2023 Investment Climate Statements: Belarus

Policies Towards Foreign Direct Investment 

Attracting FDI is one of the government’s stated foreign policy priorities, even as Belarus has shifted its economic priorities to focus on cooperation with Russia and the PRC.  Net inflows of FDI have been included in the list of government performance targets since December 2015.  The Lukashenka regime plans to attract a total of $5.5 billion net FDI from 2021-2025, largely through the China-Belarus “Great Stone” industrial park and Belarus’ six free economic zones.

The imposition of wide-ranging sanctions by the United States, the EU, and others, combined with legislation to legalize the seizure of private property and violate intellectual property rights, has made Belarus a less attractive destination for FDI.  So, too, have the numerous restrictions and fees placed on investments from “unfriendly countries” by the regime.

In response to the exodus of international businesses from the Belarusian market following the regime’s support for Russia’s full-scale invasion of Ukraine, in July 2022 a law entered into force which limited the rights of foreign investors from “unfriendly states,” including the United States, to sell shares of their Belarusian companies or withdraw from the country. Initially, authorities said there were 190 legal entities in Belarus subject to the new law, but in early January 2023 the list of entities was expanded to include 1,849 companies. The list has not been made public but anecdotal information indicates at least 26 of the affected businesses are owned by U.S. entities. In the second half of January 2023, laws entered into force which allowed Belarusian authorities to assume external management control of companies with non-resident shareholders for up to 18 months and provided legal grounds for the government to seize property owned by legal entities or individuals linked to “unfriendly states.”

Investors, whether Belarusian or foreign, supposedly receive legal protections and have the same right to conduct business operations in Belarus by incorporating legal entities.  However, selective application of existing laws and practices often discriminate against foreign investors.

Belarus’ investment promotion agency is the National Agency of Investments and Privatization (NAIP).  The NAIP is tasked with representing the interests of Belarus as it seeks to attract FDI and runs a 24/7 support hotline service via a Telegram channel and email account to help foreign investors address their problems and concerns in Belarus: https://investinbelarus.by/en/naip-and-what-we-do/ 

To maintain an ongoing dialogue with investors, Belarus has established the Foreign Investment Advisory Council (FIAC), chaired by the Prime Minister.  According to representatives of major foreign investors in Belarus, there were no reports of FIAC taking any meaningful effort to promote the FDI agenda in 2021 or 2022.

Limits on Foreign Control and Right to Private Ownership and Establishment 

While Belarus claims foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity, in reality the regime imposes limits on a case-by-case basis.  The limits on foreign equity participation in Belarus in terms of the size of individual investments are above average for the 20 countries covered by the World Bank Group’s Investing Across Borders indicators for Eastern Europe and the Central Asia region.

While Belarus has no formal national security investment screening mechanism, it retains significant elements of a Soviet-style command economy and screens investments through an informal and hierarchical process that escalates through the bureaucracy depending on the size of the investment or the size of incentives an investor seeks from the government.  Lukashenka and his administration review and approve multi-million-dollar foreign investments.

Additionally, 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: https://unctad.org/system/files/official-document/diaepcb200910_en.pdf 

Business Facilitation

Individuals and legal persons can apply for business registration via the web portal of the Single State Register (  http://egr.gov.by/egrn/index.jsp?language=en  ) – a resource that includes all relevant information on establishing a business and provides a single window for securing all necessary clearances and permissions from municipal authorities, tax and social security administrations, etc. Business registration normally takes no more than one day.

Belarus has a regime allowing for a simplified taxation system for all foreign-owned businesses.  Under the 2010 law on supporting small and medium-sized entrepreneurship 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.

For more on starting a business in Belarus see:  https://www.belarus.by/en/business/companies  

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 2022 totaled USD 6.29 billion, of which FDI was USD 5.19 billion.  The Government of Belarus (GOB) classified investment data following this period and no further investment information is publicly available.

Bilateral Taxation Treaties

Belarus is covered as a successor state 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) to prevent double taxation of U.S. investors.  In addition, Belarus has signed 71 such tax agreements with other countries. In March 2022, the Lukashenka regime introduced legislation which suspended implementation with “unfriendly states” of bilateral agreements to prevent double taxation; In February 2023, Ukraine terminated its agreement to prevent double taxation with Belarus.

