Recent legal & business developments in Belarus, October 2010
1) Acceptance of the directive № 4 on liberalization in the sphere of economics is expected in Belarus. Draft Directive consists of nine patterns, which include a number of collateral measures. In particular the Directive encompasses such questions as a guarantee of single interpretation and stable legislation, creation of conditions for development of competition between companies of different legal structures, provision of guarantees on property rights, simplification of administrative procedures, harmonization of tax system, decrease of authority for supervisory bodies, development of micro financing system and labor market as well as modeling of state-public partnership.
Some aspects on draft directive:
Belarus might move to free price formation for majority of goods and services. In accordance with the draft directive it is necessary to provide amendments to normative legal acts on price formation until 1st March 2010. The exception regards a minimal list of goods (works and services) established by the President of the Republic of Belarus in relation to the products, goods of monopolist organizations.
Electronic registration for business entities can be introduced in Belarus. For this purpose the Ministry of Justice and the Ministry of Communications shall create an internet portal of the Unified State Register via which one may implement electronic registration of business on terms of open and free policy. The draft also contemplates the introduction of declarative principle not only for registration of entities but for their liquidation as well.
In accordance with the draft directive non-state companies might be admitted to the realization of obligatory kinds of insurance. So far only the insurance companies where more than 50% of shares of their statutory fund belong to state are allowed to carry out obligatory kinds of insurance.
The document adoption is expected on the eve of Belarus Public Assembly which is planed to take place on the 6th -7th of December. However, experts forecast the delay of directive realization for a year or even more.
2) Group of companies “Aljuteh”, the leader of roller market in Eastern Europe and leading producer of sectional gates and aluminum elevation systems in CIS is engaged in investment project realization in relation to the extension of company’s manufacturing capabilities. Total value of the project is 50 million euros
3) Embassy of the Republic of Belarus will be open in Tajikistan in 2011 year. Opening of Belarusian diplomatic mission will contribute to the development of integrated cooperation with Tajikistan.
4) CBT Development (Logistics) Limited (Hong Kong, PRC) has obtained an authority to represent Belarus interests on the issues of investment attraction. СВТ Development (Logistik) Limited was specially created for realization of project on construction of transport and logistics center on the territory of aircraft repairing plant of Orsha (Belarus). The Company was created by Singaporean public investment fund in the sphere of real estate property and by private investment fund in the sphere of infrastructure, real estate and telecommunications.
Belarusian Government has stated that this project is to take up a part of transit traffic from Moscow airport “Domodedovo” and to share international connection traffic going through Belarus along the lines East-West, West-East. In accordance with the investment agreement the center must be put in commission by 2013 year.
5) Telekom Austria Group has bought remaining shares of Velcom. On October 2007 Telekom Austrian Group (TAG) acquired 70% of SB Telecom Limited shares (the sole owner of Velcom Company) for 730 million euros. Three years later in October 2010 TAG bought remaining 30% belonging to SB Telecom stock for 335 million euros. During last transaction Telecom Austrian Group has completed acquisition of Velcom Company.
6) The Ministry of Taxes and Collections is planning to introduce single rate of income tax for all tax bearers in Belarus. Nowadays income tax rate for physical persons is 12%, for individual entrepreneurs -15%.
