Executive Summary

The Government of Belarus (GOB) officially welcomes foreign investment, which is seen as a source of new production technologies, jobs, and hard currency.  Belarusian authorities stress the country’s geographic location, its inclusion in the Eurasian Economic Union (which also includes Russia, Kazakhstan, Armenia, and Kyrgyzstan), extensive transport infrastructure, and a highly-skilled workforce as structural advantages for investment.  Belarus also highlights the preferential tax benefits and special investor incentives it provides for its six export-oriented and regionally-located free economic zones, the IT sector-centric High Tech Park (HTP), and the joint Belarus-China Great Stone Industrial Park.

Various laws and decrees provide the legal and regulatory framework governing investment activities in Belarus that allows for investment agreements and the following forms of investment activities in Belarus:

  • Greenfield:  establishing a legal entity (joint ventures and foreign enterprises);
  • Brownfield: property or property rights acquisition, i.e., a share in charter capital, real estate, securities, intellectual property rights, concessions, public-private partnerships, equipment, or other permanent assets.

Belarus places a priority on investments in pharmaceuticals; biotechnology; nanotechnologies and nanomaterials; metallurgy; mechanical engineering industry; production of machines, electrical equipment, home appliances and electronics; transport and related infrastructure; agriculture and food industry; information and communication technologies; creation and development of logistics systems; and tourism.

Despite its official openness to foreign investment, Belarus has not undertaken large-scale privatization of the large majority of its state-owned enterprises (SOEs) or state-owned properties.  Investments in sectors dominated by SOEs have been known to come under threat from regulatory bodies. Investors, whether Belarusian or foreign, purportedly benefit from equal legal treatment and have the same right to conduct business operations or establish new business in Belarus.  However, according to numerous sources in the local business community and independent media, the enforcement of existing laws and unwritten practices can discriminate against the private sector, including foreign investors, regardless of their country of origin. Serious concerns remain about the independence of the judicial system and its ability to objectively adjudicate cases rather than favor the powerful central government.

When considering investing in Belarus, it is also important to note that pursuant to a June 2006 Executive Order, the United States maintains targeted sanctions against nine Belarusian SOEs and 16 individuals in relation to concerns about undermining Belarus’ democratic processes.  Since October 2015, however, the U.S. Department of Treasury, in consultation and coordination with the Department of State, has provided temporary sanctions relief for the nine SOEs in consecutive six-month intervals, and in October 2018, expanded the length of temporary sanctions relief to 12 months.  The current 12-month period of temporary sanctions relief ends on October 25, 2019. For additional information click here:

Despite GOB organizations that promote foreign direct investment (FDI), both the central and local governments’ policies often reflect an old-fashioned, Soviet-style distrust of private enterprise – whether local or foreign.  Technically the legal regime for foreign investments should be no less advantageous than the domestic one, yet FDI in many key sectors is limited, particularly in the petrochemical, agricultural, and alcohol production industries.  FDI is prohibited in defense and security as well as production and distribution of narcotics, dangerous and toxic substances. FDI can also be restricted, as is the case in the following areas:

  • Investments in businesses that have a dominant position in the commodity markets of Belarus may not be allowed unless such investments are approved by the Ministry of Trade and Antimonopoly Regulation. 
  • Investments in activities and operations prohibited by law in the interests of national security (including environmental protection, historical, and cultural values), public order, morality protection, public health, and rights and freedoms of individuals.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 20178 70 of 180
World Bank’s Doing Business Report “Ease of Doing Business” 20198 37 of 190 
Global Innovation Index 20187 86 of 127126
U.S. FDI in partner country ($M USD, stock positions) 2017 N/A
World Bank GNI per capita capita 2017 $5,2980

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The GOB states attracting FDI is one of the priorities of the country’s foreign policy, and net inflows of FDI have been included in the list of government performance targets since December 2015.  The GOB also does not have any specific requirements for foreigners wishing to establish a business in Belarus. Investors, whether Belarusian or foreign, reportedly benefit from equal legal treatment and have the same right to conduct business operations in Belarus by incorporating separate legal entities.  However, the existing laws and practices often discriminate against the private sector, including foreign investors, regardless of the country of their origin.

