VMP Vlasova Mikhel & Partners / Best Lawyers

There are a number of preferential areas today that provide favorable conditions for doing business in Belarus. These areas include free economic zones, Hi-Tech Park, and the territory of small settlements. In 2012, a new preferential zone was created in Belarus: China-Belarus Industrial Park or Great Stone Industrial Park.

China-Belarus Industrial Park is a territorial entity in Smolevichi, part of the Minsk region, with an area of more than nine hectares and with a special legal regime in its economic zone, in part due to a tax regulation. Residents of Great Stone are granted a benefits package and preferences for economic activities in its territory. The State Institution administration of China-Belarus Industrial Park Industrial Park Great Stone carries out current management of the park.

Legal entities of Belarus, regardless of the country of origin’s investments, located (registered) in the industrial park[1] territory,  that are planning to implement investments in this territory, can be residents of Great Stone. The investment project should meet the following criteria:

   - carry out economic activities in accordance with the industrial park’s areas of activity, the main ones of which are the creation and development of production facilities in the fields of electronics, pharmaceuticals, fine chemistry, biotechnology, engineering, new materials, and supplementary areas of activity (implementation of research, development and design, and experimental works in these areas [R&D]), as well as the creation and development of logistics;

   - the declared amount of investments no less than 5 million U.S. dollars, and in the implementation of the investment project on R&D, no less than 1 million U.S. dollars.

Residents of Great Stone are granted tax and other benefits and preferences for implementation of the investment projects, too. Tax benefits include:

  1. exemption within 10 years from the date of receipt of status for industrial park residents from:

      - tax on profit from the sale of produced goods (works, services);

      - land tax;

      - real estate tax on the objects in the territory of the park.

Afterward, the abovementioned taxes will be paid at rate reduced at 50 percent within following 10 years.

2. 0 percent rate of tax on profit (tax on income of foreign organizations) on dividends within five years;

3. 5 percent rate of tax on income of foreign organizations on royalties charged from residents of the park in the form of remuneration for the know-how, license, patent, utility model, and the process until January 1, 2027;

4. 9 percent rate of income tax from salaries of employees of industrial park residents until January 1, 2027;

5. right to full deduction of value added tax (VAT) paid for acquisition of goods in Belarus (works, services) used for design, building, and equipping buildings and facilities in the industrial park;

6. exemption from payment of custom duties for imported goods (equipment, raw, and other materials);

7. exemption from payment of tax on profit and VAT, which is to be paid in case of gratuitous transfer of permanent structures (buildings, constructions), facilities under construction, and other objects of permanent assets located in Great Stone and transferred to the ownership of the residents of the park for construction of buildings and structures in its territory;

8. benefits on payment of compulsory insurance contributions;

9. absence of an obligation to pay new taxes and fees that will occur in Belarus.

Other benefits and preferences include:

1. permission to use the foreign currency in settlements between residents of the industrial park and residents of Belarus on currency transactions, aimed at design and construction of the objects of the park;

2. exemption from agricultural and/or forestry manufacturing losses caused by the withdrawal or temporary occupation of agricultural lands and forest lands within the boundaries of the park, as well as compensatory planting and compensatory payments for the cost of removed plant objects, compensatory payments for any harmful impact to animal objects and/or their habitats;

3. exemption from compulsory selling of foreign currency funds until January 1, 2027;

4. exemption from paying state fees for permit issuance for foreign labor force and special permits for employment in Belarus for foreign employees, as well as reduced terms of issuance for such documents;

5. exemption of foreign employees  from state fees for receipt of a permit for temporary residence in Belarus;

6. the opportunity to lease (sublease or obtain private ownership) the land plot in the industrial park.

In order to register as a resident of the industrial park, legal entities of Belarus should apply to the administration of the park with the following documents:

   - application in the prescribed form with indication, inter alia, of information on investment projects (areas and types of business activity, the amount and terms of the investments, etc.);

   - originals and copies of state registration certificates for the legal entity and its constituent documents;

   - substantiation of the investment project with indication of plan of investments, specific measures and creation of high-quality productions, expected amount of revenues, and other technical and economic parameters of the investment project.

These documents are reviewed by the industrial park administration within five business days, after which the decision on legal entity registration for park residents is taken or the decision to refuse a registration can be made. The registration day is a conclusion to the contract on terms of residents’ activities between park administration and the resident.

On May 12, 2015, the first seven residents of Great Stone received registration certificates. According to information about the public source negotiations with 12 other companies, potential residents of the park will take place now.

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[1] Copyrighted article: VMP Vlasova Mikhel & Partners©.

[2] Benefits and preferences are not applied to banks, non-bank financial organizations, and insurance organizations, as well as commercial organizations carrying out on the territory of the Industrial Park lottery activity, activity in gambling sphere, and activity on organization and conducting of electronic interactive games.