On 19 November 2024, a new version of the Civil Code of the Republic of Belarus came into force, according to part 2 of Article 772 of which a commercial organisation may act as a factor in financing agreements under assignment of a monetary claim (factoring agreements) Previously, only banks or non-banking financial institutions were permitted to do so. However, the legislation also provides for the possibility of imposing additional requirements on commercial organizations acting as factors. Such requirements can be specified in separate legislative acts.
On May 13, 2025, Presidential Decree No. 416 "On the Activities of Financing Under the Assignment of a Monetary Claim (Factoring)" came into force. This decree mandates the inclusion of certain commercial organizations in the Factoring Organizations Register. The criteria for inclusion are:
• The organization must provide financing to creditors under factoring agreements exceeding 3,000 base amounts per calendar year;
• At the time of the assignment of claims, the debtor's overdue payment to the original creditor should not exceed 180 days.
Consequently, if an organisation is actively engaged in factoring, i.e. the amount of financing for a calendar year is more than 3000 base amounts and the overdue debts for this amount is less than 180 days, such an organisation is obliged to be included in the Register (hereinafter we refer to such organisations as factoring organisations). Otherwise, a commercial organisation does not need to be included in the Register to enter into factoring agreements.
Thus, from 13.05.2025, depending on the above mentioned characteristics, conclusion of factoring agreements may be performed by commercial organisations in two legal statuses: 1) commercial organisation and 2) factoring organisation.
The considered Decree establishes a significant number of requirements to the activities of factoring organisations. Below are the main ones:
• presence of an authorised fund in the amount of not less than 125 thousand BYN;
• presence of a risk management system;
• compliance with financial ratios;
• assessment of the creditor's/debtor's solvency;
• ensuring compliance with the requirements set by the National Bank to business reputation and qualification of the head;
• other requirements set out in paragraphs 6-9 of clauses 1.4 and 1.7 of the Decree.
The specialists of Lawyer City Law Firm are ready to explain the nuances of factoring regulation and provide legal assistance on other issues of financial law.