Financial Times & Mergermarket (2008)International Tax Review (2010)International Financial Law Review (2010, 2009)PLC Which lawyer? (2010, 2009)www.sorainen.comFinancial Times & Mergermarket (2008)International Tax Review (2010)International Financial Law Review (2010, 2009)PLC Which lawyer? (2010, 2009)www.sorainen.comBelarusian News - 15 Sep 2010 Financial Times & Mergermarket (2008)International Tax Review (2010)International Financial Law Review (2010, 2009)PLC Which lawyer? (2010, 2009)www.sorainen.com
Для прочтения белоруcских новостей SORAINEN на русском языке, пожалуйста, нажмите здесь: In Russian

 
   
 
Maksim Salahub
Office Co-Managing Partner
maksim.salahub@sorainen.com
   
Dear clients and cooperation partners,

After the hot summer – which became remarkable rather for new twists in relations between Belarus and its largest trade partner, Russia – the business community is now waiting for further changes in business laws to take place. The long awaited (and delayed) Directive No 4, rumoured to bring unseen deregulation of the legal environment, will likely be issued in the coming autumn months.  Also, it seems that the moment of truth is coming for Belarus privatisation, and already before year end we will see how real are the Belarusian Government’s declared intentions to accomplish mass privatisation in the country. Recent events in this area could confuse anyone, but it is clear that several notable privatisations are now being considered.

The attention of the business community is now also drawn to significant amendments to the Law on Companies and new regulations on licensing adopted at the beginning of September – please see below for brief coverage of novelties.


Belarus privatisation campaign taking new turns

In 2008, the Belarusian Government adopted an ambitious privatisation plan which covered close to 600 companies. However, implementation of the plan proved to be more difficult than expected: the largest transaction was the sale of BPS-Bank to Russian Sberbank in 2009 with a transaction price close to USD 300 million (approx EUR 236 million).

Insurance market leaders Belgosstrakh (fully state-owned and the largest company in the sector) and Stravita (Belgosstrakh’s wholly owned subsidiary and the largest life insurance company) were put on the privatisation list in February 2010.  Although several foreign strategic investors demonstrated significant interest in these two targets, both companies were deleted from the list in late July 2010 along with over twenty enterprises from other industries.

As mentioned in our previous Belarusian Newsflash, privatisation auctions for five industrial enterprises are being conducted in August-September. On 18 August 2010, auctions for three of them (Lida Foundry and Mechanics Plant, Bobruisk Machinery Construction Plant and VolMet) failed as no bids were submitted.  The Belarus privatisation authorities have mentioned that the auction may be repeated in the near future.

On the other hand, the Belarusian Government lifted the ban on privatisation of one of the country’s largest enterprises, Belaruskali – an exporter of potash fertilisers with a global market share of approx 15%. Negotiations on possible sale are being conducted with Chinese and other investors.  According to the Belarus Council of Ministers, a non-controlling stake in the company may  be offered  for  sale  at  a  price of USD 6-7 billion (approx EUR 4.7-5.5 billion). Experts are not unanimous as to how justified this price estimate is.

Significant amendments to the Law on Companies

In June 2010, Belarus’ Law on Companies was amended; the amendments enter into force at the beginning of 2011. A major novelty is a founders’ agreement on establishing a limited liability company (previously only an agreement between the founders of a joint-stock company was possible). An agreement on establishment regulates and increases enforceability of shareholders’ obligations undertaken in connection with establishing a limited liability company.

The amendments also specify the notion of interconnected transactions and scope of liability of affiliated persons. Other changes to the Law relate to the LLC exit procedure (now revocation of declaration of exit is possible) and contributions of proprietary interest to authorised capital: these contributions may constitute up to 50% of the declared capital.

Licensing to be substantially reduced from 2011

On 1 September 2010, President Lukashenko signed Edict No 450 On Licensing of Certain Types of Activity. Under the Edict, licensing of 16 types of business activity will be abolished when the new legal act enters into effect on 1 January 2011. Most notable licenses abolished are construction, retail trade, catering and certain other licenses. According to the Belarus Ministry of Economy, total licenses issued will be reduced by 60%.  The Edict was adopted within the framework of the economic liberalisation campaign and is aimed at further reducing the regulatory burden on business.

BelarusEXPO-2010 in Riga takes place from 22-25 September 2010

The  National  Exhibition   of   the   Republic   of   Belarus  “BelarusEXPO-2010”  will  take  place  in  Riga from 22-25 September 2010 at the Ķīpsala International Exhibition Centre.

Belarusian Prime Minister Sergey Sidorsky and other officials will participate in the exhibition’s opening ceremony.

The exhibition will feature production by Belarusian enterprises in the mechanical engineering, construction, petrochemical, woodworking, light, food and pharmaceutical industries.

Parallel to the exhibition, the Belarusian-Latvian Investment Forum “The Baltic Region 2010” will enable participants to exchange views on issues of trade-economic development and investment cooperation and to establish new business contacts.

A variety of cultural events will also be a feature of the exhibition.

The Belarusian organiser of the exhibition is the Ministry of Trade of the Republic of Belarus and T&C (phone: +375 17 306 0606, 203 6869, 226 9014 (7), fax: +375 17 203 3386, e-mail: niko@tc.by, http://www.tc.by/).

To participate in the Forum please register online at http://www.latbel.lv/ or inform the Embassy of Belarus in Latvia by e-mail: latvia@belembassy.org.
print HTML Print HTML

You have received this e-mail with the Belarusian News because you are in the SORAINEN database.
If you are not interested in receiving Belarusian News in the future, please reply by clicking here.

Please note that SORAINEN Belarusian News is compiled for general information purposes only, free of obligation and free of legal responsibility and liability. It does not cover all laws or reflect all changes in legislation, nor are the explanations provided exhaustive. Therefore, we recommend that you contact SORAINEN or other legal advisor for further information. Electronic versions of SORAINEN Belarusian News are available and can be subscribed to on the SORAINEN website – http://www.sorainen.com/.

© SORAINEN 2010
All rights reserved