THE LAW OF THE REPUBLIC OF BELARUS

November 14, 1991

ON FOREIGN INVESTMENT ON THE TERRITORY OF THE REPUBLIC OF BELARUS
The present Law shall regulate foreign investment on the territory of the Republic of Belarus and shall be intended to create conditions for attracting and using funds of foreign investors for the purpose of development of the Republic's economy. The provisions of the present Law shall be effective on the territory of the Republic of Belarus and apply to all foreign investors and enterprises with foreign investment. Chapter 1.

General Provisions Article 1.

Foreign Investment Foreign Investment shall be financial and material means invested by foreign artificial or physical persons into various objects of activity, as well as the rights to proprietary or intellectual ownership transferred to economic subjects of the Republic of Belarus for the purpose of getting profits (income) or achieving some social effect.
Article 2. Objects of Foreign Investment Objects of foreign investment on the territory of the Republic of Belarus may be represented by: - any enterprises and organizations engaged in such activities as not prohibited on the territory of the Republic; - buildings and constructions, property of Belarusian legal and physical persons; - shares, bank deposits, insurance policies and other securities and funds; - scientific and technical products; - rights to intellectual values; - other property and acquired proprietary rights, including the rights to use land and other natural resources of the Republic for the purpose of performing their activities.
Article 3. Subjects of Foreign Investment Foreign Investors on the territory of the Republic of Belarus may be represented by foreign States, incorporations, international organizations, foreign legal and physical persons, as well as citizens of the Republic of Belarus permanently residing abroad.
Article 4. Organizational and Legal Forms and Types of Foreign Investment The Forms of foreign investment on the territory of the Republic of Belarus may be as follows: - sharing in enterprises jointly established with Belarusian legal and physical persons; - establishing enterprises fully owned by foreign investors; - acquiring enterprises, buildings, constructions, shares and other securities; - acquiring rights to the use of land and other natural resources, as well as other proprietary rights; - any other forms of economic and other activities not contradicting the legislation in force on the territory of the Republic of Belarus.
Article 5. Legal Status of Enterprises with Foreign Investment and Foreign Investors Enterprises with foreign investment and foreign investors shall perform their activities in such an order as provided by the Laws on enterprises, entrepreneurial and investment activities, by other Laws of the Republic of Belarus, taking into account the provisions set by the present Law and international treaties of the Republic of Belarus.
Chapter 2. Establishment and Functioning of Enterprises with Foreign Investment
Article 6. Enterprise with Foreign Investment The enterprise with foreign investment shall be an enterprise with its ownership capital partially ( a joint venture) or entirely (a foreign enterprise) composed of foreign capital. The joint venture on the territory of the Republic shall be an economic subject of the Republic of Belarus with its ownership capital shared in by a foreign investor and legal persons of the Republic of Belarus. The foreign enterprise shall be an enterprise or organization established as a legal person in accordance with the legislation of the Republic of Belarus and 100 per cent owned by foreign investors. Enterprises with foreign investment shall be legal persons of the Republic of Belarus.
Article 7. Establishment of Enterprises with Foreign Investment An enterprise with foreign investment may be founded either by its establishment or as a result of acquiring by a foreign investor a participation (a share, stocks) in a previously established enterprise without foreign investment, or of acquiring such an enterprise into his full ownership. An enterprise partially or completely acquired by a foreign investor shall be reorganized in the order stipulated by the legislation with further registration according to the present Law. Joint ventures shall be established in the form of joint stock companies, limited liability companies and other types of economic companies and corporations, as well as in other forms not contradicting the legislative acts of the Republic of Belarus. A joint venture shall be established on the basis of a memorandum of association signed by the participants of such an enterprise. The decision to establish a joint venture or a foreign enterprise shall be taken by its participants on their own. If the Belarusian participant is an enterprise owned by the State or a public organization the decision to establish a joint venture shall be taken by its participants with the consent of the owner of the property or a body authorized by the owner. Specific details for establishing an enterprise fully owned by a foreign investor shall be determined in accordance with the procedure adopted by the Council of Ministers of the Republic o Belarus.
