A foreign company deciding how to put roots down in Belarus usually starts with a practical question rather than a legal one: does the parent want a separate Belarusian company sitting under it, or does it want to operate in the country as itself? For years that question had a narrow answer. A foreign business could set up a subsidiary, or open a representative office that was not allowed to trade. A true branch of a foreign legal entity was simply not on the menu.

That changed on 19 November 2024. Under Council of Ministers Resolution No. 846 of 16 November 2024, Belarus began allowing foreign legal entities to open branches with the right to carry out commercial activity. For the first time, a foreign parent can trade in Belarus through an extension of itself rather than through a locally incorporated company. That makes «branch versus subsidiary» a genuine choice in 2026 — one with real consequences for who is on the hook when things go wrong, how much tax is paid, and how much of the profit actually reaches the parent. This article walks through those trade-offs so the decision is made deliberately rather than by default.

Three routes in, but really two that trade

It helps to be precise, because the vocabulary is used loosely in practice. A foreign company entering Belarus now has three structures available, and only two are built for doing business.

The first is a representative office — a subdivision of the foreign parent, not a separate legal entity, limited to non-commercial functions such as market research, negotiations, and general representation. It cannot sign commercial contracts in its own name or generate revenue, and the number of foreign staff it can employ is capped. If the plan is to test a market without trading, a representative office is often enough and cheaper to run — but the moment it involves invoicing customers, it is the wrong tool.

That leaves the two commercial structures — the branch and the subsidiary — as the real decision. Both trade, both hire, and both pay Belarusian tax on local profit. Where they part company is on the questions that matter most to a parent board: legal separation, exposure to liability, and how profit gets home.

The core distinction: one legal person or two

A subsidiary is a separate legal person. A branch is not. Everything else follows from that.

A subsidiary is a Belarusian company in its own right, incorporated in one of the local forms — most commonly a limited liability company, a closed joint-stock company, or a unitary enterprise. It has its own charter, management bodies, assets, and name on contracts. The foreign parent controls it as shareholder or founder, but in the eyes of Belarusian law the subsidiary and the parent are two different entities that happen to be related.

A branch is the opposite. It is the foreign company itself, operating through a registered presence inside Belarus. It has a director acting under a power of attorney from head office and keeps its own accounts, but it has no separate legal identity. Contracts a branch signs are contracts of the parent; debts a branch incurs are debts of the parent. The branch is, in the tax code’s language, a permanent establishment of the foreign organisation rather than a resident company. That single structural fact drives the liability and repatriation differences that follow.

Liability: where the risk actually sits

For most parent companies this is the decisive heading, and the two structures sit at opposite ends of it.

With a branch, there is no legal wall between the Belarusian operation and the rest of the group. Because the branch is the parent, the parent’s assets — wherever they are — stand behind the branch’s obligations. A supplier the branch fails to pay, a claim arising from its activity, a tax assessment against it: all reach back to the foreign company directly. The exposure is the whole of the parent, not a ceiling of «what we put into Belarus.»

A subsidiary is designed to prevent exactly that. As a separate legal entity, it is liable for its own debts out of its own assets; its property cannot ordinarily be used to settle the parent’s obligations, and it is not liable for the parent’s debts either. In the normal case, the most a shareholder can lose is its investment in the company. For a parent worried about ring-fencing a new or unpredictable market, that containment is the point of choosing a subsidiary.

That containment is strong but not absolute. Where a subsidiary enters into a transaction on the parent’s binding instructions, the parent can bear joint and several liability for it; and if a subsidiary is driven into insolvency through the parent’s fault, the parent can be made subsidiarily liable for the shortfall. These are exceptions rather than the rule, and they generally require conduct by the parent rather than mere ownership — but they mean the corporate veil in Belarus is a real protection, not an impenetrable one. A parent that treats its subsidiary as a genuine business, with its own decision-making, keeps the protection intact.

Tax on profits: closer than it looks

On the taxation of Belarusian trading profit, the two structures are more similar than most people expect, because Belarus taxes the profit earned in the country either way.

A subsidiary is a full Belarusian taxpayer: it pays profit tax on its worldwide income at the standard corporate rate, charges and reclaims VAT, and meets every other obligation a domestic company has. A branch, as a permanent establishment, pays profit tax on the profit attributable to its activity in Belarus and is likewise inside the VAT and payroll-tax systems. In both cases the headline profit-tax rate is the same one any Belarusian business faces, and the current profit-tax rates that apply for 2026 are worth reading closely, because the rate is no longer a single flat figure — a higher band applies above a large-profit threshold, and certain sectors sit above the standard rate. VAT is 20% as standard, with reduced and zero rates for defined categories.

The difference is in the base. A subsidiary is taxed on its own results as a standalone company, whereas a branch is taxed on the profit attributed to it — which means head office and the branch must be able to show how income and costs were split between them. That attribution exercise is where branch taxation gets its complexity, and it is also less familiar to local accountants than a self-contained subsidiary return.

