Residents of the Belarusian Hi-Tech Park have the right to open bank accounts with foreign banks and carry out international financial transactions. Residents of the Hi-Tech Park can receive revenue from non-residents to accounts in foreign banks for their services, work performed and goods delivered. There are some peculiarities in the disposal of such revenue. The amounts that are credited to the accounts of a Belarusian company in foreign banks cannot always be spent in the same order as the amounts that are credited to the company’s accounts in Belarusian banks. All the features can be sorted out in consultation with our experienced accountants and lawyers. Let’s consider the main features of the disposal by residents of the Hi-Tech Park of the proceeds that go to their bank accounts in foreign banks.
What is currency repatriation?
Currency repatriation is the process of returning or transferring foreign currency from abroad back to the country in which that currency was originally received or earned. This process is controlled by government agencies and includes various legal and financial restrictions and requirements. Currency repatriation may be mandatory for residents of the country in order to ensure control and stability of foreign exchange transactions and foreign economic relations.
Repatriation of currency in Belarus
Companies that are registered in Belarus, including in the Hi-Tech Park, are required to return to Belarus the currency and Belarusian rubles that were deposited into their bank accounts in foreign banks under export contracts. This duty is called “repatriation”.
This obligation does not apply to foreign contractors of Belarusian companies, as they are not bound by the requirements of Belarusian legislation.
In case of assignment of the right of claim under the export contract to another resident, the obligation of repatriation passes to him.
When an export contract involves payment to a company’s bank account in a Belarusian bank, there is no question of repatriation.
Deadline for currency repatriation
The resident of the Hi-Tech Park determines the deadline for the repatriation of currency independently. To do this, it is necessary to analyze the terms of the export contract and bank account service agreements concluded with Belarusian and foreign banks.
What is the provision of the export contract with a non-resident to pay attention to:
The deadline for the non-resident to fulfill his obligations. This is the period between the date of fulfillment of obligations by a resident and the last date of fulfillment of payment obligations by a non-resident.
What is the provision of the agreement concluded with the Belarusian and foreign bank to pay attention to?
The deadline for crediting an international payment to a bank account.
How to calculate the period of repatriation
Add to the deadline for the fulfillment of obligations by a non-resident the deadline for crediting money to a Belarusian bank account. There is a general rule that the period of repatriation should not exceed 30 calendar days.
Due to the difficulties of accepting international bank payments by Belarusian banks, exceptions have been established for the timing of repatriation.
The deadline does not need to be met when:
- Foreign banks freeze money.
- Settlements are blocked due to international sanctions.
The deadline for repatriation under export contracts concluded with residents of Ukraine before 24.02.2022 includes the duration of force majeure circumstances declared by Ukraine moratorium. Consequently, the absence of foreign exchange earnings under export-import contracts with Ukrainian counterparties will not be recognized as a violation of currency legislation until the end of 2024.
The deadline for the return of the currency that was deposited into a bank account with a foreign bank
In the event that the export contract’s revenues are credited to a resident’s foreign bank account, the exporter’s Belarusian bank account must receive the funds within five business days of the foreign bank account being credited.
When the period of repatriation increases
When the deadline for repatriation has not yet ended, in some cases it is stretched due to certain circumstances.
- When banks consider a request for payment under a bank guarantee, the repatriation period is extended until the money is credited to the resident’s bank account or until the request for a bank guarantee is refused.
- During mediation and the execution of the mediation agreement, the repatriation period is extended until the execution of the mediation agreement in the form of money transfer to the resident’s bank account or until the termination of mediation.
- When the insurer considers a resident’s application related to the execution of an export contract, the repatriation period is extended until the insurer refuses to pay the insurance indemnity.
- When considering a resident’s appeal by the courts, the repatriation period is extended until the execution of the court decision in the form of money transfer to the resident’s bank account.
- Upon initiation of enforcement proceedings, the repatriation period is extended until recovery under the enforcement document in the form of money transfer to the resident’s bank account.
- In case of bankruptcy of a non-resident, the repatriation period is extended until the end of bankruptcy or the beginning of bankruptcy-related procedures.
- If there is a dispute and it is settled in a pre-trial manner, the repatriation period is extended until the non-resident returns the money.
In all cases where it is possible not to fulfill the obligation of repatriation, our experts in international settlements will help you figure it out.
When it is possible not to transfer money from a foreign bank account to Belarus
Belarusian companies may, in certain cases, not transfer money from their foreign bank accounts to their accounts in Belarusian banks. In particular, money that has been transferred to foreign bank accounts can be sent to Belarus without transfer:
- For the payment of taxes and other mandatory payments abroad.
- To pay for the expenses of the Belarusian company related to the provision of services and work performed abroad during the period when the services and work were performed.
- To pay for the costs of maintaining a representative office or branch of the company abroad.
- For settlements with a foreign or Belarusian bank.
- For payment of remuneration under a letter of credit, a bank payment obligation, a reinsurance agreement, to banks in connection with the transfer of money.
- To pay for the costs of exhibitions and events when the company participated in them during their holding.
The specifics of spending money from foreign bank accounts of companies-residents of the Hi-Tech Park can be understood in consultation with our accountants and lawyers — specialists in international settlements.
How to contact us
For more information or advice on the disposal of proceeds from export contracts received in foreign bank accounts, do not hesitate to contact us. We are here to help and support you.
Phone and e-mail communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@spex.by.