Article 8. Establishment of Subsidiary Enterprises, Affiliations, Other Separate Branches and Representation Offices of Enterprises with Foreign Investment, their Status An enterprise with foreign investment, may use its own funds in accordance with the adopted procedure, to establish subsidiary enterprises with the rights of a legal person, as well as affiliation and representation offices on the territory of the Republic of Belarus and outside its borders, on condition of observing the terms provided by the legislation in force on the territory of the Republic of Belarus and the corresponding legislation of foreign States. Enterprises founded by foreign enterprises shall exercise the same rights and be registered by the same body as the founding ones. Enterprises founded by joint ventures shall be registered in the order stipulated for enterprises without foreign investment and shall not exercise any privileges granted to enterprises with foreign investment. Affiliation and representation offices of enterprises with foreign investment shall function on the basis of regulations on these offices adopted by the enterprise with foreign investment. They shall open accounts in authorized banks. Affiliation and representation offices and other separate units shall not be legal persons on the territory of the Republic of Belarus. Enterprises with foreign investment registered outside the Republic may establish on the territory of the Republic of Belarus only subsidiary companies with the rights of a legal person.
Article 9. State Registration of Enterprises with Foreign Investment and Participants in Foreign Economic Activities The State registration of enterprises with foreign investment as a legal person and a participant in foreign economic activities shall be done by the State Committee of the Republic of Belarus for Foreign Economic Relations or by another authorized State body which within a ten day period shall inform the Ministry of Finances of the Republic of Belarus and the State Committee of the Republic of Belarus for Statistics and Analysis about the registration data to have them included into the State roster and register of the Republic of Belarus. Banks and other financial institutions with foreign investment shall be subject to registration with the National Bank of the Republic of Belarus. The State registration of enterprises with foreign investment shall be done with the consent of the local Soviet of People's Deputies within its competence and in case the following documents are submitted: 1) for joint ventures: a) a written application of institutions with a request to register the established enterprise; b) two notarized copies of the establishing documents; c) for Belarusian legal persons - a notarized copy of the decision of the owner of property to establish the enterprise or a copy of the decision of the body authorized by the owner, as well as notarized copies of the establishing documents for each Belarusian person participating in establishing the joint venture; d) - deleted; e) extract from the register of the country of origin or other equivalent proof of the legal status of the foreign investor in accordance with the legislation of the country of its temporary or permanent residence (with a notarized translation into the Belarusian language); 2) for foreign enterprises: a) a written application of the foreign investor for registration; b) a notarized copy of the establishing documents (in two copies); c) - deleted; d) extract from the trade register of the country of origin for the foreign investor (with a notarized translation into the Belarusian language). The registration period for an enterprise with foreign investment should not exceed 30 days starting from the day of submitting the application and the documents needed for the registration. An enterprise with foreign investment shall acquire the rights of a legal person from the day of its registration. Announcements on the registration shall be published in the official press by the body which has performed the registration. The refusal to grant registration may be appealed against in a court on economic issues or any other court in accordance with the legislation of the Republic of Belarus. The ownership capital of the enterprise with foreign investment, declared in the establishing documents, shall be formed at least by 50% within the first year since the date of state registration, and in full volume - before two years after the date of registration. The enterprise with foreign investment shall submit the documents confirming the formation of the ownership capital in due volume to the registering body not later than a month after the termination of the respective period. A due conclusion of the auditing organization shall be a confirming document for the formation of the ownership capital. In extraordinary cases the pre-set terms to form the ownership capital can be altered upon the consent of the Council of Ministers of the Republic of Belarus. The enterprise with foreign investment who managed to submit confirming documents for the formation of the ownership capital shall be granted within a 10 days' period, a respective certificate by the registering body. The enterprise who failed to form the proper ownership capital, as well as the one failing to submit the confirming documents for the formation of the ownership capital in time shall be liquidated. The liquidation is effected upon the decision of the registering body by the liquidation committee, formed by the representatives appointed by the above body and by the administration representatives of the higher controlling body over the enterprise with foreign investment in the order, stipulated by the legislation in power( by the resolution of the Constitutional Court of the Republic of Belarus of October,17 1994 part 9 of Article 9 is recognized uncorresponding to the Constitution of the Republic of Belarus). Upon receiving the liquidation committee's act, the registering body shall inform the Ministry of Finance of the Republic of Belarus and the State Committee of the Republic of Belarus for Statistics and Analysis to have the enterprise deleted from the State roster and Enterprise register of the Republic of Belarus, respectively, and shall publish the liquidation notice in the official press. In case an enterprise with foreign investment makes such amendments to their establishing documents which can result in alternation of the data placed into the State roster and Enterprise register, these amendments shall be submitted to the registering body within one month since such amendments made to have State re-registration. All rights and privileges, stipulated by articles 15,17 and 30 of the present Law, may only be exercised by an enterprise with foreign investment after receiving a certificate of at least 50% formation of the ownership capital.