In October 2022, Belarus and Russia signed an agreement to harmonize their respective taxation laws in a move focused primarily on value-added tax (VAT) and excise duties as part of the so-called “Union State.”  As of January 2023, data concerning all VAT payers in Belarus is collected and stored in a joint Union State system which Russia controls.

Transparency of the Regulatory System 

According to Belarusian law, drafts of laws and regulations pertaining to investment and doing business are subject to public discussion, though authorities rarely pay heed to public views and most laws regarding foreign direct investment introduced during the last year were either aimed at preventing the outflow of foreign investment or punitive in nature.  The government officially claims its policies are transparent, and that the implementation of laws is consistent with international norms to foster competition and establish clear rules of the road.  However, independent economic experts note that private sector businesses are often discriminated against in favor of public sector businesses controlled by individuals close to the Lukashenka family.

International Financial Reporting Standards (IFRS) have been a part of Belarus’ legislative framework since 2016.  Public-interest entities, which include banks, insurance companies, and public corporations with subsidiary companies, are required to publish their financial statements, which comply with the IFRS. Such statements are subject to statutory audit. The IFRS in Belarus can be accessed at https://www.minfin.gov.by/ru/accounting/inter_standards/docs/ 

International Regulatory Considerations

Belarus’ Ministry of Finance posts regular updates and information on budgetary policy, public finances, and debt obligations on its website: http://www.minfin.gov.by/en/budgetary_policy/  and http://www.minfin.gov.by/en/public_debt/ .

Belarus applied to join the WTO in 1993. On March 24, 2022, the WTO announced it had suspended Belarus’ application due to the GOB’s support for the Russian invasion of Ukraine.

Belarus is a member of the Eurasian Economic Union (EAEU); EAEU regulations and decisions supersede the national regulatory system.

Competition and Antitrust Laws 

Issued in 2016, Presidential decree number 188 authorizes the Ministry of Antimonopoly Regulation and Trade to counteract monopolistic activities and promote market competition.

Expropriation and Compensation 

According to Article 12 of the Law of the Republic of Belarus on Investments, property created as a result of investment may not be gratuitously nationalized or requisitioned. Nationalization of property is only permissible by public necessity, the law says, and property holders are entitled to timely and full compensation of the value of the nationalized property and other damages being caused by the nationalization. Belarus has signed 70 bilateral agreements on the mutual protection and encouragement of investments which include obligations regarding expropriation.  In 2022, there were no nationally-reported cases of nationalization or instances of confiscation of business property as a penalty for violations of law.

However, in addition to the aforementioned legislation to prohibit the withdrawal of assets from Belarus and assume management of foreign-held companies, a law entered into force in January 2023 which provides for the seizure of property of entities or individuals linked with “unfriendly” states, including the United States. The property that can be seized includes monetary funds, securities, and other property, including property rights in Belarus, owned by the subjects of seizure.

Dispute Settlement 

The Lukashenka regime’s actions to repress virtually every element of Belarusian society indicate the government is prepared to violate its commitments under international agreements and domestic law. However, Belarus is party to the following dispute resolution mechanisms.

ICSID Convention and New York Convention

Belarus is party to both the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) and the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, meaning that local courts recognize and enforce foreign arbitral awards in compliance with the above conventions, national laws, and regulations.  The enforcement of arbitral awards in Belarus is governed by Chapter 28 of the Code of Commercial Procedure.

Investor-State Dispute Settlement

Belarus and the United States signed a Bilateral Investment Treaty (BIT) in 1994 but it was never ratified and is not in force.

Belarus has two pending investment arbitration claims initiated by an investor from Lithuania in 2021, and by an investor from Russia in 2018.

International Commercial Arbitration and Foreign Courts

Judgments of foreign courts are accepted and enforced if there is a relevant international agreement signed by Belarus.  Courts recognize and enforce foreign arbitral awards.  The Belarusian Chamber of Commerce and Industry has an International Arbitration Court.  The 2013 “Law on Mediation,” as well as codes of civil and economic procedures, established various alternative ways of addressing investment disputes.

