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PRESS RELEASE
Washington,
D.C., March 10, 2008
Belarus
Takes Consistent Legal Steps to Radically Liberalize Economy and Raise
Investment Profile
In recent
months, Belarus has passed a number of far-reaching legal acts to radically
liberalize economy and raise investment profile of the country. Those
measures and the measures to follow are stepped up to achieve the goal
assigned by the Head of State – make it to the top 25 countries in terms
of doing business under the World Bank ranking.
1. The
waiver of the state’s special right to participate in the management of
businesses, i.e. “golden share” was decreed by the President of the
Republic of Belarus (No. 144 of 4 March 2008) to additionally protect the
rights of Belarusian and foreign investors, preclude excessive interference
of the governmental bodies with their activities.
2. On 17
December 2007, the Head of State signed into action Ordnance No. 8 that
simplified state registration and dissolution of businesses.
Approval-based
registration that was in operation previously has been replaced by
application-based registration, with twenty days’ registration time cut
to five days and minimum statutory funds of legal entities and
minimum subsidiary liability of the supplementary liability societies
halved. Where legal entities are dissolved and individual entrepreneurs
close business down, one-stop shop approaches are employed by the registrar
in conjunction with other governmental bodies.
3. To
encourage economic development of rural communities, on 20 December 2007
the President issued Decree No. 9 “On certain issues of the regulation of
rural entrepreneurship”.
From 1
January 2008 special taxation applies to the organizations and
individual entrepreneurs operating in rural areas, as a result. Hence, in
2008-2012, they are exempt of the income tax and real estate tax.
Licensing fees are declining. With a view to keep construction costs
down tax benefits have been introduced until 2011.
Where
manufacturing equipment is imported as input into the statutory fund, the
organizations operating in rural areas enjoy exemption from customs
dues and VAT which would allow tax exemption of investments that are
required to re-equip the current manufacturing facilities and create new
capacities.
With
minimum paperwork, the banks will issue cheap loans to the tune
of below 20,000 Euro to the businesses who carry out investment projects in
rural communities.
4.
Similarly, this approach is employed in Ordnance No. 1 of 30 January 2008
signed by the Head of State to provide a number of benefits and special
conditions to businesses started in smaller towns (with a population of
below 50 thousand). The benefits and special conditions cover all
investments including those foreign-originated.
The
manufacturing facilities that are set up in smaller towns after 1 April 2008
will be exempt during five years of income tax and mandatory sale of
revenues in foreign currency. Pricing and labour remunerating policies are
at their complete discretion. They are also exempt of dues in support of
agricultural manufacturers.
Besides,
the equipment to be imported by an investor as input into the statutory fund
is exempt of customs duties and VAT. Such companies may insure
their property interests with foreign insurers.
5. On 27
December 2007, the Head of State signed Decree No. 667 “On the seizure
and allocation of land plots” that simplified the existing procedures
dramatically. The document was passed to make sure that a decision to
allocate a land plot in favour of any citizen wishing to purchase it is made
in an approachable, simple and real-time manner. The decree assigned
relevant powers to the local executive authorities.
To add
more, the document will considerably lessen investment risks for
those interested in the allocation of land plots which pertain to the
expensive construction paperwork and the likelihood of allocation denial.
6. On the
last day last year, the President adopted Decrees No. 699 and 700
that on a permanent basis set rates of import and export customs duties
accordingly. Both documents not only address compliance of the customs
tariff with the updated version of the Commodity Classification of Foreign
Economic Activity but also allow to continue unifying duty rates with those
applied in the Russian Federation, in keeping with the international
commitments of the Republic of Belarus. The first document introduces
zero rate of the import customs duty in relation to 775 ten-digit codes of
commodities falling under manufacturing equipment. The second document
abolishes export customs duties in relation to 82 ten-digit codes.
7. On 28
January 2008, the Head of State signed a number of documents with a view to
continuous and consistent liberalization of foreign trade. Decree
No. 40, in particular, introduced status of “bona fide participant of
foreign economic activity”. Its holders will be entitled to the
simplified import of commodities to meet their own production needs and,
where necessary, use them immediately in the production without customs
clearance. The customs formalities are handled on the application-based
principle, without presentation of the commodities to the customs.
8. To
upgrade and re-equip current manufacturing facilities, from 1 January 2008
Decree No. 41
established zero import customs duty for the period of 9 months in relation
to a list of commodities involving 172 ten-digit codes of manufacturing
equipment.
9. Decree
No. 42 expands a list of benefits for the residents of free economic
zones and provides guarantees that the special legal regime of taxation
will not change. For the registered residents of free economic zones such
guarantees will be effective till 31 March 2015, for those yet to register –
within seven years of the registration date. The Decree gives more powers to
the FEZ administrations, enabling them to make independent decisions about
the registration of legal entities and individual entrepreneurs as FEZ
residents when they are implementing projects involving over 1 million
Euro-worth declared investments.
10. Decree
No. 703 of 31 December 2007 signed by the Head of State expands a list of
benefits exempting residents of the High Technology Park of customs duties
for their imports. |