Article 10. Examination of Established Enterprises with Foreign Investment At the initial stage of production activities of enterprises with foreign investment its co-establishers, in cases and according to the procedure provided by the legislation of the Republic of Belarus, shall be obliged to obtain an opinion from the sanitary and epidemiologic and environmental services. The examination and authorization of investment projects and programs shall be done in accordance with the Law "On investment activities in the Republic of Belarus"
Article 11. Winding up of Enterprises with Foreign Investment The winding up (liquidation) and reorganization of enterprises with foreign investment shall be performed in the cases and according to the procedures, stipulated by the articles of the Law of the Republic of Belarus "On Enterprises in the Republic of Belarus", by the present Law and by other Laws of the Republic of Belarus. The enterprise may also be wound up in case the procedure of the formation of the ownership capital provided by the establishing documents is not observed. The registration of the winding up or reorganization of an enterprise with foreign investment shall be done by the body which has previously registered it, on the basis of the act issued by the winding up commission or some other body executing the winding up, or the decision by the body authorized to do the reorganization. The information on the winding up shall be published in the official press by the body which has previously registered it.
Article 12. Regulation of Activities of Enterprises with Foreign Investment The enterprise with foreign investment may be engaged in selected activities included in the list regulated by the legislation in force on the territory of the Republic of Belarus only having special permits (licenses).
Article 13. Control over Activities of Enterprises with Foreign Investment The Ministry of Finance of the Republic of Belarus and the State Committee of the Republic of Belarus for Foreign Economic Relations shall exercise control over financial and economic activities of enterprises with foreign investment. Enterprises with foreign investment shall be obliged to submit to these bodies reports and documents on their activities provided by the legislation of the Republic of Belarus. The National Bank of the Republic of Belarus shall control activities of the banks with participation of foreign investors.
Article 14. Contributions of Foreign Investors to the Ownership Capital of Enterprises with Foreign Investment Foreign investors shall pay contributions to the ownership capital of a joint venture in the form of monetary and non-monetary foreign investments. By mutual agreement of the participants non-monetary contributions shall be estimated both in a foreign currency and the currency used on the territory of the Republic of Belarus taking into account the prices existing at the world market. In case a necessity arises to recalculate the contributions made in foreign currency into the official currency of the Republic of Belarus a mutually agreed exchange rate may be used. In this case the whole ownership capital shall be declared in the foreign currency, while the agreed exchange rate into the official currency of the Republic of Belarus shall not be below the level stipulated by the legislation acts regulating currency usage on the territory of the Republic of Belarus. A non-monetary contribution must be brought in from a foreign country or acquired in the Republic of Belarus for a hard currency or for the currency used on the territory of the Republic of Belarus if it is obtained in the Republic of Belarus as profits from foreign investment, permitted commercial activities, as well as by exchange of a hard currency in banks of the Republic of Belarus. A foreign investor must pay its monetary contribution to the ownership capital of a joint venture in a hard currency unless otherwise provided by a legislative act of the Republic of Belarus or an international treaty signed by it. He shall also have the right to pay the contribution in the currency used on the territory of the Republic of Belarus in accordance with the procedure stated in part 4 of this Article.
Article 15. Export and Import Transaction Enterprises with the ownership capital composed of more than 30 % of foreign investment shall have the right to export products (work, services) of its own production without any licenses and additional permits. An enterprise with foreign investments hall be entitled to a non-licensed import of products (work, services) for use in its own economic activity. The Council of Ministers of the Republic of Belarus shall establish the general procedure for considering products (work, services) of enterprises with foreign investment to be products (work, services) of their own production. Other products of enterprises with foreign investment shall be exported and imported in accordance with the legislation in force of the Republic of Belarus. An enterprise with foreign investment breaking the regulations of parts 1 and 2 of this Article shall entail liability provided by the legislation in force on the territory of the Republic of Belarus. Article 16. Conditions for Realization of Products An enterprise with foreign investment shall be entitled to set contractual prices for its products (work and services), as well as the procedure of their realization, and choose suppliers of products (work, services).
Article 17. Disposal of Currency Profits An enterprise with foreign investment with a share of the foreign participant in the ownership capital in excess of 30 % shall keep at its own disposal the currency profits resulting from export of its own products excluding the tax payments calculated in accordance with the legislation in force of the Republic of Belarus.
Article 18. Contracts on Objects of Intellectual Property Enterprises with foreign investment shall have the right to sign contracts on objects of intellectual property with their employees in accordance with the production targets confirmed by the documents of the enterprise. The enterprise shall be granted patents for inventions and production samples if a corresponding contract is signed by the enterprise and its employee. This contract, accompanied by the assignment of patent rights, shall determine the obligation of the enterprise to provide for material, production and social conditions in reference to the employee.
