Offices | Belarus

The major legislative act regulating attraction of foreign investments into Belarus is Investment Code of the Republic of Belarus. The country has also concluded 28 bilateral and 3 multilateral agreements on cooperation and mutual defense of investments.

With regard to Belarusian legislation companies with foreign investments are entitled for significant tax benefits and legal guaranties.

According to the Investment Code foreign investors can set up on the territory of Belarus firms either completely based on their own capital or established with share of national companies. All of them acquire the status of corporate body after registration in the Ministry of Foreign Affairs.

Firms with foreign investments can be founded in a form of joint-stock companies, limited liability companies and in other forms corresponding to legislation of Belarus. The minimal share of foreign investments in the firm's authorized capital must be not less than 20 thousand US dollars. It is essential that the Investment Code (art.7) unlike art.14 of Foreign Investments Act (become invalid with the Code's adoption) permits foreign investors to establish companies with any share of foreign capital. And such solution of foreign investment question is absolutely correct: on the one hand, the amount of investments might be any, and foreign businessman who wants to compete with national companies on equal grounds should have an opportunity to set up corporate firm with investing money to it. On the other hand, if he wants to acquire some benefits for his firm compared with national corporate entities he must invest the appropriate sum of money into the authorized capital.

Participants of a company with foreign investments can make their payments in a monetary and/or non-monetary form. The authorized capital announced in documents of incorporation must be formed in not less than 50 per cent by the end of a year following the day of firm's official registration and in a full amount - by the end of two years.

During five years after registration no legal norms, making worse the terms of commercial activity, can be enforced in respect of companies with foreign investments. Moreover, if the share of a foreign partner in an authorized capital is more than 30 per cent, such firms are released from paying profits tax for three years from the moment of the first announcement of having profit. Currency takings from export remain at disposal of such companies in a full amount, excluding sums of tax payments. After paying all taxes investors are guaranteed to repatriate abroad incomes gained from their activity.

According to the Land Code of the Republic of Belarus companies with foreign investments and foreign corporate firms are entitled to long land lease.

At this very moment on the territory of Belarus there are four free economic zones - "Brest", "Minsk", "Gomel-Raton" and "Vitebsk". Foreign investors, realizing their investment projects on the territory of these zones, are able to get significant benefits in doing business compared with common terms acting in the country. These benefits are mostly concerned with tax and customs regulations.

RESIDENTS OF FREE ECONOMIC ZONES PAY THE FOLLOWING TAXES:

profits tax - 15% (in other parts of the republic - 25%)

value added tax (VAT) - 10% (in other parts of the republic - 20%)

income tax - (at the same rate as in the republic)

ecological tax - (at the same rate as in the republic)

social security tax - (at the same rate as in the republic)

excise - (at the same rate as in the republic)

Profits gained by residents of FEZ from realization their own-made produce/services are free of taxation for five years from the day of the announcement of having profit, including first profitable year. Profits invested by the residents of FEZ into the Republic of Belarus are released from profits tax.

Customs and economic policy measures don't apply to goods imported on the territory of the zone from foreign countries. Also when residents of FEZ export their own-made produce outside Belarus they don't pay any customs, no quotas are set and such activity needn't be licensed.

Foreign credits are attracted into the Republic, as a rule, for a specified purpose and then directed on restructuring of the economy, modernization of enterprises, expansion of consumer goods output. The most promising branches of the economy for foreign investment are the following: electronics, automobile industry, petrochemical industry, building, timber processing, consumer goods production, medical equipment production and so on.

The Republic of Belarus has signed international agreements in investment sphere with many countries of the world.

AGREEMENTS ON ASSISTANCE AND MUTUAL DEFENSE OF INVESTMENTS:

ACTING AGREEMENTS: Israel, Czech Republic

AGREEMENTS IN THE PROCESS OF RATIFICATION: Moldova, Tajikistan, Kirghizia, Syrian Arab Republic, India, Egypt, Pakistan, Switzerland, North Korea, Cyprus, Lebanon, Spain, Greece, Cuba, Portugal, Jordan, Tunisia, Catarrh, Yemen, Bahrain, Oman, Saudi Arabia, Arab Emirates, Kuwait, Algeria, Iraq, Philippines, Singapore, Turkey, Germany, France, Netherlands, Romania, Ukraine, Bulgaria, Yugoslavia, Finland, China, Sweden, USA.

AGREEMENTS ON AVOIDING DOUBLE TAXATION IN RESPECT OF TAXES ON INCOMES AND PROPERTY:

Lebanon, Kuwait, Azerbaijan, Mongolia, Austria, Armenia, Israel, Arab Emirates, Estonia, Slovakia, Tajikistan, Switzerland, Cyprus, Iran, Egypt, Yugoslavia, Syrian Arab Republic, India, Romania, Kazakhstan, Estonia, Czech Republic, Kirghizia, Bulgaria, Vietnam.

Until ratification Belarus recognizes agreements signed by the former USSR.

AGREEMENTS ON LEGAL ASSISTANCE, ON PARTNERSHIP AND COOPERATION:

Vietnam, Lithuania, Latvia, Russia, Ukraine, Moldova, Kazakhstan, Uzbekistan, Kirghizia, Turkmenistan, Tajikistan, Georgia, Armenia, Azerbaijan, Poland, China, France, Turkey, Cuba, Bulgaria, Romania, EU members.