Investment Opportunities of the Republic of Belarus

The priority of the state economic policy of Belarus is the creation of a favorable investment climate for attraction and effective use of foreign investments.

Belarus offers potential investors such advantages as favorable geographical location in the center of Europe, auspicious natural and climatic conditions, political and social stability, macroeconomic stabilization, qualified and relatively inexpensive labor force, high scientific, technical and industrial potential, capacious domestic market, legal and organizational framework stimulating investment process.

The Republic of Belarus is at the crossroads of main rail and motor routes, systems of oil, gas and product pipelines, communications systems between Western Europe and Russian regions as well as Asian countries. By virtue of this, Belarus can become a base for foreign investors seeking to acquire new promising markets of CIS countries.

The economic situation in the country is characterized by a stable inflation level, predictability of exchange rates, presence of tax and customs advantages for foreign investors, growth of export potential, developed banking system, burgeoning market of financial and insurance services.

Highly developed scientific and research facilities make it possible to conduct fundamental and applied research and development in various fields. About 300 of scientific organizations work in Belarus. Over 30 thousand people are engaged in scientific research and development, including 805 Doctors of Science and 3400 Candidates of Science. The results of development activities of Belarusian scientists in the fields of laser and nuclear physics, nuclear technology, powder metallurgy, optics, software tools, biotechnology, etc. have received world recognition.

Facilities for producing goods competitive at domestic and foreign markets are in place in Belarus. Belarus specializes in production of machinery, chemical, petrochemical, light industries, livestock breeding, flax production and potato farming. Belarus exports over 90 percent of its automobiles and tractors, about 90 per cent of television sets and potash fertilizers, and about 80 percent of machine-tools.

Belarus is a part of a common customs area with Russia. For a potential investor it means that by investing in Belarusian economy he gets a wide access not only to the Belarusian territory, but also to a very capacious Russian market. Conductive to the expansion of investment opportunities are the positive dynamics of negotiation process on the accession of Belarus to the World Trade Organization, improvement of relations with international financial organizations (International Monetary Fund, International Financial Corporation, and European Bank of Reconstruction and Development).

Six Free Economic zones have been established in Belarus, where favorable economic conditions are provided through fiscal and customs preferences. Income tax and value-added tax for the residents of Free Economic Zones are two times lower than elsewhere throughout the country. The income of the residents of Free Economic Zones for their own production is tax exempt for 5 years rom the moment of the declaration of the income.

The Republic of Belarus is the only country among the CIS states which adopted the Investment Code – the fundamental document regulating not only domestic, but also foreign investments on the territory of the country. The Investment Code protects property rights of foreign investors, secures for them business environment as favorable as for national producers, as well as sets for them special stimulating advantages in fiscal, customs and currency areas.

The Consultative Council on Foreign Investments headed by the Prime Minister has been active in Belarus. This body develops major objectives and measures to improve the investment climate in the country and also efficiently assists foreign investors in solving various problems related to their activities in Belarus. The Standing Committee and working groups set up under the Council are engaged in perfecting investment legislation, developing free economic areas, improving tax and customs conditions of activities at the Belarusian market, etc.

Belarus has accumulated positive experience of the activities of foreign companies in implementing large and medium investment projects. Belarus has been successfully cooperating with internationally known transnational manufacturing corporations. For instance, joint and foreign enterprises have been set up with such corporations as “MAN” (Germany, automaking), “Coca-Cola” (the Netherlands, production of soft drinks and catering), “McDonalds” (the United States, production of soft drinks and catering), and “Maersk Medical” (Denmark, manufacture of medical equipment).

Commercial organizations involving foreign capital have certain advantages compared to national economic entities. Foreign and joint enterprises enjoy, among others, the following benefits and preferences:

• exemption for three years from taxes on profits from manufacturing activities. When such organizations manufacture the products that are especially important for the country profit tax is reduced by 50 per cent for up to another three years;

• exemption from customs duties and value-added tax for fixed assets imported to the country’s territory and for and assigned for forming the statutory fund;

• license-free export of products of own manufacture and license-free import of products for own manufacture;

• free disposal of foreign currency profits obtained from export of products of own manufacture after the payment of taxes and other required payments;

• freedom in choosing suppliers of products and in establishing prices for products of own manufacture;

• maintaining the existing legal regime within 5 years from the date of registration of an enterprise with foreign investments irrespective of the changes in the legislation of the Republic of Belarus.

All this makes Belarus attractive and, most importantly, safe and profitable country for foreign capital investments. More detailed information on investment opportunities in Belarus, including investment proposals of Belarusian enterprises and legal conditions for foreign investments, can be found at www.main.gov.by.