Exit of Foreign Businesses from Belarus

In recent years, Belarus has witnessed a large-scale exodus of foreign companies across various sectors of the economy. As a result, major international brands and technology companies — including Raiffeisen, Danone, Unilever, Skywind, Playtika, Check Point, and others — have either ceased operations or are leaving the market due to increasingly complex business conditions.

Many companies have closed their offices and relocated operations to avoid the consequences of sanctions, transaction issues, and a deteriorating legal environment.

The government has introduced mechanisms to regulate the exit of investors from Belarus: in some cases, government approval and an additional fee of up to 25% of the transaction amount are required. At the same time, officials claim there has been minimal investor loss, arguing that only a few companies are leaving.

Under these circumstances, foreign businesses are often forced to choose between continuing operations in Belarus, selling assets with government approval, or exiting the market entirely. In this article, we explore the main exit strategies and provide recommendations for foreign investors.

Main Forms of Market Exit

Foreign companies deciding to leave the Belarusian market face the need to choose an appropriate exit strategy. Each form has its own advantages, limitations, and consequences. Below are the key scenarios commonly used in practice. We recommend consulting our experienced lawyers to select the optimal strategy.

Sale of Shares or Assets to Local Partners

This is one of the most common and formally “quick” exit methods — transferring the business to a Belarusian legal entity or individual. However, the procedure has become significantly more complicated in recent years:

• The need to obtain permission from government authorities — a special procedure applies to companies from “unfriendly” countries, including mandatory approval of the transaction by a state commission.
• Sale through the Belarusian Currency and Stock Exchange — for shares in LLCs and joint-stock companies, the sale must be conducted on the exchange, which prolongs the process and makes it less predictable.
• Obtaining permission and paying a fee — no less than 25% of the market value of the sold asset or share. Payment of this fee is a prerequisite for obtaining approval for transactions involving assets of foreigners from “unfriendly” countries.

Despite these restrictions, this option remains popular, especially when a loyal buyer is found who is willing to undergo all approvals.

Voluntary Liquidation

Closing a legal entity at the initiative of the owners is the most straightforward but often the most labor-intensive path. It includes:

• Preparing owner resolutions, notifying tax and registration authorities.
• Publication of liquidation information by the registering authority and settlement with creditors.
• Undergoing a tax audit, submitting reports, and revoking licenses.
• Deregistration with all government bodies and completion of liquidation.

In practice, the procedure may take 6–12 months or more, especially if the company was actively operating. Liquidation is often complicated by the difficulty of obtaining consent from all founders.

Reorganization with Subsequent Exit of a Foreign Participant

An alternative to liquidation can be reorganization of the company (e.g., merger or transformation) with the subsequent exit of the foreign participant from ownership. This may be relevant when:

• A local partner remains willing to continue operations.
• A merger with another Belarusian company is planned.
• There is a need to avoid a lengthy liquidation process.

This approach helps preserve part of the structure and jobs, reducing social and reputational burden. However, it usually requires prior approvals and does not eliminate tax and legal inspections.

Business Dormancy Without Formal Closure

Some foreign companies choose to formally keep the legal entity registered without active operations. This may be a temporary measure when:

• The company hopes for an improvement in the political and economic situation.
• Assets are difficult to sell or liquidate.
• Negotiations on sale or reorganization are underway.

In this case, the legal entity remains registered but suspends operations, minimizes turnover, and records losses. At the same time, reporting obligations, bookkeeping, taxes, and other mandatory payments remain. In some cases, the company is classified as “inactive,” but the administrative burden cannot be completely eliminated.

The choice of exit form depends on business goals, urgency, availability of partners, asset volume, and government attitude toward the company. It is important to assess the legal and financial consequences of each scenario in advance to minimize risks and costs. Consultation with our experienced lawyer is recommended.

Alternative Exit Strategies

Not all foreign companies are ready for formal closure of the Belarusian legal entity or asset sale — partly due to difficulties obtaining permissions, administrative barriers, and potential losses. In such cases, alternative approaches are often used to either postpone exit or minimize presence without formal liquidation. Below is an overview of such strategies.

Transfer of Management and “Freezing” Activity

A frequently applied approach is maintaining the legal entity without active economic activity. The company formally continues to exist but:

• Nominal or loyal local directors are appointed (sometimes from remaining employees).
• Most accounts are closed, licenses revoked, and commercial operations ceased.
• The legal entity is put into “dormant” status (without active operations but with minimal reporting).