Bankruptcy Regulations

Belarus’ 2012 bankruptcy law, related presidential edicts, and government resolutions are not always consistently applied.  Additional legal acts, such as the Civil Code and Code of Economic Procedures, also include certain regulations on bankruptcy-related issues.  Under the bankruptcy law, foreign creditors have the same rights as Belarusian creditors.  Belarusian law criminalizes false and intentional insolvency as well as concealing insolvency.  According to the World Bank’s 2020 Doing Business Index, Belarus was ranked 74 in Resolving Insolvency (rankings available at https://archive.doingbusiness.org/en/data/exploreeconomies/belarus 

Investment Incentives 

According to the GOB, priority sectors for FDI include pharmaceuticals, biotechnology, nanotechnologies and nanomaterials, high technologies, new materials, petrochemical and chemical industries, mechanical engineering and production of machines and equipment, transport and transportation infrastructure, civil engineering, production of construction materials, agriculture, food industry, tourism, and information and communication technologies. Potential investors should be aware, however, that following the February 2022 Russian invasion of Ukraine, independent Belarusian media claims approximately one-half of all IT workers in Belarus have left the country.  Industry insiders expect the outflow of tech workers to continue.

The NAIP maintains a database of investment proposals at  https://map.investinbelarus.by/en/investbase/offers/ 

The GOB offers various incentives and programs for FDI depending on the sector and region.  If an investor enters into a specific investment agreement with the GOB, the agreement may accord preferential incentives and benefits including but not limited to:

• Allocation of a land plot without auctioning the right to lease it;
• Removal of vegetation without compensation during construction;
• Full VAT deduction for the purchase of goods, services (works), or property rights;
• Exemption from import tariffs and VAT on the imports of production equipment;
• Exemption from fees for the right to conclude a land lease;
• Exemption from duties for employing foreign nationals;
• Exemption from compensation for losses sustained by the agriculture and/or forestry industries due to the use of a land plot under the investment agreement;
• Exemption from land tax on land plots in government or private ownership, and from rent on land plots in government ownership, for a period starting from the first day of the month in which the investment agreement came into effect until December 31 of the year following the year in which the last of the facilities scheduled under the investment agreement started operations.
• In 2022 the Investment Law was amended to include a clause on providing investors who have concluded an investment agreement in Belarus with a guarantee against adverse changes in tax legislation.

Investment agreements concluded by the Belarusian Council of Ministers and with the permission of the President of Belarus may offer additional incentives and benefits not expressly provided for in legislation. Such incentives are provided on a case-by-case basis.  In addition, preferential treatment is offered via a number of options described in detail in the “investor roadmap” at the following link: https://map.investinbelarus.by/en/preferential-treatments/  

In 2022, Belarus did not develop or introduce any incentives for investment in green energy production or distribution.

Foreign Trade Zones/Free Ports/Trade Facilitation 

Each of Belarus’ six regions has its own free economic zone (FEZ): Minsk, Brest, Gomel-Raton, Mogilev, Grodno Invest, and Vitebsk.  The tax and regulatory pattern applicable to businesses in these zones is simpler and lower than elsewhere in Belarus.  To become a FEZ resident, an investor needs to make a minimal investment of EUR 1 million, or at least EUR 500,000, provided the entire sum is invested during a three-year period, as well as engage in the production of import-substituting products or goods for export.

In 2005, Lukashenka signed the edict that established uniform rules for all FEZs.  The list of main tax benefits for FEZ residents was revised in 2016 to include certain exemptions from the corporate profit tax (CPT), real estate tax, land tax, and rent on government-owned land plots located within the boundaries of the FEZ, among others.  As of 2017, FEZ residents benefit from a simplified procedure of export-import operations.  Resident enterprises are exempt from customs duties and taxes on facilities, construction materials, other equipment used in implementation of their investment projects.  They are also exempt from customs duties and taxes on raw materials and inputs to the process of manufacture of the products sold outside the territory of the Eurasian Economic Union.  Otherwise, FEZ residents pay VAT, excise duties, ecological tax, natural resource extraction tax, state duty, patent duties, offshore duty, stamp duty, customs duties and fees, local taxes and duties, and contributions to the Social Security Fund according to the general guidelines. For more details please visit:

• FEZ Minsk: https://www.fezminsk.by/en/
• FEZ Gomel: http://www.gomelraton.com/en/
• FEZ Vitebsk:  http://www.fez-vitebsk.com/en/
• FEZ Brest:  http://fezbrest.com/en/
• FEZ Mogilev:  http://www.fezmogilev.by/
• FEZ GrondoInvest:  https://grodnoinvest.by/en/

Employing three percent of Belarus total workforce in 2022, Belarus’ six FEZs attracted 25 percent of all FDI, accounted for 22 percent of total exports, generated 18 percent of all industrial production, and contributed 5.6 percent of the country’s GDP.

Created in 2005 to foster development of the IT and software industry, the High Technology Park (Hi-Tech Park or HTP) is a “virtual” legal regime that extends over the entire territory of Belarus.  A physical campus of the HTP is found in the eastern part of Minsk and a satellite campus is located in Hrodna. The legislation behind the HTP was updated in 2017 with the signing of Presidential Decree No. 8 “On the Development of the Digital Economy.”  The decree extended the HTP preferences from 2022 until 2049 and expanded the list of business activities in which HTP residents may engage, including but not limited to software development; data processing; cryptocurrency and token-related activity; data center services; development and deployment of Internet-of-Things technologies; ICT education; and cybersports.

The HTP provides residents with beneficial tax preferences, including but not limited to exemptions from VAT and CPT on sale of goods or services; exemptions from customs duty and VAT on certain kinds of equipment imported into Belarus for use in investment projects; and immovable property tax and land tax benefits with regard to buildings and land within the boundaries of the HTP campuses. Following continued human rights abuses by Belarusian authorities in response to the protests and the February 2022 Russian invasion of Ukraine, independent Belarusian media claims approximately one-half of all IT professionals have relocated outside of Belarus. Lukashenka has repeatedly referred to the HTP as a destabilizing element of the Belarusian economy, which, in his estimation, does not adequately contribute to Belarus’ wellbeing and prosperity.  Industry insiders expect the outflow to continue as the government continues its repressive tactics and as Western sanctions make doing business with international partners more difficult.

Foreign nationals who are hired on contract by an HTP resident company, who are founders of a HTP resident company, or who are employed by such founders are eligible for visa-free entry into Belarus for a stay of up to 180 days per year.  Foreigners employed by HTP residents are not required to have working permit in Belarus and are entitled to apply for a temporary residence permit for the duration of their contract.

For more information on HTP, please visit:  http://www.park.by/ 

The Great Stone Industrial Park is a special economic zone of approximately 112.5 square kilometers located adjacent to the Minsk National Airport.  Before the launch of Western sanctions against Belarus and the start of Russia’s invasion of Ukraine, Great Stone resident companies had access to Lithuania’s Klaipeda seaport on the Baltic Sea.  According to a master plan approved in 2013, Great Stone was planned to eventually include production facilities, dormitories and residential areas for workers, offices and shopping malls, and financial and research centers.  Great Stone is primarily a Belarus-PRC joint venture, but any company – regardless of its country of origin – can apply to join the industrial park.  Interested companies must submit either a business project worth at least USD 500,000, to be invested within three years from the moment of the business’ registration; submit a business project worth at least USD 5 million without any time limit for investment; or submit a business project worth at least USD 500,000 tied to research and development.

As of 2020, Great Stone residents received, among other preferences, certain exemptions on income tax, real estate and land taxes, and dividend income; the right to import goods, including raw materials, under a preferential customs regime; full VAT repayment on goods used for the design, building, and equipment of facilities in Great Stone; exemptions from environmental compensatory payments; and a preferential entry/exit program allowing Great Stone residents and their employees to stay in Belarus without a visa for up to 180 days.  Great Stone residents are also exempt from any new taxes or fees through 2027 should the government make adverse changes to the tax code.  Great Stone residents are permitted to purchase land in the zone whereas foreign land ownership in the rest of Belarus is highly restricted.  The special preferential legal regime of Great Stone will be valid until 2062.  The list of priorities planned for implementation in the park include projects in electronics, biomedicine, chemistry, and mechanical engineering.

