LAW OF THE REPUBLIC OF BELARUS
of 29 May 1991
"ON INVESTMENT ACTIVITIES IN THE REPUBLIC OF BELARUS"
The present Law determines general economic, social and legal conditions for investment activities in the Republic of Belarus. It has the aim to protect the rights, interests and property of all subjects of investment activities irrespective of forms of ownership, to ensure effective functioning of the Belarusian national economy on principles of market economy and creation of economic conditions for realization of the Republic's Sovereignty.

SECTION I. GENERAL PROVISION

ARTICLE 1. INVESTMENT AND INVESTMENT ACTIVITIES 1. Investment shall be financial, material resources and other property and intellectual values in objects of entrepreneurial and other types of activity resulting in profit (income) or bringing a social effect. 2. Investment activities shall be the whole complex of practical actions of citizens, legal persons and the State aimed at extended reproduction of fixed and current capital in order to meet needs of the society and its every member on the basis of involvement and investment of all types of property and intellectual values in economic, commercial, scientific, cultural, charitable and any other enterprises and projects the aims of which do not contradict the legislation of the Republic of Belarus.

ARTICLE 2. SUBJECT OF INVESTMENT ACTIVITIES 1. States, Soviet and foreign legal and physical persons may be subjects of investment activities. 2. Investors shall be subjects of investment activities taking decisions on investment activities and making investment. Subinvestors shall be legal and physical persons exercising organization and control over investment activity at each of its stages on an agreement with the investor and acting on his behalf. Subinvestors within the limits of rights they are vested with may conclude unilateral and multilateral agreements (contracts) with participants of an investment project, supervise their execution, accept completed work and realized services, make payments for them, exact penalties, solve other problems and bear responsibility as to their obligations relative to the investors and other participants of investment activities. 3. Participants of investment activity shall be subjects who obtained in conformity with the procedure established by law the right to take part in this activity as executors of investor's order and instructions.

ARTICLE 3. OBJECTS OF INVESTMENT ACTIVITIES 1.

Objects of investment activities shall be newly organized and modernized capital funds and current assets in all branches of the economy, securities, intellectual values, products of science and technology as well as property rights. Land and other natural resources in their value (monetary) form may also be objects of investment activities. It shall be prohibited to invest in objects, creation and use of which do not meet the norms of security, sanitation, hygiene, ecology, and in other cases, specified by legislation of the Republic of Belarus.

ARTICLE 4. SOURCES OF INVESTMENT ACTIVITIES IN THE REPUBLIC OF BELARUS 1.

Investment activities in the Republic of Belarus may be effected for account of: - proper financial resources and economic reserves of an investor (profit, depreciation expenses, monetary accumulations, savings, reimbursement of insurance settlement amounts, etc.); - loan financial resources of investors (bond loans, bank and budgetary credits); - attracted financial resources of investor (resources raised from sales of shares, share and other contribution of labor team members, physical and legal persons); - budgetary investment allocations; - pecuniary assets of enterprises centralized by associations in the order established by them; - resources obtained from charities; - monetary resources of population. 2. Investment in both monetary and non-monetary (natural-commodity) form may be a source of the statutory investment fund (ownership capital). Foreign investors may make monetary investments either in foreign currency or in roubles obtained as a result of both currency exchange in the order established by legislation and economic activities on the territory of the Republic of Belarus and other Union republics. The minimum investment to be made by foreign investor in the statutory fund (ownership capital) shall be 20,000 US dollars. Following roubles exchange fluctuations the minimum investment in the statutory fund in the US dollars shall be corrected. Correctness of assessment of non-monetary investment in the statutory fund may be subjected to examination by expert in the manner established by the Council of Ministers of the Republic of Belarus.

ARTICLE 5. LEGISLATION ON INVESTMENT ACTIVITIES 1.

Relations connected with the investment activities on the territory of the Republic shall be regulated by the present Law, other statutory acts of the Republic of Belarus, international agreements and covenants. Relations not regulated by the legislation of the Republic of Belarus may regulated by that of the USSR. 2. Investment activities of Belarusian subjects abroad and in other Republics shall be regulated by the legislation of a State or a Republic, on the territory of which this activity is carried out, as well as by international agreements and covenants.

SECTION II. RIGHTS AND RESPONSIBILITIES OF PARTIES IN INVESTMENT ACTIVITIES ARTICLE 6. RIGHTS OF INVESTORS 1.