Limits on Foreign Control and Right to Private Ownership and Establishment

The GOB asserts foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.  The GOB also states there are no general limits (statutory, de facto, or otherwise) on foreign ownership or control. In reality, however, the GOB establishes such limits on a case-by-case basis.  The limits on foreign equity participation in Belarus are above the average for the 20 countries covered by the World Bank Group’s Investing Across Borders indicators for Eastern Europe and the Central Asia region.  Belarus, in particular, limits foreign equity ownership in service industries. Sectors such as fixed-line telecommunications services, electricity transmission and distribution, and railway freight transportation are closed to foreign equity ownership.  In addition, a comparatively large number of sectors are dominated by government monopolies, including, but not limited to, those mentioned above. Those monopolies, together with the perceived difficulty of obtaining required operating licenses, make it difficult for foreign companies to invest in Belarus.  Another example is that under local law, foreign ownership cannot exceed 30 percent in charter funds of Belarusian insurance companies. Finally, the government may restrict investments in the interests of national security (including environmental protection, historical and cultural values), public order, morality protection, and public health, as well as rights and freedoms of people.

Although the GOB claims that it does not screen, review, or approve FDI, the above practices suggest the opposite.  Belarus retains elements of a Soviet-style command economy, with the President and his administration prescreening and approving all significant (multi-million dollar) foreign investment.

Belarus’ Ministry of Antimonopoly Regulation and Trade is responsible for reviewing transactions for competition-related concerns (whether domestic or international).

Other Investment Policy Reviews

The UN Conference on Trade and Development reviewed Belarus’ investment policy in 2009 and made recommendations regarding the improvement of its investment climate. 

Business Facilitation

Individuals and legal persons can apply for business registration via the web portal of the Single State Register (  ) – a resource that includes all relevant information on establishing a business.

Belarus has a regime allowing for a simplified taxation system for small and medium-sized and foreign-owned businesses.

Belarus defines enterprises as follows:

  • Micro enterprises – fewer than 15 employees;
  • Small enterprises – from 16 to 100 employees;
  • Medium-sized enterprises – from 101 to 250 employees.

Belarus’ investment promotion agency is the National Agency of Investments and Privatization (NAIP).  NAIP is tasked with representing the interests of Belarus as it seeks to attract FDI into the country.  The Agency states it is a one-stop shop with services available to all investors, including: organizing fact-finding missions to Belarus, assisting with visa formalities; providing information on investment opportunities, special regimes and benefits, state programs, and procedures necessary for making investment decisions; selecting investment projects; and providing solutions and post-project support, i.e., aftercare.

To maintain an ongoing dialogue with investors, Belarus also has the Foreign Investment Advisory Council (FIAC).  Its activities include, but are not limited to: developing proposals to improve investment legislation; participating in examining corresponding regulatory and legal acts; and approaching government agencies for the purpose of adopting, repealing or modifying the regulatory and legal acts that restrict the rights of investors.  The FIAC is chaired by the Prime Minister of Belarus and includes the heads of government agencies and other state organizations subordinate to the GOB, as well as heads of international organizations and foreign companies and corporations.

Outward Investment

The government does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.  According to government statistics, Belarusian businesses’ outward investments in 2018 totaled USD 5.67 billion.

2. Bilateral Investment Agreements and Taxation Treaties

BITs or FTAs

The GOB maintains foreign entities have the same investment opportunities as Belarusian ones.

Belarus has signed 66 bilateral investment agreements (BITs) with the following states:  Armenia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bosnia and Herzegovina, Bulgaria, Cambodia, China, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Great Britain, India (terminated 24 March, 2017), Iran, Iraq, Israel, Italy, Jordan , Democratic People’s Republic of Korea, Republic of Korea, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Libya, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Netherlands, Oman, Pakistan, Poland, Qatar, Romania, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Sudan, Sweden, Switzerland, Syria, Tajikistan, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United States, Venezuela,Vietnam, and Yemen.

Such agreements routinely provide for:  national or most-favored treatment; minimum standards; and no expropriation for reasons other than for the public benefit on a nondiscriminatory basis, according to the appropriate legal procedure, and on conditions of fair compensation.

Currently Belarus is negotiating or renegotiating BITs with several countries, including the Czech Republic, Hungary, India, Slovenia, and Sri Lanka.

