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
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
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
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
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
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 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: email@example.com, 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: firstname.lastname@example.org.