Presidential Decree #760 Delivers Hard Blow on Individual Entrepreneurs

Presidential decree # 760 introduces amendments to order # 285 of 18 June 2005 On some measures for regulation of business activity, meeting the worst expectations of individual entrepreneurs. In his interview with BelaPAN an expert Siarhei Balykin pointed that the text of the decree appeared on the web-site of the National center of legal information on 4 June, whereas it came in force on 1 January and was signed on 29 December 2006, after the end of the deadline for payment of fixed VAT by entrepreneurs.

‘This decree delivers a very hard blow on individual entrepreneurs and exceeds in it all previous registrations taken together’, commented the expert. The matter is that since 1 January 2008 it will be prohibited to employ anybody except for close relatives whereas the prior restriction of the number of employees (an individual entrepreneur can employ up to three persons) remains in force. According to Balykin the decree considerably limits the constitutional right of Belarusian citizens to business activity despite the constitutional guarantees of equality of all economy subjects and the right of a citizen to independently choose the form of business activity.

‘This decree will have many negative consequences. First of all, it is the extension of the practice of black employment, especially in the sector of services. Secondly, many individual entrepreneurs will have to register as juridical bodies, which is quite expensive and difficult both legally and practically. In fact, the state orders individual entrepreneurs to undergo re-registration within a year’s time. Having some experience in this field I can predict the results – large queues and crowds in executive committees which will exceed those standing there during the re-registrations of 1996 and 1999, because the individual entrepreneurs, the number of which considerably exceeds the number of juridical bodies, will have to collect a huge pack of documents which officials of the executive committees will have to read and verify. Besides, ‘transformation’ of an individual entrepreneur into a juridical body is not reorganization from the legal point of view, that’s why it is not clear how the legal succession will take place. In this case it concerns re-registration of houses and passing of the property that is used in business activity. Numerous entrepreneurs have already faced this problem after the number of employees was limited to three persons. Now this trouble will acquire a much larger scope. I can’t understand the introduction of such restriction as individual entrepreneurs employ workers and regularly pay to the budget all taxes for them,’ commented Siarhei Balykin.