Foreign update (#12 December 2018)

Doing Business with Belarus

What makes Belarus an interesting proposition for Ukrainian business? What forms of presence are available for a foreign business? What nuances of state administrative influence business, and what peculiar features of public procurement and commercial bidding are there in the Republic of Belarus? These and other issues were discussed at the Doing Business with Belarus Conference organized by REVERA Law Firm (Minsk) with information support of Yuridicheskaya Practika Publishing at the site of educational project Legal High School.

When evaluating the trade and economic partnership between Belarus and Ukraine, Gennady Boldyr, director of the Directorate for International Cooperation of the Ukrainian Chamber of Commerce and Industry, talked about a milestone event, namely the recent meeting of the two Presidents at the end of October in the Belarusian town of Gomel. Our bilateral relations with Belarus are gaining a new qualitative character: we have managed to get out of the nose dive, which was characteristic of our relations several years ago, the interlocutor said. In support of that he presented economic statistics: in 2017, bilateral goods turnover came to about USD 4.5 billion.
The goal, as stated within the framework of the meeting, is to raise turnover to USD 8 billion over the next two years.

It appears that Belarus has the most stable political situation among other European countries, notes DmitryArkhipenko, managing partner, REVERA Law Firm, thus dispelling myths and stereotypes about his home state that are popular around the world. At the same time, the first rule of the game for a business in Belarus, according to him, reads: No politics involved! Try to avoid getting involved in joint projects with the state. It is risky to establish a business that will be focused on public procurement. Its impossible to compete with the public sector grandees that operate on the domestic market, just as it is impossible to rely on addressing issues in Belarus through corruption.

Mr. Arkhipenko announced the key advantages of doing business in Belarus low competition and a low threshold for market access, equal rights to accessing EEU markets, preferential treatment for industrial enterprises (Industrial Park, Free Economic Zone, rural business), a stable economy (credit rating B), sale of cryptocurrency with a zero-tax rate (for individuals), High Technology Park (HTP) a new type of technological hub.

Another important topic of discussion are the opportunities and benefits available for investors, as well as nuances of protecting business in Belarus. Denis Bogdanov, associate partner, REVERA Law Firm, said that just a few years ago the country underwent judicial reform, within the framework of which commercial courts were united with general ones. Through such a merger, it was possible to address the problem of non-uniform law enforcement, since earlier the Supreme and Higher Commercial Courts of the Republic of Belarus could adopt totally conflicting decisions in similar legal relations, thereby establishing different judicial practices.

There are now two types of courts in Belarus: general and commercial ones. Mr. Bogdanov emphasizes that the qualifications of judges in commercial courts are much higher than that of judges in general instances. Another advantage of specialized courts is the speed with which cases are dealt with. On average, the period for consideration of disputes in commercial courts (the first instance) is about two months. Cases in such courts are heard impartially: at least, when the parties to the dispute are two legal entities a local non-state company and a foreign company, the scales of the Belarusian Themis will not tilt toward the national producer just because it is local, he assured. Moreover, there is a simplified procedure for consideration of cases by the commercial court, whose term is from
1 to 2 months. Nonetheless, according to Mr. Bogdanov, this procedure only applies to debtors-residents of Belarus, and its result depends on debtor activity and arguments in the case of the latter.

When asked about the fulfillment of judgements by arbitration courts, associates noted that Belarus had signed the New York Convention, and there would be no problems with the execution of arbitration judgements.

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