Article 19. Use of Property According to Types of Liability An enterprise with foreign investment may use its property as a security for all types of its liabilities including the drawing of borrowed funds. Proprietary rights to buildings, constructions, equipment, as well as other proprietary rights transferred by the participants as their contributions to the ownership capital of the enterprise may be used as a security. The mortgaged property may be realized by the mortgagee for the currency used on the territory of the Republic of Belarus or for a foreign currency at contractual prices, including those at auctions.
Article 20. Labor Relations at Enterprises with Foreign Investment Production and labor relations including employment and dismissal issues, working and recreation hours, salaries and wages, guarantees and compensations at enterprises with foreign investment shall be regulated both by a collective labor contract (agreement) and by individual labor contracts (contracts of employment). Wages, leave and pension issues referring to foreign employees at enterprises with foreign investment shall be determined in individual labor contracts (contracts of employment) with each of them. Their wages in a foreign currency may be transferred abroad. Terms of a labor contract (agreement) and individual labor contracts may not worsen the situation of employees of this enterprise as compared to the conditions provided for by the legislation in force on the territory of the Republic of Belarus.
Article 21. Social Insurance and Pensions for Employees at Enterprises with Foreign Investment Social insurance of employees at enterprises with foreign investment and their social security (excluding pensions for foreign employees) shall be regulated by the legislation in force on the territory of the Republic of Belarus. Payments to pension funds of foreign employees at enterprises with foreign investment shall be transferred to corresponding funds in countries of their permanent residence on conditions and according to the procedure provided by individual contracts (contracts of employment).
Chapter 3. Activity of foreign investor and enterprises with foreign investments in banking and credit and financial fields, acquisition of securities, participation in stock exchange activities
Article 22. Banking Accounts of Enterprises with Foreign Investment Enterprises with foreign investment and foreign investors shall have the right to open accounts in a foreign currency, as well as in roubles in authorized banks on the territory of the Republic without the right to transfer the rouble sums abroad. Enterprises with foreign investment and foreign investors shall use the funds kept at their accounts to perform their authorized activities, to acquire currencies at the rates prevailing within permitted forms of purchase and sale of currency for roubles (auction, stock exchange and other forms). The rouble sums kept at the accounts of foreign investors may also be used for the purpose of privatization and purchasing commodities, goods and services taking into account the prices prevailing at the world market, with the right to export under special licenses. The rouble sums may be used for the purpose of privatization only in case they are the result of commercial and economic activities on the territory of the Republic of Belarus.
Article 23. Investment into Financial and Credit Institutions Enterprises with foreign investment and foreign investors may invest into joint banks, insurance companies, mixed capital companies and other financial and credit institutions established on the territory of the Republic of Belarus. Foreign financial and credit institutions, their branches and representations may be established on the territory of the Republic of Belarus except for the insurance companies. The contribution of foreign investment into the ownership capital of insurance companies must not exceed 49 %.
Article 24. Acquisition of Securities and Participation in Stock Exchange Activities Enterprises with foreign investment and foreign investors shall have the right to acquire shares, bonds, other securities, to make transactions with purchasing and selling of a foreign currency at currency auctions, and at currency stock exchanges at market rates through authorized banks. Foreign investors shall acquire State securities according to the procedure determined by the State body authorized to do it. The procedure and terms for participation of enterprises with foreign investment and investors in currency, stock, commodity and other exchanges shall be regulated by the corresponding legislation of the Republic of Belarus. Chapter 4. Acquisition of Rights to Use Land and Other Rights by Foreign Investors and Enterprises with foreign investments
Article 25. Lease of Property, Land and Other Natural Resources Foreign investors and enterprises with foreign investment shall lease property, land and other natural resources on the strength of contracts with a lessor according to the Law of the Republic of Belarus "On Lease" and other laws of the Republic of Belarus. The lease of a State property shall be permitted by the State body authorized to manage this property.
Article 26. Participation of Foreign Investors in Privatization Foreign investors may participate in privatization of objects of State ownership on the territory of the Republic of Belarus. They shall be entitled to buy out enterprises (shares) if the working collectives and other Belarusian subjects refuse to acquire such enterprise (shares) in accordance with the programme of privatization. The terms of their participation in biddings and auctions for privatization shall be determined by the legislation in force on the territory of the Republic of Belarus. Payments for acquired enterprises and objects of incompleted capital construction or for participation shares may be done both in a foreign currency and in the currency used on the territory of the Republic of Belarus, taking into account the prices at the world market.
Article 27. Acquisition of Plots of Land into Ownership by Foreign Investors Foreign investors shall have the right to acquire plots of land into ownership according to the procedure and on terms determined by legislative acts of the Republic of Belarus.