This approach helps avoid immediate conflicts with regulators or partners and preserves assets until the situation clarifies. However, expenses for accounting, HR, and legal minimum remain, as well as potential risks related to the appointed management.

Reorganization: Merger, Transformation, Exit of Participant

Some companies choose internal structural transformation through reorganization procedures. Possible options include:

• Merger with another (usually local) entity with transfer of assets and liabilities.
• Transformation of the legal form (e.g., from LLC to unitary enterprise or LLC with a single local participant).
• Voluntary exit of the foreign participant with transfer of their share to a partner, employee, or trusted person.

Such procedures allow preserving business in Belarus without direct foreign involvement. It is important to note that in cases involving participants from “unfriendly” countries, state commission approval may be required even for internal restructurings.

Use of Holding Companies and Foreign Structures

If a Belarusian company is part of an international group, there are possible options to restructure ownership through intermediary entities:

• Transfer of shares from a parent company in a third jurisdiction that is not subject to restrictions.
• Redistribution of functions and rights between offshore or European holding companies.
• Transfer of asset management to another group company.

These solutions allow maintaining control over the Belarusian asset while formally exiting through one of the entities. However, they require careful legal preparation, assessment of tax implications, and consideration of sanctions risks.

Relocation of Personnel and Projects Abroad (Business Relocation)

In many cases, the main value of a business lies in the team and intellectual property rather than local assets. Therefore, more foreign companies are opting for a relocation strategy:

• Transferring employees to other jurisdictions (Poland, Lithuania, Georgia, Armenia).
• Closing offices and working remotely or in a hybrid format.
• Moving contracts, IT infrastructure, and client services abroad.

This strategy helps preserve business processes and the team, even if the legal entity in Belarus remains formally. It is especially relevant for IT companies, digital agencies, consulting firms, and tech startups.

Alternative exit scenarios require a strategic approach, evaluation of reputational and legal consequences, and consultation with local lawyers. In many cases, such flexible schemes prove to be the most realistic and safe under strict administrative control.

Taxation When Exiting the Market

The exit of foreign business from Belarus inevitably involves tax consequences. Depending on the chosen form (sale, liquidation, reorganization), obligations may arise related to corporate income tax, VAT, employee-related taxes, as well as the application of international double taxation treaties.

Tax Consequences of Selling a Business

The sale of shares or assets of a Belarusian company, especially when the seller is a foreign legal entity, is subject to:

• Withholding income tax at the source of payment (if the seller receives income from a source in Belarus).
• Corporate income tax at the company level if the transaction involves asset revaluation or sale of property.
• VAT if the deal involves specific assets or a property complex.

For non-residents, especially from “unfriendly” countries, transactions require approvals from government authorities, which may affect asset values and tax payment deadlines. Involvement of a tax consultant at the deal preparation stage is highly recommended to minimize the tax burden and comply with all required business sale procedures.

Taxes on Liquidation

During voluntary liquidation of a legal entity in Belarus, the following tax payments arise:

• Corporate income tax calculated based on the liquidation balance — for example, if asset value transferred to participants exceeds their contributions.
• VAT on remaining inventories if they are removed from business activities (e.g., transferred to the owner).
• Standard VAT and corporate income tax apply to the sale of assets during liquidation.

Additionally, at the final stage of liquidation, the company undergoes a tax audit, which may result in additional tax assessments for previous periods.

Features of Settlements with Employees and Payment of VAT and Corporate Income Tax

During the process of ceasing operations, it is necessary to correctly settle accounts with employees:
Severance payments to dismissed employees are subject to personal income tax (13%) and accompanied by contributions to the Social Protection Fund (FSSP).
Compensations, severance pay, and other payments must be properly documented in accordance with tax legislation.
In cases of contract termination, lease cessation, or sale of remaining inventory, VAT and corporate income tax should be calculated accurately, as with regular business activities.

It is crucial to ensure precise accounting records, as tax authorities may impose additional tax liabilities for any discrepancies found during inspections, especially when exiting the market hastily. For this reason, we recommend consulting our experienced accounting and tax professionals.

Application of International Double Taxation Treaties

If a foreign entity receives income when exiting Belarusian business, it is important to verify the applicability of bilateral double taxation avoidance agreements between Belarus and the country of the seller’s tax residency.

