Belarus defines procedure for transferring foreign-owned companies to temporary external management

MINSK. Jan 21 (Interfax) - The Belarusian Council of Ministers has approved a decree detailing the procedure for placing commercial organizations with property under foreign ownership under temporary external management, and defining the criteria for such companies.

The corresponding decree was published on the republic's National Legal Internet Portal on Wednesday.

"Regional executive committees and the Minsk City Executive Committee analyze the activity of commercial organizations from the register to identify whether there are grounds to place them under temporary external management, using the information they have on the following indicators: production of industrial products (work, services) at actual prices, revenue from the sale of products, goods, work and services, net profit, loss, sales margins, the number of listed employees and the nominal average monthly wage paid," the document reads.

An organization will be placed under temporary external management if "the owner of the property effectively ceases their involvement in the management of the commercial organization's activity or the owner of the commercial organization's property commits economically unjustified actions which could in effect lead to the termination of the organization's activity, liquidation and/or bankruptcy or cause damage to it".

As reported, Belarusian President Alexander Lukashenko signed a bill extending the possibility for commercial organizations whose property is under foreign ownership to be transferred to temporary external management. The law will now be in effect until the end of 2028, rather than the end of 2025 as per the initial document.

Belarus has significantly limited the property rights of foreign investors from countries which its government considers to be unfriendly due to previously imposed sanctions against the country. On January 3, 2023, it passed Law 239-Z, making it possible to place commercial organizations with property under foreign ownership under temporary external management for up to 18 months. The document states that the goals of temporary external management are "to prevent the unjustified termination of commercial organizations' activity and damage to their employee collective and to ensure the regular, profitable operation of commercial organizations".