Following the start of the war in Ukraine in late February 2022, several residents of Great Stone have terminated their operations in the special economic zone and departed Belarus.

For more information on Great Stone, please visit https://en.industrialpark.by

Small and medium-sized cities and rural areas in Belarus are defined by a 2012 presidential decree as settlements with populations under 60,000.  Individual entrepreneurs and legal entities working in rural settlements of less than 2,000 people receive additional tax benefits and exemptions.

Since 2012, companies and individual entrepreneurs operating in all rural areas and towns enjoy the following benefits in the first seven years after registration: exemption from profit tax on the sale of goods, work, and services of a company’s own production; exemption from other taxes and duties, except for VAT, excise tax, offshore duty, land tax, ecological tax, natural resources tax, customs duties and fees, state duties, patent duties, and stamp duty; exemption from mandatory sale of foreign currency received from sale of goods, work, and services of a company’s own production, and from leasing property; no restrictions on insuring risks with foreign insurers; exemption from import tariffs on certain goods brought into Belarus that contribute to the charter fund of a newly established business.  The special legal regime does not apply to banks, insurance companies, investment funds, professional participants in the securities market, businesses operating under other preferential legal regimes (e.g. FEZ or HTP), and certain other businesses.

Performance and Data Localization Requirements 

The GOB does not mandate local employment.  Foreign investors have the right to invite foreign citizens and stateless persons, including those without permanent residence permits, to work in Belarus provided their labor contracts comply with Belarusian law.  The GOB often imposes various conditions on permission to invest and pursues localization policies.  Other performance requirements are often applied uniformly to both domestic and foreign investors.

According to official Belarusian sources, licenses are not required for data storage.  Law enforcement regulations governing electronic communications do not include any requirements specifically for foreign internet service providers.  Beginning in 2016, internet service providers are required by law to maintain all electronic communications for a one-year period.

In October 2022, Lukashenka signed a decree entitled “On the interaction of telecommunication operators, telecommunication service providers and owners of Internet resources with bodies carrying out operational-search activities.” The decree obliges owners of internet infrastructure and resources to provide Belarusian security services with access to users’ information upon request.

Real Property 

Property rights are enforced by the Civil Code.  Mortgages and liens are available, and the property registry system is reliable.  Investors and/or duly established commercial organizations with the participation of a foreign investor (investors) have the right to rent plots of land for up to 99 years. According to the Belarusian Land Code, foreign legal persons and individuals are denied land ownership except for land in the Great Stone Industrial Park, which foreign persons can acquire.  The 2020 World Bank Doing Business Report ranked Belarus 14th on ease of property registration https://archive.doingbusiness.org/en/data/exploreeconomies/belarus

Real estate is subject to the January 2023, law “On Seizure of Property” which provides for the state to take ownership of property belonging to entities or individuals from or associated with “unfriendly” states, including the United States.

Intellectual Property Rights 

In January 2023, the new law “On the Limitation of Exclusive Rights to Intellectual Property” came into force. This law allows for the importation of goods containing IP into Belarus, where they can be placed on the market or exported without the consent of foreign rights holders, provided that such goods are included in a special list of goods deemed essential for the domestic market. The law also provides a legal basis for the use of a number of IP objects (such as software, audiovisual works, musical works, media programing) without the consent of right holders or collective management organizations (CMO) that are based in countries designated by the regime as “unfriendly.”

Belarus’s National Center of Intellectual Property (NCIP)  collects royalties on this unlicensed use of copyrighted works and is instructed to store this remuneration for three years on behalf of the right holder or CMO. After this period, however, the royalties from unlicensed use of copyrighted works not demanded by the right holder or CMO can be transferred to Belarus’ national budget. As a result of this legislation, in 2023 Belarus was placed back on the USTR Special 301 Report Watch List after having been removed from the list in 2016.