Article 28. Concessions The Supreme Soviet of the Republic of Belarus shall have the exclusive competence to grant concessions on the territory of the Republic of Belarus. Chapter 5. Foreign Investment in Free Economic Zones
Article 29. Establishment of Free Economic Zones and Activities Inside Zones A corresponding law of the Republic of Belarus shall determine the procedure of establishing free economic zones in the Republic of Belarus and economic activities inside these zones with the use of foreign investments, as well as benefits provided in this regard, including tax privileges. Chapter 6. Taxation, tax and customs privileges
Article 30. Taxes and Tax Privileges Enterprises with foreign investment, as well as foreign investors shall pay taxes in accordance with the legislation of the Republic of Belarus and have privileges by the present Law. The enterprises with the ownership capital where the share of a foreign investor is more than 30 % and all its profits are created due to realization of services and products of its own manufacture shall be exempted from the tax on profits for the period of three years starting from the day of its declaration of profits, including the first profitable year. If the products manufactured by an enterprise with foreign investment are especially important for the Republic, the Council of Ministers of the Republic of Belarus shall be entitled, according to the list compiled by it, to reduce the rate of the tax on profits by 50 % for an additional period of up to three years. Article 31. Customs Duties and taxes on Import of Property Property, commodities and materials imported by a foreign participant to form the ownership capital of an enterprise with foreign investment shall be exempted from the customs duty and the tax on import. Individual property imported into the Republic by foreign employees of an enterprise with foreign investment for personal usage shall be exempted from the customs duty.
Article 32. Bookkeeping and Statistical Reports of an Enterprise An enterprise with foreign investment shall do bookkeeping and statistical reports according to the rules effective in the Republic of Belarus. For the purpose of balance estimates and keeping accounts an enterprise with foreign investment shall convert a foreign currency into roubles at the rate set by the National Bank of the Republic of Belarus for corresponding transactions.
Article 33. Calculation of Taxes for an Enterprise with Foreign Investment at Liquidation Accumulated assets of an enterprise with foreign investment being wound up, excluding the funds for material stimulation and social and cultural development, shall be subject to taxation at their residual value. If an enterprise with foreign investment is being wound up during the period of its exemption from taxes or during the three year period after expiration of the exemption from taxes the enterprise shall be obliged to pay the tax on profits for the period during which it was exempted from taxes.
Chapter 7. Guarantees to Foreign Investors
Article 34. Legal Regime for Foreign Investment The legal regime for foreign investment on the territory of the Republic of Belarus may not be less favorable than a corresponding regime for property and proprietary rights, as well as for investment activities of Belarusian legal and physical persons except for the cases provided by the legislation in force on the territory of the Republic of Belarus. In case the legislation of the Republic of Belarus becomes later on less favorable for investors, the legislation effective on the date of registration for the enterprise with foreign investment shall apply to the foreign investment for the period of five years.
Article 35. Guarantees Against Requisition, as Well as Illegal Actions of State Bodies Foreign investment in the Republic of Belarus shall not be subject to requisition or actions similar in their consequences, except for the cases of natural disasters, accidents, epidemics, epizootics and other emergency situations. In case a body of State administration or a local body of State authority adopt an act that does not correspond to the legislation or infringes upon the rights of investors, the bodies that have adopted the illegal act, by a decision of courts within their competence, shall compensate the losses inflicted on the investors as a result of these acts. In case the State body has no sufficient funds the damage shall be compensated from the Republican or local budget. The sum of compensations shall be determined as the amount of actual losses and paid to the investor within a three month period in the currency in which the initial investment were made.
Article 36. Guarantees for Transfer of Profits and Other Sums in Foreign Currency Foreign investors shall be guaranteed free transfer abroad of sums due to them in foreign currency. In case of winding up of an enterprise the foreign investor shall be entitled to reimbursement of its share of the property of the enterprise in cash or in kind at the residual value on the day of the winding up.
Article 37. Property Insurance An enterprise with foreign investment shall insure its property and risks at their discretion at any organization legally performing insurance functions, unless obligatory insurance is provided by the legislation in force of the Republic of Belarus.
Chapter 8. Settlement of Disputes

Article 38. Procedure for Settling Disputes Disputes between an enterprise with foreign investment and other legal and physical persons, as well as between the participants in such an enterprise on issues relating to its activity shall be subject to settlement in the courts of the Republic of Belarus within their competence, or by agreement of parties - in arbitration courts. If the regulations of the present Law differ from those established in an international treaty or an international agreement to which the Republic of Belarus is a party the regulations of the international agreement shall be applied.


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