Belarus: country highlights
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  Maksim Salahub
  Maksim Salahub
  Aliaksei Vashkevich
  Aliaksei Vashkevich
Dear clients and cooperation partners,

At the end of the hot summer of 2018, we hope most of you have enjoyed a good vacation and are now charged for the autumn business season. As always, we present an overview of the most important developments on the Belarusian legal, business, and political scene.

Arguably, the most important recent event is a re-shuffle in the Government unexpectedly undertaken by President Lukashenka in two steps, on 18 and 31 August. As a result, Sergei Rumas, a former head of the Belarus Development Bank, was appointed Prime Minister. The President also changed some vice premiers and heads of several other major regulators including (respectively) the Ministries of Industry, Economy, Finance, and Energy. The new team is noticeably younger and is believed to favour market approaches in the economy. This is causing modest optimism that economic and legal reforms may accelerate. Please see the Reuters link for more detail.

Some optimism would not hurt as the economy’s 2018 half-year results are only partly encouraging (according to Belstat):

  • During the first 6 months of 2018, GDP grew 4.5 % year-on-year, growth slowing down.
  • The foreign trade balance was negative by USD 2.4 billion (while the trade balance in services, which is traditionally positive, was USD 1.7 billion as of 1 July 2018).
  • By the middle of 2018, export of goods and services had grown by 19.4 % year-on-year and imports by 20.5 %.
  • Net FDI inflow grew by 57% year on year in the first quarter of 2018 to USD 1.31 billion (excluding debt to direct investors).
  • Macroeconomic risks may escalate due to a dispute with major trade partner Russia concerning oil supplies, access to credit facilities, and Russia’s exposure to sanctions.

In addition, inflation has hit historic lows, 4.1 % as of July 2018 (expected annual rate not more than 6 %).

Moderate positive economic outcomes were accompanied by continuing legal reform. A digest of some of the most important legal changes appears below. In addition, we would like to give you a better feel of the local market by providing a compilation of M&A and debt financing transactions recently closed in Belarus.


On 17 July 2018, a set of amendments to the Civil Code was adopted.

Relaxation of Requirements as to Written Form of Transaction

Until recently, the regulations defined “written form” narrowly and, in most cases, required a “wet ink” signature on a document. The use of facsimile, simple electronic signatures or other similar means of signing was allowed only if parties directly agreed to it. This made entering into some transactions with foreign parties especially complicated.

Now the law allows any means of signing, including use of computer programs, information systems, and the like. The main requirement is to ensure reliable identification of a signatory. If necessary, the parties may agree to use a specific way of signing and to exclude all others.

Property Pledge Opportunities Expanded

The amendments to the Civil Code introduce the possibility to pledge property to several pledgees of the same priority simultaneously. Co-pledgees can foreclose on the pledged property at the same time. If the funds received from the sale of the pledged property are not sufficient to repay all co-pledgees in full, they are distributed between the co-pledgees in proportion to the amounts of their claims.

In addition, the amendments clarify the rules of subsequent pledge and priority of the main and subsequent pledgees. They also confirmed the previously adopted provisions concerning the Register of Pledged Movable Property created in 2016. This serves to determine the priority date of a pledge depending on the date of its registration with the Register.


The National Centre for Legislation and Legal Research has published a draft of another set of changes to the Civil Code. These cover a greater number of issues, including some international legal instruments previously introduced within the Belarus High-Technology Park (additional details available here):

  • Options to conclude agreements and option agreements.
  • Convertible loans.
  • Representations and warranties which may be applied, for example, in business acquisition agreements.
  • Additional rules on avoidance of the agreement and waiver of contractual rights.
  • Rules on negotiating procedures, including an obligation of good-faith negotiations.
  • Non-revocable power of attorney.


On 23 July 2018 the Law on Investment Funds entered into force. This is the first regulation on collective investment schemes in Belarus.

The Law provides for the following types of investment funds: joint-stock and mutual funds. A joint-stock investment fund is a legal entity entitled to independently manage its property intended for investment. In contrast, a mutual investment fund is not as such a legal entity; it is created and managed by a separate management company. A mutual investment fund may be either open or closed, with the main differences in the rights of investors and certain aspects of fund operation.


For years, Belarusian companies were ‒ with rare exceptions ‒ obligated to convert 30 % (and sometimes more) of any foreign currency proceeds into BYN. With a view to liberalising foreign currency trade and stimulating business activity, on 31 July 2018 President Alexander Lukashenko signed a decree to rescind the mandatory sale of foreign currency. This instrument was legislated in the past to ensure availability of foreign currency on the domestic currency exchange. During 2016-2017 the business community gained greater confidence in the Belarusian ruble and started selling sufficient amounts of foreign currency without administrative measures. Though abolition of mandatory sale itself is not likely to influence currency exchange, it illustrates positive trends in the macroeconomic situation in Belarus.