All investors irrespective of forms ownership and types of investment activity shall enjoy equal rights in carrying out this activity unless otherwise specified by the present Law and other statutory acts of the Republic of Belarus. Volumes, directions and efficiency of investment shall be determined by the investor himself. 2. Possession, use and disposal of the objects and investment, owned by an investor, including reinvestment shall be considered his inherent right and shall be protected by law. The investors shall realize their rights to ownership of investment object and result of investments after they pay in accordance with agreements the cost of invest activity results. 3. An investor or acting on his behalf subinvestor may at his own discretion enlist in investment activities on an agreement (contract) basis legal and physical persons. An investor shall enjoy the right to organize tenders and contest to involve legal and physical persons in investment activities. 4. An investor may on an agreement basis in accordance with the legislation of the Republic of Belarus transfer his right to possess, use and dispose of investment and their result to a subinvestor or other legal and physical persons. 5. An investor may use property as a guarantee for all types of his obligations in accordance with the legislation of the Republic of Belarus. Only property, owned by an investor in accordance with the proprietary right, may be pledged. In case of violation of pledge obligations pledged property may be realized in the legally established manner. 6. An investor shall have the right to purchase property he is in need of from legal and physical persons directly or through mediators at prices and on conditions determined by agreement between the parties without restrictions as to the volume unless otherwise established by legislation of the Republic of Belarus. 7. Soviet and foreign investors may carry out investment activities independently or jointly. 8. Excluded in accordance with "The Law on the Amendment of the Law on the Investment Activities in the Republic of Belarus" (April 24, 1992). 9. A foreign investor shall determine himself the country of investment activities risk insurance. 10. Subject of investment activities may deposit their money in the manner and on conditions specified by laws of the Republic of Belarus "On the National Bank of the Republic of Belarus" and "On Banks and Banking in the Republic of Belarus". 11. Legislation of the Republic of Belarus may determine the object investments wherein shall not result in acquisition of the rights to ownership of them, but shall not exclude a possibility of subsequent possession, use and disposal of them within the limits of powers determined by an owner or law and participation of investors in the income from operation of these object.

ARTICLE 7. RELATIONS BETWEEN SUBJECTS OF INVESTMENTS ACTIVITIES

1. The main legal document regulating relations between subjects of investment activities shall be an agreement (contract), concluded on principles of voluntariness and equality. Conclusion of Agreements (contracts), selection of partners, determination of obligations and conditions of economic relations not contradicting the legislation of the Republic of Belarus, shall be within the exclusive competence of the subject of investment activities. Interference of State bodies and officials in contractual relations between the subjects of investment activities shall not be tolerated.

2. An investor (a group of investors) in accordance with the agreement may impose the organization and execution of investment activities on a subinvestor.

3. Terms and condition of agreements concluded by subjects of investment activities shall remain in force throughout the entire period of validity of agreements. Changes in contractual terms, cancellation of a contract shall be effected by agreement of the parties. Terms and conditions of an agreements shall also remain in force during the entire period of its validity in cases, when after its conclusion rules impairing the position of the subjects have been established by legislation unless otherwise specified in the agreement. An agreement may be cancelled at request of one of the contracting parties by a decision of the court in accordance with its authority.

ARTICLE 8. RESPONSIBILITIES OF SUBJECT OF INVESTMENT ACTIVITIES

1. An investor in cases and in the manner established by the Council of Ministers of the Republic of Belarus shall submit a declaration of volumes and sources of investment made by him to the financial bodies.

2. The investors shall obtain: - licenses to investment activities; - commissions of experts resolutions for the investment projects in accordance with the legislation in force. Types of investment activities to be licensed and the licensing procedure shall be determined by the Council of Ministers of the Republic of Belarus.

3. Subjects of investment activities shall be obliged to: - observe norms and standards established in accordance with the order determined by the legislation of the Republic of Belarus and the USSR. - fulfil requirements of State organs and officials made within their authority; submit in the established manner accounting and statistic reporting.

4. Subjects of investment activities, performing works requiring appropriate attestation of personnel, shall have a license to do these works.