In July 2021, the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs of July 2, 1999 (the Geneva Act) came into effect in Belarus and the country became the 66th member state to accede to the Geneva Act and became the 75th member of the Hague Union.  In November 2021, Belarus adopted an IPR strategy through 2030 defining significant aspects of the country’s IPR system that needed to be strengthened.  In December 2021, Belarus acceded to the Industrial Design Protection Protocol to the September 9, 1994 Eurasian Patent Convention.  The accession is set to come into effect in April 2022.

Belarus is a member of the World Intellectual Property Organization (WIPO) and party to the Bern Convention, the Paris Convention, the Patent Cooperation Treaty (PCT), the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty, among others. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at https://www.wipo.int/directory/en/.

In March 2022, the European Patent Office paused its cooperation with the Russian and Belarusian patent agencies, as well as the Eurasian Patent Organization. The United States Patent and Trademark Office (USPTO) has terminated engagement with officials from the national intellectual property office of Belarus, and with the Eurasian Patent Organization.

Capital Markets and Portfolio Investment 

The Belarusian government officially claims to welcome portfolio investment.  There have been no reports in 2021 on any impediments to such investment.  In 2019 and 2020, Belarus received $500 million and $1.34 billion worth of portfolio investments, respectively. The Belarusian Currency and Stock Exchange is open to foreign investors, but it is still largely undeveloped because the government only allows companies to trade stocks if they meet certain, and often burdensome, criteria.  Private companies must be profitable and have net assets of at least EUR 1 million.  In addition, any income from resulting operations is taxed at 24 percent. Finally, the state owns more than 70 percent of all stocks in the country, and the government is unwilling to trade them freely.  Bonds are the predominant financial instrument on Belarus’ corporate securities market.

In 2001, Belarus joined Article VIII of the IMF’s Articles of Agreement, undertaking to refrain from restrictions on payments and transfers under current international transactions.  Loans are allocated on market terms and are available to foreign investors.

Businesses buy and sell foreign exchange at the Belarusian Currency and Stock Exchange through their banks.  Belarus used to require businesses to sell 10-20 percent of foreign currency revenues through the Belarusian Currency and Stock Exchange; however, in late 2018 the National Bank abolished the mandatory sale rule.

Resources for Rights Holders 

The Belarus Affairs Unit at U.S. Embassy Vilnius, Economic Section
Telephone: +370 (5) 266-5500
E-mail:   usembassyminsk@state.gov

Money and Banking System 

Sanctions imposed by the United States have prohibited any commercial activity with some Belarusian banks, including Dabrabyt Bank and Belinvestbank.  Belarusian subsidiaries of sanctioned Russian banks are also under sanctions and include Bel/VEB, VTB Bank Belarus, and Sberbank Belarus.  Potential investors should review the Department of Treasury website at https://home.treasury.gov/ for updates as trade restrictions on Belarusian banks continue to develop.

Sanctions introduced by the EU prohibit contact with the National Bank of Belarus and have blocked access to the SWIFT secure messaging system for a number of banks, including Dabrabyt Bank, the Development Bank of Belarus, and Belagroprombank.  Potential investors should review the website of the European Commission for updates and further details at https://ec.europa.eu/info/index_en

In 2022, Lukashenka decreed that all foreign debt, including Eurobonds and other financial instruments, would be paid in Belarusian rubles for the foreseeable future. This resulted in a technical default, and by mid-2022 international ratings services had downgraded Belarus’ debt rating to “in default.”

Belarus has a central banking system led by the National Bank of the Republic of Belarus, which represents the interest of the state and is the main regulator of the country’s banking system.  The president of Belarus appoints the chair and members of the Board of the National Bank, designates auditing organizations to examine its activities, and approves its annual report.  Although the National Bank officially operates independently from the government, there is a history of government interference in monetary and exchange rate policies.

In February 2021, the banking system of Belarus included 23 commercial banks and three non-banking credit and finance organizations.  According to the National Bank, the share of non-performing loans in the banking sector was 5.3 percent as of January 1, 2022.  At the beginning of 2022, the country’s six largest commercial banks of systemic importance, all of which have some government share, accounted for 85 percent of the approximately 92.3 billion Belarusian rubles in total assets across the country’s banking sector.  There are five representative offices of foreign banks in Belarus, with the PRC’s Development Bank opening most recently in 2018.  Regular banking services are widely available to customers regardless of national origin.

