Financial Times & Mergermarket (2008) International Tax Review (2010) International Financial Law Review (2010, 2009) PLC Which lawyer? (2010, 2009) Financial Times & Mergermarket (2008) International Tax Review (2010) International Financial Law Review (2010, 2009) PLC Which lawyer? (2010, 2009) Belarusian News - December 2010 Financial Times & Mergermarket (2008) International Tax Review (2010) International Financial Law Review (2010, 2009) PLC Which lawyer? (2010, 2009)
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Узнайте о последних новостях рынка в Беларуси из нашего 2-го Путеводителя по инвестициям в Беларуси и первого Исследования сделок слияний и поглощений в Беларуси, а также о новых правилах для игорного бизнеса.

Maksim Salahub
Office Co-Managing Partner
Dear clients and cooperation partners,

I am happy to address you again in this last issue of Belarus News in 2010.  One of the clear trends of the finishing year is a notable rise of investment activity in Belarus, especially mergers and acquisitions involving Belarusian enterprises both with and without a state share.  International financial institutions like IFC and EBRD, as well as other foreign and international investors, have become engaged in a significant number of transactions.  Although the declared privatisation campaign has not produced very visible results, more active acquisition of state property and companies may be expected in the upcoming year 2011 and further on.

Besides advising clients on a number of mergers and acquisitions, SORAINEN jointly with its cooperation partners has researched trends and prospects in the M&A market, as well as general development of the legal environment in Belarus.  So we are proud to present you the results of the first Belarus M&A Deal Point Study conducted by the leading law offices of Belarus plus II Belarus Investment Guide produced jointly with the investment banking arm of Alfa-Bank Belarus.  We hope that this information can help answer questions asked by many these days: where is Belarus heading as a developing economy and investment market?  When is the right time to start business in this country?  What are the opportunities and risks?

With all good wishes for a prosperous and rewarding New Business Year 2011,

Maksim Salahub,


SORAINEN and Alfa-Bank Publish Belarus Investment Guide 2010

SORAINEN jointly with Alfa-Bank Belarus Investment Banking produced the Belarus Investment Guide 2010 and presented it at the III Belarus Investment Forum in Frankfurt-am-Main on 17 November 2010.

The Guide is the result of in-depth research into latest trends and prospects in the Belarusian M&A market and legal environment for investment activity.  It contains “nutshell” information about the Belarusian economy based on latest available statistical data, an overview of the most remarkable M&A transactions, and an analysis of economic sectors with the highest appeal and potential.  The section on “Legal Environment for Foreign Investment” describes major forms of investment activity, incentives and privileges available to investors in Belarus and offers a few tips from professional lawyers on how to use the local legal framework to investors’ maximal benefit.

A printable version of the Belarus Investment Guide 2010 may be found here.


Belarusian M&A Deal Point Study

In cooperation with law firms Businessconsult, Magisters, Stepanovski, Papakul & Partners and Vlasova, Mikhel & Partners we have produced the Belarusian M&A Deal Point Study, the first of its kind in the CIS countries. “This is unprecedented cooperation between the leading Belarusian law firms, who joined forces and organised the study as part of a commitment to develop Belarusian practice to the highest international standards,” said SORAINEN partner Toomas Prangli, who also served as a member of the working committee.

The research analysed types of transactions and how parties used transaction processes and clauses to mitigate risks, comparing the results with similar surveys from other regions. The Belarusian study analyses mergers, acquisitions, and joint venture transactions involving targets located in Belarus between July 2008 and June 2010.

Data gathered provided thought-provoking insights on important aspects of M&A transactions. The data show, for instance, that financial services and retail are the industries where M&A transactions have been more frequent, with 25 and 15 percent of the total respectively. As regards transaction value, in most M&A transactions in Belarus the price tag is up to EUR 25 million, with the majority of transactions in the 5 to 25 million range. The study also shows that the period from the start of negotiations until deal completion can be lengthy, as most transaction processes extended for 3 to 12 months, half of them going past the 6 month mark.

Figure 1

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Besides casting light on the characteristics of Belarusian M&A transactions, the study draws interesting conclusions and suggests possible future trends in general. The Belarusian market seems to be familiar with M&A practice most prevalent internationally but its use is sometimes restricted due to local conditions. However, important quality and quantity changes can be foreseen in Belarusian M&A practice in relation to privatisations, investment needs, market diversification and the increased importance of antitrust law.

Collaboration by the participating firms provides very interesting data for further market monitoring and development. The study is a good basis for Belarus M&A Deal Points Studies for coming years. Should you wish more information or the complete study please do not hesitate to contact us or download the study from here. We would be happy to help you explore it.


New Regulations on Gambling Business in Belarus

On 19 November 2010 the President of the Republic of Belarus issued Edict No 599 on Certain Measures to Improve Procedures for Activity in the Gambling Business Sphere.

According to the Edict, starting from 1 January 2011 a gambling business may be run only by legal entities: individual entrepreneurs lose this possibility.

The Edict adjusts the range of restrictions related to location of gambling halls. For example, the total area of a hall cannot be less than 100 m2.; that of a casino – not less than 250 m2. However, this restriction does not concern gambling halls located in three star and higher level hotels. In addition, opening gambling halls is prohibited in buildings where educational institutions, healthcare agencies, or religious organizations are located, or in living premises, offices of state authorities, banks and other socially important objects.

The Edict also sets high standards as to gambling equipment: starting from 1 April 2011 all models of equipment to be used in Belarus will be recorded in a specialised State Register. The programmed average percentage of money wins of a gambling machine should be not less than 90%.

In addition, starting from 1 July 2011 a new computer cash system will be brought into operation. The system will allow full control of financial flows of gambling halls in real-time mode as well as implementation of a “protect the player” program by restricting access to underage and other categories of citizens. 

The Edict also ends the practice of setting tax rates for the gambling business in Euro. From 1 January 2011 rates are set in Belarusian rubles with no differentiation based on the location of the object of taxation or the quantity of gambling equipment.
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