Commentary to Ordinance No. 2 of 28 February 2017

The procedures for business startup and shutdown in Belarus have been improved. This is envisaged in Ordinance No. 2 of 28 February 2017 which introduces amendments to Ordinance No. 1 of 16 January 2009 “Concerning the state registration and liquidation (cessation) of business entities”.

In order to reduce the number of administrative procedures and facilitate entrepreneurship activities, the ordinance provides for the possibility to open an operating account in a bank simultaneously with the registration of a business entity.

To improve the investment climate and abolish excessive restrictions on the participation of legal entities and individuals in the establishment of new business ventures, the ordinance lifts the restriction on the establishment of an affiliated enterprise in cases when its founder has any civil debts.

The approach to the invalidation of the state registration of business entities in cases when they provide false information to the registration body has been changed. When trying such cases, the courts will take into consideration the nature of violations, potential damage, and other significant circumstances.

Registration bodies have been authorized to close down a business entity which has been inactive for 24 months in a row. As of today, such a decision can be made if an enterprise stays inactive for 12 months in a row and does not inform corresponding bodies about the reasons for such inactivity.

The ordinance also envisages that tax bodies or other authorized agencies can file a legal claim regarding the invalidation of the state registration of a business entity, its shutdown (cessation) within three years. Business entities can complain against the activities (inactivity) of registration bodies within three years.

In accordance with the provisions of the ordinance, a business entity willing to close down can sign an agreement on the provision of audit services to make sure that all statutory payments to the budget are calculated correctly and made in time and in full. Using the auditor’s report, tax and customs bodies, the Belarusian insurance company Belgosstrakh will be able to provide all necessary information about the closing down of a business entity to the registration body without additional inspections.

The ordinance also enables business entities to submit documents about their shutdown (cessation) in the electronic form and provides for the mechanism to terminate the operation of self-employed businessmen for the period of their regular or alternative military service, imprisonment.

With the exception of a number of provisions, the ordinance will enter into force six months after its official publication.