SECTION III.
STATE REGULATION OF INVESTMENT ACTIVITIES

ARTICLE 9. AIMS AND FORMS OF STATE REGULATION OF INVESTMENT ACTIVITIES

1. State regulation of investment activities shall be effected for the purpose of realizing the economic, scientific-and-technical, social, nature-conservancy policy. It shall be determined on the basis of national economy development programs approved by the Supreme Soviet of the Republic of Belarus, State Budget of the Republic of Belarus, and state financing volumes envisaged therein.

2. State regulation of investment activities shall be effected by: - State organs of the Republic of Belarus by working out guidelines for social-and-economic development of the Republic, republican and mutual programs, by forming together with organs of the Union and Autonomous republics on a voluntary basis regional development, reserve, innovation, nature-conservancy and other funds; - local Soviet of People's Deputies by working out and approval of social and economic development plans of territories within their authority, coordination of investment programs, authorization and coordination for construction of enterprises, buildings and installations, rational use of natural resources and preservation of the environment within the respective territory. Local Soviets shall determine themselves guidelines for investment activities in the local economy, establish in accordance with the legislation in force unified territorial standard requirements as to the development of infrastructure.

3. Projects of Republic-scale special-purpose complex investment programs shall be worked out in the manner determined by the Council of Ministers of the Republic of Belarus with participation of local Soviets concerned, State organs and public associations. Projects of Union-scale special-purpose complex programs envisaging investment in the territory of the Republic of Belarus shall be considered by local Soviets concerned, State organs and public associations of the Republic of Belarus. Projects of the Republic-scale special-purpose complex investment programs shall be submitted for consideration to the Supreme Soviet of the Republic of Belarus, unless otherwise specified by the legislation of the Republic of Belarus.

4. The Supreme Soviet of the Republic of Belarus shall approve capital investment in creation of large-scale economic complexes included in the list of the State order objects, as well as volumes of the Republic's state investment.

ARTICLE 10. METHODS OF STATE REGULATION OF INVESTMENT ACTIVITIES 1. State regulation of investment activities shall include State investment administration, as well as regulation of conditions and supervision of investment activities.

2. State investment administration shall be effected mainly by economic methods and shall include planning, specification of conditions and carrying out specific actions of investing from budgetary and non-budgetary funds, other means involved on a voluntary basis.

3. State regulation of conditions and supervision of investment activities shall be effected by means of: - a system of taxes with differentiation of tax objects and subject, tax rates and privileges. A differentiated investment tax may be imposed by the Supreme Soviet of the Republic of Belarus for the purpose of regulating the investment demand; - depreciation policy, including accelerated depreciation of capital funds. Depreciation privileges may be differentiated for separate branches of economy, elements of fixed assets, types of equipment; - rendering financial assistance for the development of separate regions, branches of economy, factories; - credits and prices; - state norms and standards; - anti-monopoly measures; - determining conditions for the use of land and other natural resources; - denationalization and privatization of the Republic's and communal property.

4. Use of other methods of regulating investment activity conditions shall not be tolerated, except for the cases of investment activities being carried out with the purpose of liquidation of large-scale disasters and catastrophes.

ARTICLE 11. PROCEDURES FOR REGULATION OF REPUBLICAN STATE INVESTMENT IN SECURITIES

1. The amounts of republican state investment in securities shall be approved by the Supreme Soviet of the Republic of Belarus. 2. Regulation of investments in securities shall be effected by creating a market of securities (shares,, bonds, treasury obligations and others). 3. Participation of the Republic of Belarus in the world system of investment activities shall be secured by use of currency assets available.

ARTICLE 12. EXAMINATION AND APPROVAL OF INVESTMENT PROJECTS AND PROGRAMS

1. Investment projects and programs implemented at the expense of state investment shall be liable to compulsory state examination and approval in the manner established by the Council of Ministers of the Republic of Belarus. Representatives of scientific, public and other organizations, as well as foreign specialists, if need be, shall be enlisted in examination of the most important projects and programs.

2. Projects, feasibility studies and expediency of construction of installation at the expense of own and attracted means of legal and physical persons shall be liable to compulsory state examination as to the observance of standards of reliability, fire and explosion safety, rational use of fuel, power, raw materials and natural resources, as well as town-planning, social, ecological and sanitary-and-hygienic requirements. An investor may at his own discretion organize additional project examination enlisting on an agreement basis state and other expert organizations.

ARTICLE 13. STATE SUPERVISION OF COMPLIANCE TO NORMS AND STANDARDS

State supervision of compliance to norms and standards in investment activities shall be effected by the State bodies in the order established by the legislation of the Republic of Belarus.

