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Legal Regulation of Incorporation and Activity of Commercial Organizations with Participation of Foreign Investors in the Republic of Belarus 

by Aleksei Filonov, Nikita Trosko

Published: March, 2017

Submission: March, 2017

 



Incorporation of Commercial Organizations

Types of commercial organizations


Regulation of incorporation and functioning of organizations is carried out on the basis of the following acts of legislation: the Civil Code of the Republic of Belarus dated 07.12.1998 with further changes and amendments (hereinafter - the “Civil Code”), Law of the Republic of Belarus “On Companies” in the wording of 10.05.2010 with further changes and amendments, Regulations on state registration of economic entities approved by Decree of the President of the Republic of Belarus of 16.01.2009  N 1.


Foreign investors are empowered to incorporate commercial organizations with any amount of foreign investment and in any legal forms stipulated by the legislation of the Republic of Belarus, namely in the form of:


  • unitary enterprise (UE),
  • limited liability company (LLC),
  • additional liability companies (ALC),
  • joint-stock companies (JSC) - closed joint-stock company (CJSC) or open joint-stock company (OJSC).

 


It is necessary to allocate such legal form as UE. This is a special form of legal entity, which inherent to the legislation of Republic of Belarus. In contrast to other forms of legal entities (hereinafter referred to collectively and in particular the "Company") UE does not owner of assets on its balance sheet. All assets of any unitary enterprise is owned by its founder and belong to UE by virtue of the right of commercial management.


All types of commercial organizations (with the exception of a unitary enterprise) can be incorporated both with a sole or several incorporators.


Specific Features of Participation of Legal Entities and Individuals in Companies


Shareholders of a Company from the Belarusian side may be both non-state entities and state legal entities.


In order to participate in the creation of Company state unitary enterprise must obtain the decision (approval) of the Ministry, state committee or any other state agency depending under which control Company exists. Moreover, depending on the value and kind of property, to be contributed to the charter capital of the Company by the state enterprise, subordination of such state enterprise, coordination of contribution of the property to the charter capital by other state authorities may be required. Thus, where state enterprise intends to contribute buildings or other objects of non-completed construction to the charter capital as its contribution, it must obtain the approval of relevant state agency and the State Committee on Property or Council of Ministers of the Republic of Belarus (for republican property) or approval of the respective local agency (for municipal property). 


When dealing with the state enterprise as the partner of a Company it is necessary to take into account the possibility of its further privatization. However, there is no legal restrictions for the participation of state enterprises in a Company in connection with the process of their privatization.


Shareholders of the Company on the Belarusian side may be represented by both: legal entities and individuals. It should be noted that according to the legislation of the Republic of Belarus officials employed in the bodies of state administration, executive committees of the Soviets of deputies, public prosecutor's offices and courts, as well as heads, deputy heads and main specialists of the state enterprises, organizations and institutions are not allowed to carry out business activities including participation in a Companies.


Foreign investors may be represented by individuals, stateless persons not permanently residing in the Republic of Belarus, citizens of the Republic of Belarus permanently residing outside the Republic of Belarus, foreign and international legal entities engaged in the investment in the territory of the Republic of Belarus.


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We will be happy to provide any further information or assistance should you are interested in the above procedures.


Please contact VMP corporate practice team partner Svetlana Dashuk (svetlana.dashuk@vmp.by) or senior associate Natalia Talai (natalia.talai@vmp.by).


 


 

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