Belarus is party to two regional investment agreements within the framework of the Commonwealth of Independent States (CIS):  the Agreement on Cooperation in the Field of Investment Activities of December 24, 1993, and the Convention on Protection of the Rights of the Investor of March 28, 1997.  Belarus is also a party to the Agreement on Promotion and Reciprocal Protection of Investments in the Member States of the Eurasian Economic Community of December 12, 2008 (other parties are Kazakhstan, Kyrgyzstan, Russia and Tajikistan).  Foreign investments among the members of the Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia) are governed by Annex 16 to the Treaty on the Eurasian Economic Union signed on May 29, 2014.

According to the GOB, Belarus is also a party to the following agreements:

Free Trade Agreement between the Eurasian Economic Union and its Member States, and the Socialist Republic of Vietnam; Treaty on Eurasian Economic Union; Agreement on Trade in Services and Investment in the Member States of the Common Economic Space of Belarus-Kazakhstan-Russia; Agreement on Promotion and Reciprocal Protection of Investments in the Member States of the Eurasian Economic Community; Convention on Protection of Investor Rights; Partnership and Cooperation Agreement Establishing a Partnership between the European Communities and Their Member States, of the One Part, and Belarus, of the Other Part; and The Energy Charter Treaty.

Belarus is a party to the Agreement between the Government of Republic of Belarus and the Government of the United States of America on Promotion of Capital Investment (24 June 1992).  Belarus and the United States also signed the Agreement between the Republic of Belarus and the United States of America on Stimulation and Protection of Investments (Minsk, 15 January, 1994).  That agreement did not enter into force, however.

Belarus has been a member of the Multilateral Investment Guarantee Agency (MIGA) of the World Bank since December 1992.  In July 2011, Belarus ratified amendments to the Convention on Establishing MIGA and concluded agreements on the legal protection of guaranteed foreign investment and the use of local currency.  According to Belarus’ Economy Ministry, these agreements finalized procedures for Belarus to become a full member of MIGA.

Bilateral Taxation Treaties

Belarus is the successor of the USSR in the Convention between the Union of Soviet Socialist Republics and the United States of America on Matters of Taxation (Washington, June 20, 1973).  In addition, Belarus has 65 such agreements with other countries.

7. State-Owned Enterprises

Although SOEs are outnumbered by private businesses, SOEs dominate the economy in terms of assets.  According to independent economic experts, the share of Belarus’ GDP derived from SOEs is at least 75 percent.  Belarus does not consider joint stock companies, even those with 100 percent government ownership of the stocks, to be state-owned and generally refers to them as part of the non-state sector, rendering official government statistics regarding the role of SOEs in the economy as misleading.

According to independent economic media reports, SOEs receive preferential access to government contracts, subsidized credits, and debt forgiveness.  While SOEs are generally subject to the same tax burden and tax rebate policies as their private sector competitors, private enterprises do not have the same preferential access to land and raw materials.  Since Belarus is not a WTO member, it is not a party to the Government Procurement Agreement (GPA).

Privatization Program

Belarus’ privatization program is in practice extremely limited.  There was no privatization of state-controlled companies in 2018, one SOE was bought by private investors in 2017, and there were zero companies or shares privatizatized in 2016.  In early 2019, Belarus’ State Property Committee approved a list of 23 joint stock companies for full or partially privatization in 2019.  The GOB is allowing sale of the government share in these companies on the condition that the purchasing investors preserve existing jobs and production lines. For a list of open-joint stock companies whose shares which are available for privatization, as well as a description of the asset and conditions for privatization, visit:  .

Investors interested in assets on the published privatization list are encouraged to forward a brief letter of interest to the State Property Committee.  A special commission reviews offers and makes a recommendation to the President on the process of privatization – via tender, auction, or direct sale. Investors may also send a letter of interest regarding assets that are not on the State Property Committee list and the government will examine such offers.

Additionally, the State Property Committee occasionally organizes and holds privatization auctions.  Many of the auctions organized by the State Property Committee have low demand as the government conditions privatizations with strict requirements, including preserving or creating jobs, continuing in the same line of work or production, or launching a successful business project within a limited period of time, etc.

In 2016, Belarusian joint stocks were allowed trans-border placement of their stocks via issuing depositary receipts.  However, to the Embassy’s knowledge, this instrument of attracting investments has not been put to test in Belarus.

Investment Climate Statements
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