Risk assessment
We assess the specific temporary external management risk for each company – based on the owner's nationality, the company's activity level and the current engagement of the owner in management.
Temporary External Management in Belarus
Licensed lawyers at AMBY Legal advise foreign owners of Belarusian companies on the temporary external management mechanism – assessing the risk, taking protective steps and challenging decisions where the mechanism is applied unlawfully.
Our clients
Temporary External Management – The Legal Framework
Temporary external management is a mechanism introduced in Belarus in 2022 that allows the state to appoint an external manager to run a Belarusian company owned by foreign nationals from designated unfriendly states. The mechanism was initially introduced for 18 months and has been extended to the end of 2028.
The mechanism was introduced as part of Belarus’s response to international sanctions – specifically to address the situation of Belarusian companies whose foreign owners from unfriendly states had effectively ceased to manage them following the 2022 geopolitical situation. Since its introduction, temporary external management has been applied to a number of companies across various sectors.
Understanding what triggers the mechanism, what it means for the owner, and what steps can be taken to reduce the risk or challenge the decision is essential for any foreign owner of a Belarusian company from an unfriendly state.
Who Is at Risk
The temporary external management mechanism can be applied to Belarusian companies where the owner of the company’s property is a foreign national from an unfriendly state – EU member states, the United States, the United Kingdom, Canada, Australia, Switzerland, Norway and others.
The trigger conditions are: the owner effectively ceases their involvement in the management of the company’s activity; or the owner commits economically unjustified actions which could lead to the termination of the company’s activity, liquidation or bankruptcy, or cause damage to the company.
In practice, the most common trigger is the first – the foreign owner stops engaging with the company’s management. A company whose foreign owner has moved abroad, stopped communicating with the local director, stopped participating in decisions and allowed the company to become dormant is at risk.
The mechanism does not apply to companies owned by nationals of Russia, China, CIS states or other non-restricted countries.
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Professional legal help in the field of debts collection in Belarus.
What Temporary External Management Means
When temporary external management is imposed, an external manager appointed by the state takes over management of the company. The external manager has the powers of the company’s director – they can enter into contracts, manage bank accounts, hire and dismiss employees and make operational decisions.
The foreign owner loses practical control of the company’s day-to-day operations for the duration of the external management period. They retain their ownership interest – the participatory interest or shares are not transferred – but their ability to give instructions to the company is suspended.
The external management period lasts for the duration specified in the decision imposing it. The external manager reports to the state body that appointed them. The owner can apply for the external management to be terminated if the trigger conditions no longer apply.
Our services
Protective steps advice
We advise on the specific steps most likely to reduce the risk for each company – management documentation, director arrangements, compliance maintenance.
Challenge to TEM decision
We assess the grounds for challenging a temporary external management decision and manage the economic court proceedings.
Exit coordination
We advise owners in the exit process on maintaining minimum engagement to avoid triggering the mechanism before the exit is completed.
Ongoing monitoring
We monitor regulatory developments affecting the temporary external management mechanism and keep clients informed of changes that affect their risk profile.
What Temporary External Management Means
When temporary external management is imposed, an external manager appointed by the state takes over management of the company. The external manager has the powers of the company’s director – they can enter into contracts, manage bank accounts, hire and dismiss employees and make operational decisions.
The foreign owner loses practical control of the company’s day-to-day operations for the duration of the external management period. They retain their ownership interest – the participatory interest or shares are not transferred – but their ability to give instructions to the company is suspended.
The external management period lasts for the duration specified in the decision imposing it. The external manager reports to the state body that appointed them. The owner can apply for the external management to be terminated if the trigger conditions no longer apply.
Why Clients choose us
Post-2022 expertise
We have advised foreign owners on temporary external management risk since the mechanism was introduced in 2022 – we know the trigger conditions and the practical steps that reduce the risk.
Challenge experience
We have experience challenging administrative decisions affecting foreign-owned companies in Belarus – including decisions that affect foreign owners' control of their companies.
Remote advice
We advise foreign owners entirely remotely – they do not need to travel to Belarus to manage their risk.
English-speaking
We communicate with foreign owners in English throughout.
FAQ
Which foreign owners are at risk of temporary external management?
Owners from countries designated as unfriendly by Belarus – EU member states, the United States, the United Kingdom, Canada, Australia, Switzerland, Norway, Iceland, Liechtenstein, New Zealand, Albania, Montenegro and North Macedonia. Owners from Russia, China, CIS states and other non-restricted countries are not subject to the mechanism.
What triggers temporary external management?
Two conditions: the owner effectively ceases their involvement in managing the company’s activity; or the owner commits economically unjustified actions that could lead to termination, liquidation or damage to the company. In practice, the first condition – cessation of management involvement – is the most common trigger.
Can temporary external management be applied to a company that is being liquidated?
The mechanism is intended to address companies whose owners have abandoned them – not companies that are being actively and formally liquidated. A company that has formally commenced the voluntary liquidation process – with a liquidator appointed and the liquidation registered – is in a different legal position from an abandoned company. We advise on the interaction between the liquidation process and the temporary external management risk.
How long does temporary external management last?
The duration is specified in the decision imposing it. The mechanism is currently available until the end of 2028. An owner can apply for termination of the external management if the trigger conditions no longer apply.
Can the external manager sell the company?
The external manager has broad management powers but is subject to oversight by the appointing state body. We advise on the specific powers of the external manager in each case and on the owner’s ability to challenge decisions made by the external manager.
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