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On privatization

23.01.2012 | 16:48

Investment activity in the Republic of Belarus
 
General legal conditions of performance of investment activity in Belarus are determined by the Investment Code of the Republic of Belarus, which is aimed at stimulating state support of investment activities, as well as protection of the rights of investors in the territory of the Republic of Belarus. For example, the Investment Code of the Republic of Belarus provides guarantees of use of results of investment activities and investment protection.

Foreign investors in the Republic of Belarus in accordance with the Investment Code of the Republic of Belarus shall be recognized:

In accordance with the legislation foreign investors have equal rights with the Belarusian legal entities and individuals.

In accordance with the second part of Art. 51 of the Investment Code of the Republic of Belarus, mineral wealth, waters, forests, lands, as well as objects, which in accordance with the legislation of the Republic of Belarus belong to the exclusive property of the state, may be transferred to the concession, including a transfer to a foreign investor.

In accordance with Article 5 of the Investment Code of the Republic of Belarus investment activities in the Republic of Belarus shall be conducted in the following forms:

in the authorized capital of a legal entity, including the cases of increase of the authorized capital of a legal entity;
According to the Investment Code of the Republic of Belarus the state guarantees to an investor the right of ownership and other proprietary rights, as well as legally acquired property rights, and protects these rights.
The investor is entitled to dispose at his own discretion of profit (income) generated as the result of investment activities, including performance of reinvestment on the territory of the Republic of Belarus in accordance with the legislative acts of the Republic of Belarus.

The foreign investor is guaranteed after payment by him (it) of all taxes and other obligatory payments established by the legislation of the Republic of Belarus an unimpeded transfer out of the Republic of Belarus of belonging to him (it) profit (income) received in the territory of the Republic of Belarus as a result of performance of investment activities including transfer of the proceeds from total or partial disposal of investment property upon termination of the investment activities.

Participation of foreign investors in the privatization of state property In accordance with the Law of the Republic of Belarus “On privatization of state property and the transformation of state unitary enterprises into open joint stock companies” (January 19, 1993 No. 2103-XII, as amended on July 16, 2010) foreign investors are entitled to buy state property in the process of privatization.

In accordance with Article 1 of the mentioned Law of the Republic of Belarus objects of privatization of state property are the enterprises as property complexes of state unitary enterprises, and stocks (shares in authorized capitals) of business entities being in the ownership of theRepublic of Belarus or in the ownership of the administrative-territorial units.

Cooperation with investors in the sphere of privatization is envisaged through the sale of:

Decisions on privatization shall be adopted in respect of privatization objects being in the ownership of:

A seller of the stocks is the State Property Committee of the Republic of Belarus. A tender or an auction is open to all legal entities and individuals, including foreign ones, with the exception of the Belarusian legal persons, whose share of state ownership in the authorized capital is 50 percent or more.

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

Mandatory conditions of the sale for buyers are:

The initial selling price of the enterprise shall be set in the amount of 20 percent of its estimated value. In the case, where the estimated value of the enterprise equals zero or is a negative quantity, its selling price will be one base value.

Buyers will be provided with:

A buyer shall channel monetary funds released due to a deferral (an extension) to financing of investment in capital assets and replenishment of circulating assets of the acquired enterprise.

In addition, in the process of transformation of state enterprises into open joint-stock companies investors may act as another than a State founder of such open joint stock companies, subject to depositing cash and (or) non-cash contributions into authorized capitals.

The selection of other than the state founders is performed by means of holding a competitive tender, and in the event of recognizing the competitive tender as failed due to the fact that an application for participation in the competitive tender was submitted only by one participant — on the results of direct negotiations of a body for privatization with a single participant of the competitive tender.

Тhe Plan of transformation of the republican unitary enterprises into open joint stock companies for the years 2011-2013 are approved by the resolution of the Council of Ministers of the Republic of Belarus of March 21, 2011 No. 348 (as amended on October 01, 2012).

The procedures of holding an auction (a competitive tender) for the sale of objects of privatization, determining of the initial selling price of stocks (shares in authorized capitals) of business entities, as well as holding a competitive tender for selection of other than the State founder are established by the resolution of the Council of Ministers of the Republic of Belarus dated December 31, 2010 No. 1929 “On introduction of amendments and additions to certain laws of the Republic of Belarus and recognizing as ceased to be in force certain legislative acts of the Republic of Belarus and their individual provisions on the issues of privatization of state property”.

The Procedure for disposal of state property (excluding residential buildings and living accommodations) is determined by the Edict of the President of the Republic of Belarus dated July 04, 2012 No. 294 “On the procedure of disposal of state property”.

On the regulation of relations in the field of use of land plots on the territory of the Republic of Belarus.

In the sphere of land relations a step by step sequence of actions of parties concerned and the minimum possible terms for execution of each phase of the withdrawal and granting of land plots is established.

This process is carried out according to the principle of “single window”. An investor is entitled to obtain from a land management organization a full range of services for preparation of necessary land use materials and performance of registration actions.

According to the Edict of the President of the Republic of Belarus dated December 27, 2007 No. 667 “On withdrawing and granting of land plots” land plots for construction of facilities are to be provided on the results of lease auctions held by local executive committees or auctions for the sale of land into private ownership including the sale to non-state legal entities of the Republic of Belarus.

A term of lease of a land plot provided for the construction and (or) maintenance of capital structures, shall be set for the duration not less than the normative period of construction and (or) operation of these capital structures, but it cannot exceed ninety-nine years.

The legislation of the Republic of Belarus also allows obtaining land plots without holding of auctions for such purposes as:

The Land Code of the Republic of Belarus provides the possibility of acquisition of land plot into private ownership by non-state legal entities of the Republic of Belarus without holding an auction for the maintenance of capital constructions (buildings, structures) belonging to them by the right of ownership and located on the land plots acquired by them into private ownership, as well as in other cases determined by the President of the Republic of Belarus.

An investor may be granted an extension of payment for the right to conclude land plots lease contracts or an extension of payment for land plots granted into private ownership by the decisions of regional, Minsk City, city (in cities of regional subordination) and district executive committees.

The legislation also provides for the investor a possibility of stage-wise compensation of loss of agricultural and (or) forestry production associated with the withdrawal of agricultural lands, forest lands upon an application of the person concerned.

Investors are exempt from the compensation of losses of agricultural and forestry production:



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Republic of Belarus
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