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18 January 2024, 17:06

Upcoming changes in asset disposal rules for companies with foreign capital in Belarus explained

Yuri Chebotar
Yuri Chebotar
MINSK, 18 January (BelTA) – A draft document, which introduces a number of innovations for owners from unfriendly countries willing to dispose of their assets, was discussed during the head of state’s conference with top-ranking government officials on 18 January. After the conference Belarusian Economy Minister Yuri Chebotar told reporters how the current approaches will be adjusted, BelTA has learned.

Today these matters are regulated by Belarus president decree No.93 of 14 March 2022 “On additional measures to ensure the stable functioning of the economy” (it was amended in October 2023) and the law on applying special restrictive measures. In line with the effective legislation no company with a share of foreign capital (an owner from an unfriendly country) can sell its property without a special permission from the government and without paying a fee to the state budget.

Yuri Chebotar stressed the government does not intend to scrap this approach. But practice indicates that the rule sometimes negatively affects current operations of banking, leasing, and construction companies.

For instance, a bank may grant a loan to a citizen against the security of real estate. If the bank repossesses the real estate in the end, the bank needs to sell it in order to compensate for the losses caused by the defaulted loan. But if the bank sells the assets, it has to pay a fee as large as 25% of the cost on top of that. In the end all the extra costs are shifted to clients, who are ordinary people.

Foreign real estate developers are in the same situation. According to existing rules, they can sell the houses they build to citizens only after paying a fee as large as 25%. But a real estate developer is likely to pass on the extra costs to its customers.

The government suggests adjusting these rules to introduce a more flexible approach to property sales by owners from unfriendly countries.

“We call it polishing the mechanisms designed to protect Belarus’ interests. As a result of the government conference the head of state instructed the government to work out an exhaustive list of such situations and respectively make the relevant decisions. Such situations will be excepted from the rules,” Yuri Chebotar noted.

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