Such treaties may:

• Reduce or eliminate withholding tax on income from the sale of shares or assets.
• Define the taxation procedure for liquidation payments.
• Grant rights to tax credits or exemptions in another jurisdiction.

To benefit from these treaties, it is essential to provide documentary proof of residency status (e.g., obtain a tax residency certificate) and comply with disclosure requirements in Belarusian reporting. Otherwise, tax authorities may refuse tax relief.

Thus, the tax consequences of exiting Belarusian business can be significant and affect all areas of company operations — from asset sales to employee terminations. Without a sound tax strategy, such an exit may result in considerable losses. Therefore, it is important to consider not only Belarusian regulations but also the international tax context.

Recommendations for Foreign Businesses and Action Strategy

Exiting the Belarusian market requires not only legal compliance but also a strategic approach. Mistakes at this stage can lead to financial losses, asset freezes, tax reassessments, and reputational risks. Below are key recommendations to help foreign companies navigate this process more predictably and with minimal costs.

Step 1. Risk Assessment Before Starting the Procedure
Before deciding on the form of exit (sale, liquidation, business suspension, etc.), it is important to conduct a comprehensive preliminary audit:

• Assess assets, liabilities, and current contracts.
• Analyze ownership structure and potential sanctions risks.
• Determine whether state authority approvals are required.
• Study possible tax consequences and debt obligations.

Such an audit helps avoid unforeseen complications and choose the right exit model. We recommend entrusting this stage to our experienced lawyers familiar with the specifics of Belarusian practice and current restrictions.

Step 2. Preparation of Legal Structure and Documentation
The next crucial step is legal and organizational preparation:

• Formalizing corporate decisions (shareholders’ meetings, minutes, powers of attorney).
• Preliminary deal structuring (e.g., via an intermediary company).
• Preparing documents for registration authorities, banks, tax offices, etc.
• Proper valuation of assets and intellectual property rights.

The quality of these documents determines the legal robustness of the entire procedure. Our lawyers provide full support at all stages — from analysis to the final company closure or business sale.

The Role of Legal and Financial Consultants

A comprehensive exit from the Belarusian market rarely occurs without the involvement of professional consultants:

• Lawyers assist in choosing a legal and optimal exit strategy, preparing all necessary documents, and obtaining required approvals.
• Financial consultants assess the tax implications, help structure the calculations, and minimize costs.
• Compliance specialists ensure adherence to sanction restrictions and regulatory requirements.

The AMBY Legal team offers a coordinated approach: we combine expertise in corporate law, taxation, currency regulation, and cross-border transactions.

Practical Tips for Minimizing Losses and Reputational Risks

To exit the market properly and with minimal consequences, we recommend following these best practices:

• Avoid using formal or superficial schemes (such as nominal asset sales without proper legal analysis).
• Maintain transparent and consistent documentation — both internally and in dealings with counterparties and regulatory authorities.
• Notify employees, partners, and clients in advance if the termination of business operations may affect their interests.
• When appropriate, consider alternative mechanisms such as reorganization, temporary suspension of activities, or transfer of assets to a trust or fiduciary management.

It is also important to keep in mind that legal obligations may persist even after a formal exit (e.g., tax claims or labor disputes). That is why it is crucial to exit properly taking into account the interests of all parties involved and minimizing potential risks.

Conclusion

The withdrawal of a foreign company from the Belarusian market is a complex, multi-stage process involving legal, tax, currency, and management aspects. Under current restrictions, approval requirements, and risks associated with sanctions and state regulation, it is essential not just to “exit,” but to do so in a legally sound, financially safe, and reputationally responsible manner.

There are various scenarios — from formal liquidation and asset sale to more flexible solutions such as suspension of operations, management transfer, or restructuring. Each model requires preliminary evaluation, proper documentation, and consideration of legal consequences both in Belarus and abroad.

We strongly recommend against taking impulsive actions. Engaging experienced legal counsel is not merely a safeguard for proper documentation but also a way to significantly reduce costs, avoid account freezes, fines, and prolonged disputes with government authorities.

Contact us

If you have any questions related to the exit of foreign businesses from Belarus, we will be happy to help! Our long-term experience will help you choose a lawyer to represent your interests.

• +37529142-27-19 (WhatsApp, Viber, Telegram);
• info@ambylegal.by.