ARTICLE 14. REALIZATION OF PRODUCE 1.

Subjects of investment activities shall realize their produce (works, services) in accordance with agreements signed at prices (tariffs), established on agreement with the customer taking into account the legislation on prices in the Republic of Belarus. 2. Acceptance of projects into operation shall be effected in the manner established by the Council of Ministers of the Republic of Belarus. 3. Realization and purchase of products and services on the territory of the Republic of Belarus by subject of investment activities including legal persons with foreign participation shall be carried out in roubles and freely convertible currencies.

SECTION IV.
GUARANTEES OF RIGHTS AND PROTECTION OF INVESTMENT

ARTICLE 15. GUARANTEES OF RIGHTS OF SUBJECTS OF INVESTMENT ACTIVITIES 1.

The State shall guarantee stability of rights of subjects of investment activities. If any acts violating the rights of investors and participants in investment activities are adopted by state organs, the losses, caused to the subjects of investment activities as a result of adoption of these acts, by a decision of courts within their authority shall be compensated by the organs that have adopted the illegal act. If the State organ lacks sufficient assets, the losses shall be compensated for by the Republic, a local Soviet, whose organ has adopted the act. The amount of reimbursement shall be determined within the scope of actual losses and compensated to the investor within the period of three months in the currency of initial investment. 2. A foreign investor shall be guaranteed the proprietary right to foreign currency due to him as a result of distribution of income, including ins transfer abroad, as well as return of investment in this currency in case of liquidation of a joint venture or his secession from it. 3. Cessation or suspension of investment activities shall be undertaken by decision of: - investors; in this case the investors shall compensate for the losses to the investment activity participants; - a competent State organ. A decision of a State organ on cessation or suspension of investment activities may be taken in case of: - declaration in the legally established manner of an investor bankrupt because of his insolvency; - if in process of investment activity it became obvious that its continuation will result in violation of established by legislation security, sanitary-and-hygienic, ecological standards, protected by law rights and interests of citizens, the State and legal persons. Procedure of compensation for the losses caused to participants of investment activity shall be established by the legislation of the Republic of Belarus. 4. Customs duty privileges may be established for foreign investors on property imported not for sale but as an investment in the statutory fund, or as their personal belongings.

ARTICLE 16. RESPONSIBILITY OF SUBJECTS OF INVESTMENT ACTIVITIES

In case of nonobservance of contractual commitments, including unilateral alteration or cancellation of an agreement, as well as in case of violation of norms and standards, the party to blame shall bear proprietary and other responsibility as provided for in the legislation of the Republic of Belarus and the agreements signed. Payment of penalties and fines for violation of contractual terms and conditions, as well as compensation for the caused losses, shall not exempt the party to blame from fulfilment of its obligations, unless otherwise specified by the agreement.

ARTICLE 17. PROTECTION OF INVESTMENT 1.

The State shall guarantee protection of investment irrespective of forms of ownership. Protection of investment shall be ensured by the legislation of the Republic of Belarus, as well as by interstate and mutual republican agreements. In this respect equal conditions shall be provided to the investors, excluding discrimination measures, that could interfere with administration of investments, their use and liquidation. 2. Property of the investors on the territory of the Republic of Belarus may and, in cases provided for by the legislation of the Republic of Belarus, should be insured. 3. Investment may not be nationalized or expropriated without compensation. Compensatory expropriation in each case shall be effected only on the basis of statutory acts of the Republic of Belarus. 4. Disputes occurring as a result of investment activities shall be liable to consideration either in the courts of justice or courts of arbitration.

SECTION V.
INVESTMENT ACTIVITIES ON THE BASIS OF CONCESSION

ARTICLE 18. CONCESSIONS 1. Activities of an investor on the territory of the Republic of Belarus may be carried out on the basis of concessions. A concession granted shall exempt the investor from a necessity to obtain a license for activity on the territory of the Republic of Belarus within the object of concession. 2. In investment activities connected with the development of natural resources on the territory of the Republic of Belarus, use of installations owned by the State a concession shall be compulsory. Procedures for granting concessions shall be determined by the Supreme Soviet of the Republic of Belarus.

Chairman of the Supreme Soviet of the Republic of Belarus
N.Dementei May 29, 1991 Minsk

 

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