Legal regulation.

The bank’s registration procedure and requirements on establishment of banks in Belarus are regulated by numerous legal acts, among which the main are the Bank Code of the Republic of Belarus and Instruction on the procedure of state registration and licensing of banks and non-bank credit and financial institutions.

The bank’s state registration is carried out by the National Bank of the Republic of Belarus.

Quota of foreign capital in the banking system.

The establishment and operation of banks with foreign investments in Belarus are subject to additional requirements. The National Bank by agreement with the President of the Republic of Belarus establishes the amount (quota) of foreign capital participation in the banking system of the Republic of Belarus.

The National Bank stops the state registration of banks with foreign investments as well as of bank subsidiaries of foreign banks in achieving the defined amount (quota) of foreign capital participation in the banking system of the Republic of Belarus.

At present the amount (quota) of foreign capital participation in the banking system of the Republic of Belarus is not more than 50 percent. The quota is calculated as the ratio of the total capital owned by non-residents in statutory funds of banks with foreign investment and of the statutory fund of subsidiary banks of foreign banks to the total statutory fund of banks registered in the Republic of Belarus.

The bank may be formed only as a joint-stock company or a unitary enterprise.

Bank establishment procedure

Bank establishment procedures may be provisionally divided into 3 parts:

1. Technical equipment of the bank’s office on issues related to: 
   • organization of cash work;
   • ensuring security technology;
   • organization of encashment and transportation of values.
2. Legal procedures: 
   • preparation of documentation (Bank’s Charter, applications and other documents required by legislation for bank establishment);
   • registration of stock issue (for banks established as joined stock companies).
3. Financial issues: 
   • preparation of a business plan according to requirements established by Belarusian legislation.

Legal requirements for bank registration.

Prior to submission of documents required for the bank’s state registration, one of the bank’s founders or his authorized representative must agree with the National Bank the name of the bank to be established.

For the bank’s state registration the following documents should be submitted to the National Bank:

1. application;
2. the bank’s charter;
3. extract from the minutes of the constituent assembly (property owner decision) on the approval of the bank’s charter and of the candidates for positions of the director and chief accountant of the bank;
4. documents confirming the bank’s authorized capital formation in full (extract of the temporary account, the expert report on the reliability of the property assessment in case of making a contribution to the statutory fund in non-monetary form and other documents in accordance with the legislation of the Republic of Belarus);
5. copies of the constituent documents and certificates on the state registration of the founders - legal entities, audit reports on the reliability of their accounting (financial) statements which contain information on the availability of equity for the contribution to the bank’s statutory fund, as well as the confirmation of tax authorities on the fulfillment of obligations to the budget and (or) the state budget and (or) extra-budgetary funds of special-purpose by the founders - legal entities;
6. information about the founders - individuals: a copy of the labor book, certified by the last place of work (for the unemployed - a certificate of the employment service agency or a copy of the pension certificate certified by the social agency by the place of residence), certificate of the internal affairs confirming that they have no outstanding or unexpunged convictions for crimes against property and (or) the economic activities patterns;
7. document confirming the right to place the bank at the place of its location (the location of the permanent executive body of the bank) specified in the constituent documents;
8. profiles of candidates for the positions of the director, chief accountant of the bank, filled in by them and containing information provided for by the third part of this article;
9. documents confirming the payment of contributions to the bank’s statutory fund according to the list defined by the National Bank;
10. business plan, the compilation procedure and assessment criteria of which are established by the National Bank;
11. documents confirming the existence of the technical possibility to implement the relevant bank transactions according to the list defined by the National Bank;
12. payment document confirming the payment of the state duty for the bank’s state registration;
13. sample illustration of corporate seals in duplicate.

Additional requirements for foreign investors.

For the state registration of the bank with foreign investments in addition to the above documents the foreign legal entity must additionally submit the following:

• decision to establish or to participate in the establishment of the bank with foreign investments in the territory of the Republic of Belarus;
• document confirming the registration of the foreign legal entity (organization) - legalized extract from the trade register of the country of its establishment or other equivalent proof of the organization’s legal status in accordance with the legislation of the country of its establishment (the extract should be dated no later than one year before the date of the documents submission);
• balance sheet for the previous year, confirmed by the audit report, unless otherwise determined by the National Bank;
• written permission of the authorized body of the country where it was established to create or to participate in the establishment of the bank with foreign investments in the Republic of Belarus, where such authorization is required according to the legislation of the country of its establishment.

For the state registration of the bank with foreign investments the foreign individual must additionally submit the following documents:

• copy of the identity document;
• confirmation issued by his foreign servicing bank of the solvency of this individual or the declaration or other document provided for by the legislation of the country of his permanent residence, on the sources of funds, which are made as a contribution to the bank’s statutory fund.

For the bank’s state registration as a joint-stock company the following documents should be additionally submitted to the National Bank:

• the notarized agreement on the establishment of a joint-stock company;
• list of founders with the indication of the size of their contributions, amount, category and nominal value of shares to be distributed among them, as well as proportions of such shares in the total volume of the statutory fund of this bank.