The rates themselves move most from year to year, so any modelling should use current numbers. Cross-checking a source such as PwC’s Worldwide Tax Summaries against the primary legislation is sensible before committing to a structure on tax grounds.

Profit repatriation: the difference that decides it

If liability is where a subsidiary wins, repatriation is where a branch often wins — and it is the trade-off most decision-makers underweight.

Consider the subsidiary first. It earns profit, pays profit tax, and is left with a distributable balance. To move that balance up to the foreign parent, it pays a dividend — and a dividend paid to a foreign shareholder is subject to Belarusian withholding tax, currently 15% on dividends to a foreign organisation before any treaty relief. So the cash the parent receives has been taxed twice: once as company profit, and again on the way out. On 100% of pre-tax profit, a 20% profit tax leaves 80; a 15% withholding on the distribution leaves the parent with 68. The figure depends on the rate band and on whether a double-tax treaty reduces the withholding — many of Belarus’s treaties bring the dividend rate down to 5%, 10%, or 12% for qualifying shareholders — but the shape is a two-layer cost.

Now the branch. It, too, pays profit tax on its Belarusian profit. But when it sends the after-tax profit back to head office, it is not paying a dividend — it is moving its own money between two parts of the same legal person. Belarus does not impose a branch remittance tax, so that transfer does not attract a second withholding layer. On the same 100 of profit taxed at 20%, the group receives 80, not 68. On repatriation alone, the branch is the cheaper pipe.

That is a real advantage, but it should be weighed rather than seized. A favourable double-tax treaty can shrink the subsidiary’s second layer and narrow the gap. Cross-border payments out of Belarus involve currency-control formalities and, in the current environment, banking friction that affects both structures. And the repatriation saving buys the parent the full-liability exposure discussed above. The branch’s cleaner route home is inseparable from its weaker liability position — the two come as a pair, and the choice is about which matters more to the business.

The operational reality: setup, staffing, and winding down

Beyond liability and tax, the day-to-day mechanics differ enough to matter.

A subsidiary is registered as a new legal entity through the standard incorporation route, entered in the Unified State Register, then set up with tax registration, a corporate bank account, a seal, and an electronic signature — a well-trodden process local banks and counterparties understand instinctively. A branch follows a newer path: an application to the regional (or Minsk city) executive committee, supported by a legalised extract from the parent’s commercial register, the branch regulation, and a notarised power of attorney for its director. There is no state fee, but the review period runs from around 30 working days to two months, plus any other approvals the branch’s activity requires. Because the regime is only just over a year old, administrative practice is still settling — worth factoring in if timing certainty matters.

Staffing and accounting apply to both: employees work under Belarusian labour law, and both keep local records and file local returns. A subsidiary, though, carries one discipline that catches groups out — transactions with its foreign parent are related-party dealings that attract transfer-pricing scrutiny. A group that runs development or service work through a Belarusian company, for example a High-Tech Park subsidiary billing the parent, needs the intercompany pricing to stand up, because the tax authority looks closely at profit that appears to have been priced away. A branch avoids intra-group pricing with head office, since they are one entity, but takes on the profit-attribution question instead.

Exit is worth a thought at the entry stage too: liquidating a subsidiary is a formal, multi-stage process that takes longer than incorporation, while closing a branch runs through the same register that opened it. Neither is instant, and both are easier when the structure was set up cleanly.

How to choose

Reduced to its essentials, the decision turns on which pressure the parent feels most.

A subsidiary suits cases where limiting the parent’s liability matters, where local counterparties, banks, or regulators expect to deal with a Belarusian company, where the business needs many staff or long-term local investment, or where the plan involves a preferential regime such as the High-Tech Park. The trade-off is the second layer of tax on dividends and the transfer-pricing discipline of a related-party structure. A branch suits cases where direct parent control and a clean route for profit back to head office outweigh the liability exposure — a well-capitalised parent running a defined, lower-risk activity that the group is comfortable standing fully behind. The trade-off is that the parent’s assets sit behind the branch, and the regime is still new.

For many groups the honest answer emerges only once real numbers are attached — expected profit, the applicable treaty, the risk profile of the activity, and the appetite of the parent board. That is a modelling exercise, not a matter of preference.

Conclusion

The arrival of the foreign branch has turned a settled question into a live one. Where the choice used to be little more than «subsidiary or a non-trading office,» a foreign parent now weighs two working structures that pull in opposite directions: the subsidiary walls off liability but taxes profit twice on the way out, while the branch offers a cleaner route home but leaves the parent fully exposed. Neither is better in the abstract — the right answer depends on the risk of the activity, the size of the profit, the treaty in play, and how much protection the parent’s board insists on.

Because the trade-offs interact — and because the branch regime is still young — this is a decision worth pressure-testing against real figures before filing anything. If you would like help modelling the options for your own case and then registering a subsidiary or opening a branch on the right terms, our lawyers in Minsk can take you through it from structure to bank account. Whichever route you lean towards, current rates and rules should be confirmed against primary sources such as the National Legal Internet Portal and the Ministry of Finance, since the tax figures in particular change from year to year.