Resolution of the Council of Ministers No. 27 of January 12, 2024 “On issuance of permits” approved the procedure for issuing permits for alienation of shares by shareholders from “unfriendly countries”, and real estate property.
The Resolution has been adopted within the scope of Edict No. 326 of October 19, 2023, which introduced requirements for obtaining government permit and paying a budget payment of at least 25% of alienated asset market value.
When the permit is required?
- sale of shares in local companies by foreign persons;
- sale of real estate by local companies with 25% or more share in authorized capital of a foreign person, as well as unitary enterprises with foreign participation.
- withdrawal of foreign shareholders from LLC and corporate reorganization of companies with foreign participation.
When/in what amount the budget payment is levied?
The budget payment is levied upon sale of shares and real estate.
The amount of payment (at least 25% of the market value made by state appraisal organization) and terms for its payment are determined in a decision by the regional executive committee/Minsk city executive committee.
The budget payment can be made either by seller or buyer.
Please note that, upon withdrawal from LLC membership (special procedure relevant for LLCs only and not applicable for stock companies) and company reorganization, no budget payment is made.
How to obtain permit?
The foreign shareholders submits an application to the regional executive committee/Minsk City Executive Committee at place of company’s registration.
The application shall be accompanied by set of documents/information:
- information on company’s activities (balance sheet, profit and loss statement, scale of production, number of employees, payments to the budget) – when applying for permit to sell shares, enterprises as property complexes, company reorganization, withdrawal from LLC;
- a copy of assessment of market value of shares, real estate – when applying for permit to sell shares, real estate;
- an extract from the trade register in relation to a foreign shareholder-organization or a notarized copy of ID of a shareholder-individual;
- an extract from the registration book on rights, encumbrances of rights to real estate – when applying for permit to sell real estate;
- statement from securities account – when applying for permit to sell shares in stock companies;
- information about buyer of sharess, real estate (if any);
- other documents at the discretion of regional executive committees/Minsk City Executive Committee.
What are the deadlines for issuing permit?
The draft decision of regional executive committees/Minsk City Executive Committee is prepared within 30 business days from the date of submission of necessary documents.
Subsequently, the draft decision by the executive committees is sent to the State Committee on Property, which, if necessary, prepares a monthly draft consolidated Resolution of the Council of Ministers for further coordination and approval. Permit for the transaction is issued in form of a Resolution of the Council of Ministers.
The transaction permit (subject to its receipt) is valid for 1 year from the date of adoption.
Please note that permit for the transaction does not cancel other legal requirements for implementation of the transaction. For example, obtain a consent of the antimonopoly authority or comply with other requirements of antimonopoly legislation.
The resolution of the Council of Ministers comes into force on January 18, 2024.
If you need advice or legal support for transactions with shares with participation of foreign persons, please contact us.
