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State Committee on Property of the Republic of Belarus State Committee on Property of the Republic of Belarus Государственный комитет по имуществу

Sale of Enterprises as Property Complexes



In accordance with Article 1 of the Law of the Republic of Belarus “On privatization of state property and reorganization of state unitary enterprises into joint stock companies (No. 2103-XІІ, 19 January 1993, edited on 16 July 2010, hereinafter referred to as the Law on Privatization):

Privatization of state property shall mean the sale of objects of privatization to subjects of privatization in the manner and terms stipulated by the law.

Objects of privatization shall mean enterprises as property complexes of state unitary enterprises.

Major principles of privatization as stipulated by the Law on Privatization: 

  • legality
  • planned nature and consistency
  • openness, transparency and broad public awareness on issues of privatization and reorganization of state unitary enterprises into joint stock companies
  • equality of subjects of privatization
  • compensatory nature of alienation of objects of privatization by subjects of privatization;
  • respect for and protection of the rights of owners;
  • promotion of efficient socially-oriented market economy.

Privatization plans shall be compiled for a period of three years and shall be approved: 

  • by the Council of Ministers of the Republic of Belarus with approval by the President of the Republic of Belarus in respect of objects of privatization owned by the Republic of Belarus;
  • by local executive authorities in respect of objects of privatization owned by relevant administrative and territorial units in the manner prescribed by the local councils of deputies.

For an enterprise to be privatized as property complex at an auction (tender), a privatization authority shall set up a commission for privatization, which shall: 

  • identify the assets of the enterprise to be privatized as property complex;
  • identify debtors and creditors of the state unitary enterprise;
  • prepare proposals for the further use of social objects, objects that are the exclusive property of the state, objects that are owned by the state only, and residential facilities that make part of the state housing stock;
  • determine the estimated value of the enterprise as property complex;
  • estimate the initial sale price, terms of sale (in case of an auction) of the enterprise as property complex;
  • organize other works connected with the privatization of the enterprise as property complex.
  • a privatization authority shall prepare a draft regulation on the privatization of the enterprise as property complex based on the opinion of a commission for privatization.

After determining the assets of the enterprise to be privatized as property complex and before a decision on its privatization is made, the general manager of the state unitary enterprise shall formalize, in accordance with the law, state registration of the enterprise as property complex and the rights to it. 

In the event of sale of an enterprise as property complex through an auction (tender), its initial sale price shall equal its estimated value, unless otherwise decided by the President of the Republic of Belarus, provided that the enterprise employs no more than 100 people and it outstanding financial liabilities on the date of determining the estimated value of the enterprise as property complex equal or exceed the book value of the assets.
   
The estimated value of an enterprise as property complex shall be determined on the first day of the month and shall be valid for 12 months from the date on which it is determined.

The estimated value of an enterprise as property complex shall be established in the manner prescribed by the regulations on the procedure for determining the estimated value of an enterprise as property complex of a state unitary enterprise in case of privatization, the size of the authorized fund of the joint stock company established in the process of reorganization of a state unitary enterprise, and the value of the assets of the state unitary enterprise that becomes part of a joint stock company. The regulations were introduced by Resolution No.1 of the State Property Committee of the Republic of Belarus of 4 January 2011 “Concerning some measures for the implementation of Law of the Republic of Belarus of 16 July 2010 ‘On the introduction of amendments and additions to certain laws of the Republic of Belarus and invalidation of certain legislative acts of the Republic of Belarus and their individual provisions on the privatization of state property’.”

In the event of sale of an enterprise as property complex through an auction (tender), its initial sale price shall equal one base amount on the day of the auction established in accordance with the legislation, provided that the enterprise employs no more than 100 people and it outstanding financial liabilities on the date of determining the estimated value of the enterprise as property complex equal or exceed the book value of the assets.


Privatization decisions shall be made:

  • by the President of the Republic of Belarus or by an authorized government body in respect of the objects of privatization that are property of the Republic of Belarus;
  • according to the procedure established by the local councils of deputies in respect of the objects of privatization that are property of administrative and territorial units. In cases prescribed by law, privatization decisions shall be adopted with approval by the President of the Republic of Belarus. Objects of privatization shall be sold through public auctions (tenders) for monetary funds only. Sale of enterprises as property complexes shall be carried out through auctions when the buyer is required to meet certain conditions stipulated in the privatization decision.
   
Decisions on privatization of enterprises as property complexes through an auction (tender) may contain the following conditions:

  • amount, period and target of investment;
  • preservation and (or) creation of a certain number of jobs over a certain period of time;
  • retraining and (or) advanced training of workers;
  • keeping the range of products (works, services) unchanged for a certain period of time;
  • keeping the business profile of the state unitary enterprise unchanged for a certain period of time;
  • other conditions.

In the event of sale of an enterprise as a property complex through an auction (tender) with the initial sale price equal to one base amount, the owner of the enterprise to be privatized as property complex shall discharge the financial liabilities of the state unitary enterprise, the property complex of which he has acquired. The owner shall preserve a certain number of jobs, ensure proper production and economic operation of the enterprise, and meet other terms and conditions of the purchase and sale agreement.

The payment for the object of privatization shall be made no later than 30 days from the date of conclusion of the purchase and sale agreement, unless otherwise indicated in the privatization decision.

A loss-making state organization may be sold to a legal entity through an auction (tender) in the process of privatization in accordance with Decree No.113 of the President of the Republic of Belarus of 25 February 2008 “Concerning the procedure and conditions of sale to legal entities of enterprises as property complexes belonging to loss-making state organizations.”


Buyers shall fulfill the following mandatory terms:

  • implement an investment project, social programs for the staff;
  • assume the outstanding liabilities of the loss-making state organization;
  • retain jobs, create additional jobs in accordance with the investment project.

The initial sale price of the enterprise shall be set at 20% of its estimated value. If the estimated value of the enterprise is equal to zero or below zero, the sale price shall make up one base amount.

Buyers shall be provided with: 

  • a three-year grace period on the payment of taxes, fees (duties) to the national budget, customs payments; the repayment of public loans, including interests on them, and budget loans;
  • a three-year installment plan to pay taxes, fees (duties) to the national budget, a six-year installment plan on customs payments and a two-year installment plan on mandatory contributions to the Social Security Fund. Funds freed within the grace period (the installment plan) shall be used to finance capital investment and replenish the working capital of the enterprise.

Those interested in privatization are invited to apply to the State Property Committee of the Republic of Belarus at: 12 Pereulok Krasnozvyozdny, Minsk
Phone:
+375 (17) 288-11-52,
+375 (17) 294-07-49,
+375 (17) 294-46-76