Introduction
The first and the main question asked by any investor getting to know a new 'special economic zone' — is why he needs exactly this place for doing business. The answer resides in defining the key advantages and peculiarities of the economic zone.
The China-Belarus "Great Stone" Industrial Park is notable among all other economic zones for:
I. Tax and customs preferences
The Industrial Park's regime provides an unprecedented selection of tax and customs privileges in our region:
- exemption from profit tax — full exemption for 10 years and 50% standard rate further on (standard rate is 18%);
- 0% dividend tax during 5 years from the year of first dividend accrual + exemption from offshore duty (i.e. every resident may receive dividends without any tax payments in Belarus);
- reduced 5% royalty tax rate — till 2027;
- exemption from real-estate tax;
- exemption from land tax;
- reduced personal income tax rate of 9% for Park residents (instead of standard 13%) + privilege of paying Social Security Fund contributions according to the national average salary rate (instead of normally applying rates which may be 5 times bigger):
for instance, if an employee has a monthly take-home pay equivalent to 1,500 USD, the Belarusian employer has to pay 820 USD of tax and nontax payments to various funds, while a Great Stone resident will only have to pay 286 USD (three times less);
- Social Security Fund contributions need not be paid for foreign employees;
- Great Stone residents may apply the procedure of 'free economic zone' (i.e. they may import goods to be later exported (including goods processed) outside the Eurasian Union territory, without paying VAT and customs duties);
- goods produced by Park residents within the 'free customs zone' are exempt from 'import VAT', provided they are realized in Belarus;
- revenues pertaining to some operations and services performed to Park residents by foreign companies are exempt from VAT. Such operations/services include auditing, consulting, marketing, legal, engineering, advertising and other services.
II. Great Stone has advantageous location
- Great Stone offers visa-free entrance regime for foreigners;
- located on the international Moscow-Berlin route;
- proximity to the Belarusian capital provides access to highly qualified human resources;
- Great Stone is a part of the One Belt and One Road Initiative as its key hub;
- Great Stone provides easy entrance to the Eurasian Economic Union market of over 200 mln consumers.
III. Government support and investment security assurances
- at present, the "Great Stone" Industrial Park is the main investment project of the Republic of Belarus and its fundamental legal principles and guarantees are stipulated by the Agreement between the Government of the Republic of Belarus and the Government of People's Republic of China on the China-Belarus Industrial Park. However, the Industrial Park is open for investors from all over the globe and imposes no obligations to use Belarusian or Chinese goods, services, etc.;
- cooperation with the residents and investors is arranged on the basis of "one stop service" principle;
- Park residents are granted the most favourable business regime in Belarus as compared to other modes of treatment (where any more advantageous business regimes should be established, they will immediately apply to Park residents as well);
- all guarantees and assurances stipulated by the Belarusian legislation apply to Park residents, in particular international treaties and the grandfather clause guaranteeing that any changes in legislation will not impact Park residents (in terms of taxation — at least until 2027);
- any inspections of Park residents may be performed only as agreed by the Administration.
IV. Infrastructure
- Industrial Park boasts modern well-developed infrastructure that has been specially designed for manufacturing investment projects and may be tailored for any special needs of a specific investor;
- the up-to-date warehouse and customs infrastructure created by the world biggest logistic company China Merchants Group optimises the flow of goods and the export- import procedures;
- land plots may be granted on lease or purchased as private property, at resident's/investor's option;
- the Park territory comprises the National Minsk Airport capable of accomodating all types of aircraft.
V. Partnership advantages:
- the joint "Industrial Park Development Company" arranges the construction of Park's engineering infrastructure and also assists in constructing investors' facilities;
- opportunity to do business side by side with other major companies.
After reviewing the general information, an investor would normally require more detailed information for his decisions.
This review has been prepared to provide an understanding of the peculiarities of doing business in the Industrial Park during all project stages, and to be an investor's road map at the beginning of its activities in the Industrial Park. This review has been prepared by REVERA experts with the participation of the Ministry of Economy of the Republic of Belarus, of the public institution "Administration of the China-Belarus "Great Stone" Industrial Park" and the China-Belarus equity joint venture "Industrial Park Development Company", according to the legislation of the Republic of Belarus as of March 1, 2018 (unless otherwise directly specified herein).
No portion of this review may be reproduced in any form whatsoever and by any means whatsoever, without reference to this review and the website revera.by. The information contained herein is meant for general guidance only. It may not be regarded as fullscale legal opinion and may not serve as a ground for any professional judgment. REVERA company shall not be liable for any damages inflicted to any persons through any action or inaction resulting from the data contained herein.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
