Главная > Publications > Great Stone Industrial Park as a great place for doing business in Belarus
21 august 2017

Great Stone Industrial Park as a great place for doing business in Belarus

Today there is a number of preferential areas, providing favorable conditions for doing business in Belarus. These areas include free economic zones, Hi-Tech Park, the territory of small settlements. A new preferential zone has been created in the territory of Belarus in 2012 - China-Belarus Industrial Park "Industrial Park "Great Stone".

China-Belarus Industrial Park is a territorial entity in Smolevichi district of Minsk region with area of more than 90 sq. km and with legal regime of the special economic zone, inter alia in part of special order of the tax regulation. Residents of Great Stone are granted package of benefits and preferences for economic activities in its territory. The State Institution «Administration of China-Belarus Industrial Park «Industrial Park «Great Stone» (hereinafter – Administration of the Park) carries out current management of the Park.

Legal entities of Belarus, regardless of the country of origin of investments, located (registered) in the territory of the Industrial Park [[1]], which are planning to implement investment project in its territory, can be the residents of Great Stone. The investment project should meet the following criteria:

  • carrying out economic activities in accordance with Industrial Park’s areas of activity, the main ones of which are the creation and development of production facilities in the fields of electronics and telecommunications, pharmaceuticals, fine chemistry, biotechnology, mechanical engineering, new materials, integrated logistics, electronic commerce, activity connected with storage  and processing of large amounts of data, social and cultural activities, as well as implementation of research, development and design and experimental works in these areas (R & D);
  • the declared amount of investments not less than 500 000 US dollars if investing within 3 years (not less than 5 mln. US dollars if investing within longer period), and in the implementation of the investment project on R & D - not less than 500 000 US dollars regardless of the term.

Upon the decision of Administration of the Park, legal entities that do not meet the abovementioned requirements can be granted the status of residents of the Industrial Park.

Residents of the Great Stone are granted tax and other benefits and preferences for implementation of the investment projects in the territory of the Industrial Park.

Tax benefits includes:

1.   exemption of resident of the Industrial Park from:

  • tax on profit from the sale of produced goods (works, services) within 10 years from the date when the profit incurred.; afterwards the abovementioned taxes will be paid at rate reduced by 50% (current income tax rate is 18%).
  • land tax for the duration of the special legal regime;
  • property tax regarding objects in the Park for the duration of the special legal regime.

2.    0% rate of tax on profit (tax on income of foreign organizations, income tax from individuals) for dividends of the founders (participants) of the residents of the Industrial  Park for 5 years starting from the first calendar year in which dividends or equivalents are accrued;

3.    5% rate of tax on income of foreign organizations on royalties charged from residents of the Industrial Park in the form of remuneration for the know-how, license, patent, drawing, utility model, scheme, formula, industrial design or the process  until January 1, 2027;

4.    9% rate of income tax from salaries of employees of residents of the Industrial Park until January 1, 2027;

5.    right to full deduction of VAT paid at acquisition in the territory of Belarus of goods (works, services) used for design, building and equipping of buildings and facilities in the territory of the Industrial Park.

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

7.    exemption from payment of VAT in case of:

  • gratuitous transfer of design documentation for the Industrial Park facilities, non-completed capital construction objects located on the territory of the Industrial Park into the ownership of a joint company and (or) residents;
  • sale of real estate objects including land located on the territory of the Industrial Park to residents and (or) a joint company;
  • leasing (sublease) transactions, transfer of real estate objects to financial lease (leasing) including land located on the territory of an Industrial Park with residents of this Park and (or) a joint company.

8.    benefits on payment of compulsory insurance contributions: for citizens of the Republic of Belarus - 0% with respect to income exceeding the average salary of workers in Belarus; for foreign citizens - 0% for the entire income;

9.    absence of obligation to pay new taxes and fees that will occur on the territory of Belarus, as well as to pay taxes at higher rates compared to the rates applicable at the date of registration.

 

Other benefits and preferences granted to residents include:

1.    exemption from compensation for losses of agricultural and (or) forestry production caused by withdrawal or temporary occupation of agricultural lands and forest fund lands within the boundaries of the Industrial Park, as well as from compensatory planting and compensation payments of the cost of removed, transplanted objects of the plant world, compensation payments for harmful Influence on objects of fauna and (or) their habitat;

2.    exemption from compulsory sale of the foreign currency received from foreign trade transactions of participants of the construction of the Industrial Park facilities;

3.    the possibility to open accounts in foreign banks without obtaining permission from the National Bank of the Republic of Belarus;

4.    exemption from payment of state fee for issuance (prolongation) of permits on attraction of foreign labor force and special permits for employment in the territory of Belarus for foreign employees of the residents of the Industrial Park, as well as reduced terms of issuance of such documents;

5.    the exemption of foreign employees of residents of the Industrial park from the state fee for registration and obtaining of temporary residence permits in Belarus;

6.    the possibility of establishing a visa-free entrance to Belarus, as well as the right to stay on the territory of Belarus for 180 days in a calendar year without obtaining a temporary residence permit for persons involved in the implementation of projects in the Industrial Park, as well as founders, employees of the founders of residents;

7.    the possibility of registering foreign citizens who do not have a permanent residence permit in Belarus and are staffed by customers and contractors for the construction of the Industrial Park facilities in residential premises that are not real property objects and (or) are not subject to inclusion in the residential stock;

8.    the possibility to use electronic document flow without necessity to maintain hard copies document flow;

9.    the possibility to lease (sublease or acquire in private property) a land plot on the territory of the Industrial Park.

 

In order to register as a resident of the Industrial Park legal entity of Belarus should apply to the Administration of the Industrial Park with the provision of 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);
  • originals and copies of certificate on state registration of 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 Administration of the Park within 5 business days after which the decision on registration of the legal entity as a resident of the Park is taken or the decision to refuse a registration. The day of registration is a day of conclusion of the contract on terms of Resident’s activity in the Park between Administration of the Park and the resident.

On May 12, 2015, first seven residents of the Great Stone received certificates on registration. According to the information from public sources, 15 companies are residents of the Industrial Park now.

 

We will be happy to provide any further information or assistance should you are interested in the above procedures.

Please contact VMP corporate practice team partner Svetlana Dashuk (svetlana.dashuk@vmp.by) or senior associate Natalia Talai (natalia.talai@vmp.by).

 

 

 [1] Registration as residents of the Industrial Park of legal entities implementing (going to implement) an investment project that involves the following activities is not allowed:

  • production, processing, storage, neutralization, sale of radioactive and other dangerous materials and waste;
  • turnover of narcotic drugs, psychotropic substances, their precursors;
  • sowing, cultivation, processing, storage, sale of crops containing poisonous substances;
  • production of alcoholic beverages;
  • production of tobacco products;
  • production of forms of securities, banknotes and coins, postage stamps;
  • lottery activity;
  • preparation and broadcasting of radio and television programs, except for technical maintenance of radio and television;
  • treatment of people suffering from diseases that pose a danger to public health;
  • treatment of animals with especially dangerous diseases.

© VMP Vlasova Mikhel & Partners Law office