All documents should be submitted in one of the official languages of the Republic of Belarus or in the original language with the translation into one of the official languages of the Republic of Belarus (the reliability of the translation of documents from one language to another, the authenticity of the translator's signature should be notarized) and (or) legalized in accordance with the legislation of the country of the foreign investor’s establishment (residence).

There are the following requirements for the candidates for the position of the bank’s director and chief accountant:

for the bank’s director:

• higher legal or economic education and work experience of at least three years of leading the department or another branch bank, confirmed by a copy of the diploma and an extract from the labor book;

for the chief accountant:

• higher economic education and work experience of at least three years as an accountant in the bank, confirmed by a copy of a diploma and an extract from the labor book.

The candidates should not have an outstanding or unexpunged convictions, which should be confirmed by the certificate issued by the internal affairs agency containing, in addition, the information in evidence that they were not (or they were) involved as suspects or defendants in a criminal case.

Candidates for the position of the bank’s director and chief accountant as well as their deputies have to pass conformity assessment of the qualifications and requirements for business reputation in the National Bank of Belarus.

The bank’s state registration is not permitted if:

• against one of the bank’s founders the judgment about levy of execution on property is not executed;
• an individual - the founder of the bank has the outstanding or unexpunged convictions for crimes against property and (or) economic activity patterns;
• founder of the bank has the debt on wages, payments to the budget and (or) the state budget and (or) extra-budgetary funds of special purpose or is a founder (participant, property owner, director) of a legal entity (simple partnership (contract on joint activity), economic group) which has such debt;
• founder of the bank is a founder (participant, property owner, director) of a legal entity against which the decision on liquidation was made, but the process of liquidation is not completed;
• founder of the bank is a public association which pursue political goals;
• for the bank’s state registration not all the documents provided for by legislation are submitted;
• in the documents submitted for the bank’s state registration there is the unreliable information and the discrepancy between the business plan and the criteria established by the National Bank;
• there were identified facts of application of borrowed cash and (or) illegally obtained income for the bank’s statutory fund formation;
• bank’s charter or other documents submitted for its state registration do not comply with the legislation of the Republic of Belarus or the procedure of the bank establishment is violated.

State registration of a bank can’t also be performed in case if the candidates for the position of the bank’s director, chief accountant do not comply with the qualifying requirements as well as requirements for the business reputation specified for them, or if the special qualification commission of the National Bank identifies the lack of qualification of the stated individuals.

There is the mismatch of candidates for the position of director, chief accountant of the bank to the qualifying requirements, specified for them, if:

• the candidate for the position of the bank’s director has no higher legal or economic education as well as work experience not less than three years of leading the department or another branch bank;
• the candidate for the position of the bank’s chief accountant has no higher economic education as well as work experience not less than three years as the bank’s accountant.

There is the mismatch of the bank’s director, chief accountant (candidate for the position) to the requirements for the business reputation, specified for them, if:

• the candidate has the outstanding or unexpunged convictions;
• the candidate is involved as a suspect or a defendant in a criminal case during the day when the decision on the bank’s state registration should be made;
• the candidate during the current year committed an administrative violation in finance, stock market, banking, business and (or) against the taxation procedure prescribed by a legally effective decision of the body authorized to consider cases of administrative violations;
• the candidate within the past two years terminated the labor contract on the initiative of the employer in case if he had committed guilty activities which resulted in the loss of confidence by the employer;
• the candidate does not comply with the other requirements for the business reputation, specified by the National Bank.

The state registration of the bank with foreign investments may also be refused on reasons similar to restrictions applicable in the respective foreign countries for the refusal of state registration (s) of banks with investments of citizens of the Republic of Belarus and (or) legal entities of the Republic of Belarus.

Refusal of the bank’s state registration or the failure of the National Bank to make a decision on its state registration within the prescribed deadline may be appealed to the Commercial Court.

Decision on the bank’s state registration or on the refusal of its registration is made by the National Bank within the period not exceeding two months from the date of submission of documents required for the bank’s state registration. The National Bank together with the certificate of state registration of the bank issues the licence to carry out of banking activities, indicating therein the list of banking operations, which the bank is entitled to exercise.

The right to conduct banking operations to attract funds of individuals, which are not individual entrepreneurs, in deposits, open and maintain bank accounts of such individuals, open and maintain accounts in precious metals, purchase and sale precious metals and (or) of precious stones, place precious metals and (or) precious stones into deposits may be granted to the bank no earlier than two years from the date of its state registration in terms of its strong financial position during the past two years and the availability of regulatory capital at a rate established by the National Bank.

Criteria to determine the strong financial condition of the bank are established by the National Bank. License to carry out of banking activities, indicating therein the list of banking operations, which the bank is entitled to exercise, is issued to the bank on the basis of documents submitted for the bank’s state registration.

State duty of 2 200 base units (77 000 000 BYR) is fixed for the issuance of the licence on carrying out of banking activities.