Inward foreign investment stock has THE BELARUS BUSINESS ...
Investment and Establishment in Belarus
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Transcript of Investment and Establishment in Belarus
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Belarus – The heart of Europe!
Investment and Establishment in Belarus
2. May 2014
Morten Munk, CEO & Consul
MAFCON - More than 100 projects in the CIS.
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Belarus – The heart of Europe!
The next 15 min. will be about “Why and How” regarding investment and establishment in Belarus!
• Shortly about Belarus and Mafcon! • The key issues! • Why to get a foothold in Belarus! • Tips and tricks! • Experience and lessons learned!
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Business in Belarus
• The East Region – when there are no more easy picks!
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Business in Belarus • Belarus - a democratic and presidential
governed social state. • The country that is a bit easier than
Russia and Ukraine. • Both a market and a manufacturing hub! • Market economy – on state conditions! • Easy accessable from the West! • The Customs Union paves the way further
east!
Hard facts at: http://www.belarus.by/en/about-belarus/key-facts
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The current crises!
• Changes are coming, and the East Region as a whole will be reformatted over time!
• The expected massive capital inflow to Ukraine will be a game changer!
• Business conditions will be upgraded! • Corruption and safety issues will ease!
In the meantime – Business as usual!
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Russia
• Russia will remain on a distance to the West for quite a while.
• CIS will remain CIS for a long time. • Russia, Ukraine and Belarus were already
in 2013 facing lower growthrates. • The Customs Union will increase its
importance for Russia.
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Mafcon – why are we here?
Just about to complete a € 3 mio. investment for a Danish company in Orscha. • Salling Plast manufactors a full range of plastic fittings for a range of business sectors • Buildings, management, equipment & machinery, approvals and permits. • Targeting the Belarussian market and via
the Customs Union to explore Russia.
MAFCON - More than 100 projects in the CIS.
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Mafcon’s CIS competencies
Planning & Execution
”End-to-End” establishments, production as well as sales companies– buildings, management, equipment and machinery, approvals & permits
Upgrading of CIS business struktures - Mafcon’s Business Alignment Model Business Excellence – concrete knowledge about CIS business standards and conditions Market intelligence – analytical bodies covering all CIS
MAFCON - More than 100 projects in the CIS.
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MAFCON in Belarus!
Maria Golovko, Legal counsel +375 29 681 4631 [email protected]
MAFCON - More than 100 projects in the CIS.
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MAFCON in Belarus!
• Interesting potential.
• Excellent platform in the Customs Union.
• The rules of engagement calls for
professional guidance.
MAFCON - More than 100 projects in the CIS.
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The key issues!
When talking about the East Region there is always 3 questions coming forward: -Corruption -Safety -Why is it so difficult to become successful there?
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Corruption
• Transparency International puts Belarus
on a 132 place. • The experienced presure for corruption
is definitely lower than average in the East Region.
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Safety
• The physical safety (crime, etc.)
• The business safety (court system, etc.)
• High degree of predictability provided that the rules of the game are followed.
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Why is it so difficult?
• A complex set of rules, but with an built
in logic and good cohesion, which again creates a high degree of predictability! Thus, if you understand the rules.
• The precondition is a professional approach – thoroughness and many details.
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The Customs Union
-Transition problems and unclearness -Winners and looser’s. -General growth in custom tariff’s -One common set of rules -Common industrial standards -Increasing internal competition inside the Union. -Economic growth factor. -Russian will prevail as business language.
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The Customs Union
• Registration as local producer. • Buy local clauses. • Labor market legislation. • Etc., etc., etc. • A learning process for Danish companies. • The short and long term perspective.
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For a long time to come
Cultural and structural the region is not in line with international business standards,
but can be characterized by what might be called institutional voids and contexts.
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Why to get a foothold in Belarus!
Motivation: • Explore the potential in Belarus
• A cost efficient platform in the Customs
Union
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Belarus - Market economy on governmental level!
• Economic activity in Belarus: 30% private and 70% state.
• The goal is to regain economic growth by privatisation, that can add dynamics, capital and technology.
• Key areas are agriculture, food processing and energy transformation.
• The B – B sector is by far the most interesting.
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A few words about the potential
Agriculture: Cultivated land: 3,5 times Denmark Efficiency potential: 75 – 100% increase Yet to be privatized: More than 80% Reforms announced!
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Belarus – an untapped potential
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A few words about the potential
Energy: Energy consumption, DK 36,2 TWH/mio. 24,5% from renewable sources (wind and wood) Energy consumption, BEL 37,5 TWH/mio. 0,5% from renewable sources
Energy plan 2020 in place.
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A cost efficient platform
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For those of you who want to get established…
• To get established in the CIS is primary an administrative exercise, and Belarus is very similar to other CIS countries.
• A complex set of rules, but with a built in logic and a good cohesion!
• The authorities in Belarus are thorough and professional; clear line of command that works.
• To understand and accept norms and set of rules in the CIS!
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For those of you who want to get established…
A successful investor must possess: Deep and comprehensive knowledge and understanding of the CIS in general and Belarus in particular in order to be able to:
• ID of attractive targets and locations. • Define conditions for the investment. • Define the future outlines for his business
activities in order to ensure room for manoeuvring.
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Tips & Tricks!
• Professional approach - thoroughness
and many levels • Own knowledge and competence a
precondition for success. • Top down decision processes. • Contracts and agreements are the back
bone of any business relation and creates predictability.
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Tips & Tricks!
• Norms & standards need attention. • Supply and distribution channels are
often exclusive. • The administrative landscape must be
mapped. • The political dimension must be
considered in the overall business process!
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Lessons learned
• The political dimension! Administrative practise often overtake the role as legislation.
• The investment agreement is the backbone in any investment or establishment, not only for the transaction, but even more seen in the forward perspective.
• When the home work is done well! Relations last for a long time.
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If you want to know more?
• www.mafcon.com
• Hvad kan vi danskere i Hviderusland, LinkedIn
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Selected references
Giract
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Thank you for your attention!
Questions are welcome!
Aarhus, Denmark +45 70 22 84 55 [email protected] www.mafcon.com/dk