues of Taxation” was adopted. It provides for extension of tax benefits until January 1, 2025 for further development of the sphere of cryptocurrency.

Resolution No. 192 of the Council of Ministers of 21 March 2023 extends the ban on export of certain categories of goods from March 23, 2023. This provision was first introduced in March 2022 and is being prolonged for the second time.

On March 23, 2023, Decision of the Minsk City Executive Committee No. 357 of February 9, 2023, came into force. It introduces significant changes to the “criteria for deterioration of the architectural appearance of buildings and development of the territory in connection with placement of outdoor advertising”.

On 3 January 2023, the Law of the Republic of Belarus No. 241 “On the Limitation of Exclusive Rights to Intellectual Property" (the Law No. 241) was adopted. The legal act is aimed to limit the intellectual property rights of copyright holders from foreign states including those committing unfriendly actions.

On 5 December 2023 the Instruction on Payment Services Provision in the Territory of the Republic of Belarus was approved by the Resolution No. 453 of the Board of the National Bank of the Republic of Belarus. It was developed following the Law of the Republic of Belarus dated April 16, 2022 No. 164-З “On Payment Systems and Payment Services”.

On August 24, 2022 the President of the Republic of Belarus signed the Edict No. 298 “On Taxation” that granted a number of privileges for business entities which relate to VAT taxation.

On March 14, 2022, on the background of the introduction of sanctions against the Republic of Belarus by some foreign states, the Edict № 93 “On Additional Measures to Ensure the Stable Functioning of the Economy” entered into force. The Edict announced a ban on alienation of shares (stocks) of Belarusian companies by foreign shareholders - residents of “unfriendly” states*.These states include EU member states, Australia, Canada, Liechtenstein, Norway, New Zealand, Albania, Iceland, Northern Macedonia, Great Britain, the United States, Montenegro, and Switzerland.

As part of the next stage of development of the Belarusian IT company, which serves foreign customers, and taking into consideration changes in the Belarusian law regarding the High-Tech Park, personal data protection and trade secrets, we developed updated forms of all key documents, including the NDA, the software development agreement, the commercial secret provision, the non-disclosure agreement with employees, and the employment contract with increased liability.

Representation of interests of a multi-brand clothing retailer from Spain on the issues of expansion into Belarus and opening of 11 stores in Minsk.

Arzinger represented the buyer in the scope of supporting the deal for acquisition of the controlling stake of a Belarusian children’s clothing retailer by a Polish company. We performed the legal DD and obtained the required consent for the transaction of the antimonopoly bodies of the Republic of Belarus.

Advising a San Francisco startup, which acts in the field of urban mobility, on compliance issues in Belarus, Azerbaijan, Kazakhstan and Ukraine, as well as in the course of a $ 3.7 billion merger with a Russian IT giant.

Advising on the issues of the procedure of pricing for drugs in the Republic of Belarus, as well as criteria of acknowledgment of an organization as having the dominating position in the market.

Representation of interests of a company in the course of implementation of the project for supply and installation of cogeneration thermal and electrical power plant with the capacity of 1.5 MW and 1.2 MW, respectively, within the scope of the World Bank financing program.

Representation of interests of a startup unicorn from Silicon Valley, which manufactures wearable devices and fitness trackers, in the course of acquisition of a Belarusian development center and admission to the High-Tech Park.

Advising on taxation issues in employment of foreign citizens, as well as on taxation of foreign organizations when performing construction activities in the Republic of Belarus.

Comprehensive support of a retailer’s entry into the market, including conclusion of a set of franchising agreements with foreign right holders. We studied all intellectual property facilities that were part of the license package, developed a franchise agreement taking into consideration the specifics of the Belarusian civil and customs law, supported the client in negotiating on the agreement with the National Center for Intellectual Property and its state registration.

Advising the largest U.S. manufacturer of fitness devices on the establishing a R&D center in Belarus, registration of commercial secrets protection, copyright for proprietary software, adaptation of employment contract forms and local acts made up according to the U.S. law, support of admission to the High-Tech Park as a resident.

Advising a German glass and optics manufacturer on the issues of concluding a framework supply agreement with a Belarusian production company.

Representation of interests of a group of optic cable manufacturer in the course of the anti-dumping investigation performed by the Domestic Market Protection Department of the Eurasian Economic Commission regarding optic fibers from the USA and Japan.

In this case, we assisted the client in acquisition of a building with the total floor area of 1,783.5 sq.m located in the historical part of Minsk.

Our functions included legal analysis of documents related to the construction of the deal facility, deal structuring and legal support in concluding and performance of the sale and purchase agreement. We also checked the compliance of the documents related to construction of the building with the specific requirements of the law of the Republic of Belarus on construction in historical parts of Minsk.

The deal structure was complicated with the fact that construction of the building had not been completed by the moment of conclusion of the sale and purchase agreement.

Legal support in conclusion of lease agreements, performance of construction works in leased shopping and office premises. The total area of offices and shops is over 20,000 sq.m.

We also were in charge of certain specific issues, for example, for ensuring return of the client’s investments in construction works in the shops and for the accounting and taxation issues associated with that.

Representation of interests of a Belarusian startup that developed the method of vestibular disorders treatment through virtual reality in the course of structuring corporate relationships and protection of intellectual property rights.

Representation of interests of a Belarusian startup engaged in manufacturing of various technological devices for industry in the course of protection of intellectual property rights in a dispute with a counterparty from the UK.

We have been acting as the exclusive legal advisor of an American health-care unicorn in Belarus since June 2014. This is a Silicon Valley startup engaged in manufacturing of fitness bracelets.

Our Corporate Law practice, M&A practice and Intellectual Property practice team supported the client in entering the Belarusian market, registered the legal entity, advised on recruitment of Belarusian and foreign employees, developed local normative legal acts, verified observing of the Belarusian law by the client, advised on the issues of leasing several offices , developed documents to protect client’s confidential information and intellectual property rights in Belarus , drafted all the required documents and contracts (mainly, the R&D Contract and the Agreement on Property Rights and Inventions), advised on the issue of benefits and incentives for the Belarusian subsidiary employees, resolved other issues (including avoidance of double taxation).

The Client decided to acquire the complex of granaries facilities under construction in Pukhovichi district of Minsk region of the Republic of Belarus. We developed two strategies for the Client to acquire the complex of granaries: purchasing shares from shareholders, which are also included into the holding company; acquisition of the complex of granaries as an asset package of real estate facilities taking into consideration the fact that most of them were still facilities under construction.

As part of implementation of the first strategy, we performed the comprehensive Due Diligence of the seller’s company, obtained the permit from the antitrust body, and drafted sale and purchase agreements for shares. The project was suspended upon the Client’s decision after revealing of risks by us.

A Belarusian footwear manufacturing holding decided to upscale the production facilities and enter the EU market. For a number of reasons (taxation, logistic, etc.), it was resolved to open a separate company for performing activities in the EU. We asvised the client on the business restructuring issues.