As of 27 July 2018, citizens of 80 countries (full list available via link) can stay in Belarus for 30 days without a visa. The visa-free regime applies to entries via Minsk National Airport, except for flights from Russia. Initially, the visa-free regime was introduced in 2017 and allowed a term of stay no longer than 5 days. The new possibility promptly gained favour among foreigners and facilitated increase in the number of visitors.

At the same time, travellers planning to benefit from the visa-free regime should be aware that it does not apply to those arriving from and departing to the Russian Federation. The rule is due to the absence of border control between the two countries.

In addition, most foreigners have to register their stay in Belarus with the local migration authority within 5 days after their entry date, excluding Sundays as well as state and public holidays. The requirement does not apply to travellers staying less than 5 days.


On 10 July 2018 Belarus and China signed an intergovernmental treaty on visa-free travel for holders of ordinary passports. The treaty entered into force on 10 August. Citizens of both countries will be able to visit the territory of the other party to the treaty for private and business purposes, as well as for tourism. The duration of a single trip should not exceed 30 days, with a maximum period of stay no longer than 90 days within any one year.


The Ministry of Internal Affairs is working on improvements to the procedure for registration of temporary stays in Belarus. Currently, most foreigners travelling to the country for more than 5 days have to register their stay with the local migration authority. The planned changes provide for an extension of the default term up to 10 days, as well as for complete exclusion of the obligation in regard to travellers staying at hotels, sanitoriums, and agritourism centres. In addition, foreigners will be able to register their stay via the state e-service portal. Online registration will be free of charge.


Modus Group receives first EBRD investment in the Belarusian renewable energy sector

A USD 15 million loan aims to finance constructing, equipping and putting into operation four biogas plants with total installed capacity of 4MW to be located in Brest and Grodno regions. The loan is the first investment by the EBRD in the Belarusian renewable energy sector.

Modus Group is an international group of companies currently operating in Lithuania, Latvia, Estonia, Spain, Poland and Belarus in the fields of renewable energy, mobility services, the auto business and real estate.

A Sorainen cross-border team, led by partners Kiryl Apanasevich in Belarus and Augustas Klezys in Lithuania, acted as counsel for EBRD. Our assistance included regulatory and project structuring advice, legal due diligence of the financed operations of the group and transaction advice on Belarusian and Lithuanian law specifics.

Zubr Capital and EBRD jointly invest in Belarus product IT-company Targetprocess

Sorainen assisted the co-investors in their equity investment in the Targetprocess company group, a highly-ranked Belarusian developer of Agile-based project portfolio management systems providing IT solutions to over 1,000 companies from 80 countries worldwide. The company has offices in Belarus, the USA, Germany and the United Kingdom. 

Zubr Capital is the first professional private firm managing private equity funds in Belarus. Targetprocess will form part of the Zubr Capital Fund I portfolio. The EBRD invested through the Venture Capital Investment Programme, a facility specializing in direct equity investment in early and growth-stage technology companies. The programme targets innovative companies with clear vision and potential from 38 countries across the Baltics, Central and Eastern Europe, and other Eurasian regions.

The Sorainen team acted as local counsel for the investors on transaction-related matters, including legal due diligence of the Belarusian entity. The team was headed by country managing partner Kiryl Apanasevich and senior associate Viktoryia Mikhnevich.

Investment fund Baring Vostok acquires minority stake in Belarusian software developer Itransition

Sorainen supported Baring Vostok Private Equity Fund V in connection with acquisition of a minority stake in Itransition, a leading Belarusian software developer with a history of some 20 years and offices in Belarus, the USA, Great Britain and Russia and about 2,000 employees.

The Baring Vostok fund focuses on private equity investments in Russia and the CIS. The Fund currently has over USD 3.7 billion of committed capital and an investor base consisting primarily of pension funds, university endowments, sovereign wealth funds, and funds of funds from North America, Western Europe, Asia, and the Middle East. Since 1994, the Fund has invested over USD 2.8 billion in 80 companies in Russia, Kazakhstan, Ukraine and other countries of the Former Soviet Union.

A Sorainen team led by country managing partner Kiryl Apanasevich and senior associate Viktoryia Mikhnevich conducted due diligence of the Belarusian group and advised on local aspects of the transaction, including those related to corporate and real estate issues.

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