Management services in Belarus
In accordance with the legislation of the Republic of Belarus, the Executive body of a legal entity may be a director (individual) or a management organization (legal entity).
Spex Advisers provides professional services for the management of its clients’ legal entities established and operating in Belarus.
What benefits management for our customers
Company management services are similar to the services of nominee directors or managers, which are widely known and popular in the countries such as Cyprus, Estonia and many offshore jurisdictions. However, due to the strict regulation of the actions of Executive bodies of private companies in the Republic of Belarus by the legislator, it becomes impossible to create services and services of nominal managers in the form in which our foreign clients are accustomed to seeing them. Therefore, the management organization provides real and identical services and bears the same responsibility as the director (individual) of the company to the state regulator. But there are a number of advantages of using such services, rather than the director to manage a legal entity in the Republic of Belarus. It also due to the fact that if the foreign founder of the company wants to be the director, he should establish a company, then get a work permit, the term of receipt of which is usually from 20 to 30 working days, but in accordance with the laws of the Republic of Belarus, only the established company must have the Executive body on the first day of its establishment, thus it is impossible for a foreign founder to become the director of his company from the first day of its establishment.
Advantages of management company services in Belarus:
1. No need to look for a local director for the period of obtaining a permission to work as a director for a foreign founder. Do not forget that the director has the right to fully and solely dispose of the property and capital of your company, of course, if he (director) makes decisions outside the law or he is a fraud, then you can go to court, but the question is whether you need to lose your time and effort. Using the services of the management company you can use it for the period of obtaining a special work permit or from the date of company establishment and for the period that you need.
2. Termination of an employment contract with the director (individual) is often long-term and involves some risks. For example, if your director is not the most ethical person, the employer may incur the risks of additional benefits and compensation that were not agreed with the candidate in advance or were not included in the employment contract with the director.
Management relations with the management company are governed by a civil contract, so it can, if desired by the client, be easily terminated and be liable only in respect of the terms and conditions specified in the management contract.
3. Payroll accounting to director (individual). Direct salary costs in the Republic of Belarus are about 63 percent of the amount to be paid to the employee. Thus, more than half of the amount of your director’s salary you will have to pay as state taxes and other expenses (commissions and reimbursements to state funds). When you use a management company, you simply transfer the agreed remuneration to the account of the management company and all, besides, if you use the general system of taxation, you will be able to take into account this amount of remuneration in the costs of your company and not include this amount in the tax base.
4. Services of the management company in Belarus is a complex of services rendered by various specialists-professionals in their fields of activity, that is, a decision is made not alone (as in the case of the director), but collectively, including jointly developed strategy for management, interaction with government agencies and banks. Thus, the risk of making a wrong management decision is reduced.
5. The cost of services of the management company is often lower than the salary of the director (individual). In addition, very often there is a situation in various areas of business where it is necessary to interact with the institutions such as the National Bank of the Republic of Belarus, Customs authorities and Executive committees and often to find the director with competence in all areas is difficult or very expensive, so the management company is a more attractive solution for a foreign founder.
6. If the foreign founder does not want to transfer the executive powers to the management company for his own reasons, we can use an individual approach, in which the actual management will be carried out by our management organization, but the full executive power will belong to the foreign founder (director) of the legal entity.
Spex Advisers has been a successful management organization of venture funds in Belarus for a long time, IT companies and their development centers in Minsk and throughout Belarus, also among our clients there are trading companies that are engaged in import or export, as well as trade ON BOND, and about 30 percent of our clients are companies providing services in various areas from marketing to online services in the field of blockchain.