Belarusian law does not allow foreign banks to establish branches in Belarus.  Belarusian subsidiaries of foreign banks are allowed to operate in the country and are subject to prudential measures and other regulations like any Belarusian bank.  The U.S. Embassy is not aware of Belarus losing any correspondent banking relationships in the past three years.  Foreign nationals are allowed to establish a bank account in Belarus without establishing residency status.

According to the IMF, Belarus’ state-dominated financial sector faces deep domestic structural problems and external sector challenges.  Domestic structural problems include heavy state involvement in the banking and corporate sector, the lack of hard budget constraints for SOEs given state support, and high dollarization.  Externally, Belarus’ economy remains exposed to spillovers from the Russian economy and Belarus’ foreign currency reserves offer a limited buffer to potential external shocks.  The banking sector remains vulnerable to external shocks, given the high level of dollarization and the exposure to government and SOE debt.

Foreign Exchange and Remittances 

Foreign Exchange 

Since 2015, the Belarusian Currency and Stock Exchange (BCSE) has traded the U.S. dollar, the euro, and the Russian ruble in a continuous double auction regime.  In March 2022, the exchange introduced limited trading of the Chinese yuan in response to Western sanctions and Belarus’ inability to pay for transactions with foreign partners in hard currency.  A year later, in March 2023, trading in yuan made up roughly 15 percent of all exchanges. Local banks submit bids for buying and selling foreign currency into the trading system during the entire trading session.  The bids are honored if and when the specified exchange rates are met.  Since December 2022 the National Bank has used the average weighted exchange rate of the U.S. dollar, the Chinese yuan, and the Russian ruble set during the trading session to set official exchange rates from the day on which the trades are made.  The cross rates versus other foreign currencies are calculated based on the data provided by other countries’ central banks or information from Reuters and Bloomberg.  The stated quote becomes effective on the next calendar day and is valid until the new official exchange rate comes into force.  The IMF lists Belarus’ exchange rate regime in the floating exchange rate category.

Remittance Policies

Sanctions have made it increasingly difficult to transfer money electronically to and from Belarus as many banks outside of the country have chosen not to do business with the Belarusian banking system.  Many Belarusian banks have imposed strict limits on the withdrawal of foreign currency.

Sovereign Wealth Funds 

Belarus does not have a Sovereign Wealth Fund.  The GOB manages the State Budget Fund of National Development, which supports major economic and social projects in the country.

Privatization Program 

The GOB officially claims to welcome “strategic investors,” including foreign investors, and says that any state-owned or state-controlled enterprise can be privatized.  However, Belarus’ privatization program is extremely limited in practice as the government only sells enterprises which operate at a loss and in which the state holds a minority share of less than 25 percent.  Lukashenka has expressed skepticism of privatization, and during the All-Belarusian People’s Assembly in February 2021 he claimed privatization in Belarus was only in the interests of his political opposition.

Notably, in April 2020, the government sold its controlling share in Belarus’ fifteenth-largest bank, Paritetbank.  Otherwise, there was no privatization of state-controlled companies from 2018 to 2020.  The State Property Committee announced in early 2021 that it had no plans for mass privatization in Belarus in 2021.  For a list of open-joint stock companies whose shares are available for privatization, as well as a description of the assets and conditions for privatization, visit  http://gki.gov.by/en/inf_for_investors-ifi_on_priv/.

The extensive sanctions on Belarus and the potential for greater Belarusian involvement in the Russian invasion of Ukraine make the economic situation in Belarus unpredictable.

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 often places strict requirements on privatizations, including preserving or creating jobs, continuing in the same line of work or production, or launching a successful business project within a limited timeframe.

In 2016, Belarusian joint stocks were allowed trans-border placement via issuing depositary receipts, but to date this instrument of attracting investments has not been used in Belarus.
 

Climate Issues 

While Belarus officially recognizes the need to develop and implement environmentally friendly economic policies, no significant action was taken by the GOB in 2022.