In 2012, within the interstate Chinese-Belarusian cooperation and the relevant intergovernmental agreement, a special economic zone, the China-Belarus Industrial Park “Great Stone” (hereinafter – park) was created in Belarus. This park is a territorial formation which comprises the area of 112.5 sq. km., located in the territory of Smolevichsky district, Minsk region (25 km from the capital – the city of Minsk). One of the main purposes of its creation is to attract investment for the organization and development of high-tech and competitive innovative industries with high export potential.
The following tax benefits and preferences are applied to residents for fifty years:
1. Tax exemption: for property tax, land tax.
2. Benefits in respect of value added tax (VAT):
deduction of the full amount of VAT in the development of construction projects;
exemption from VAT sales turnover, and lease (sublease), leasing to the residents of the park or a joint Belarusian-Chinese company of real estate objects, land plots; free transfer of project documentation and objects of unfinished capital construction in the territory of the park to them; turnover of the list of services, works, property rights, established by the law (in the field of intellectual property; information; personnel hiring; lease of movable property; development of computer programs and databases; provision of disk space; customer search etc.);
it is not recognized as an object of VAT turnover on the implementation of engineering and transport infrastructure to organizations operating them, or having 50 percent of the shares of a joint Belarusian-Chinese company;
3. Income tax benefits:
exemption from tax in respect of goods (works, services) of its own production, produced by it in the territory of the park for the first ten years (hereinafter – 50% of the rate (9% instead of 18%);
on dividends accrued to Belarusian founders (participants, shareholders, owners of residents’ property), the rate of 0% for 5 years.
4. Benefits in respect of income tax of foreign organizations not operating in the Republic of Belarus through a permanent representation:
on dividends accrued to foreign founders rate of 0% for 5 years.
for owners of royalty income accrued by residents, the rate is 5% until January 1, 2027.
5. Income tax benefits:
on dividends accrued to both Belarusian and foreign founders – the rate of 0% for five years.
under employment contracts – the rate of 9%.
income not exceeding 500 basic units per year is exempt from tax.
Other preferences provided to residents:
-the possibility of functioning of the bond (free trade) zone in the territory of the park;
-the principle of “one station” – the investor receives the whole complex of public services in one body – the park administration, reducing the time of procedures;
-the conducting currency exchange operations in the domestic market without restrictions;
-the application of free pricing without product quotas;
-the preferential procedure for the tariffs formation for some energy resources;
-the exemption from payment of state fee for special permits to attract foreign labor, the right to engage in labor activities of foreigner citizens;
-the visa-free entry to the Republic of Belarus for persons interested in investing and residents (stay up to 180 days per year);
-the registration of foreign citizens involved in construction;
-the guarantee of investor protection from changes in legislation in the party, unfavorable for them.
To obtain the status of the park resident you should:
1. to register a legal entity with the location in the territory of the park;
2. to sign a contract with the administration of the park;
3. to have the intention to implement an investment project worth at least 5 mln. USD
(or 500 thousand USD within three-year term);
4. the types of activity in which projects can be implemented have to meet the objectives of the park. These include: mechanical engineering, electronics and telecommunications, pharmaceutics, fine chemicals, biotechnology, new materials, complex logistics, E-commerce, activities related to the storage and processing of large amounts of data, social and cultural activities, research and development (R&D).
The administration may register the residents who implement projects in other areas of activity and with a different amount of investment, if such projects meet the objectives of the industrial park.
The country of origin of capital is not relevant for obtaining a resident status.
39 companies are already the residents of the park, 28 of them are foreign companies. Among the founders are the American company IPG Photonics, German company Duisburger Hafen AG, German company Dieffenbacher System-Automation GmbH; Austrian group Kronospan; Chinese Corporations in the field of telecommunications HUAWEI and ZTE; Chinese Corporations Zoomlien, XINZHU, Weichai Power, investing in machinery; Krypton and others.
The special legal regime of the park is one of the best for conducting commercial activity in the territory of Belarus and Eurasian Economic Community. Benefits and preferences are aimed at reducing the costs of investors throughout their activities, and not only during the development of investments. Taking into account the fact that the economy of Belarus has a diversified character and well-developed export potential, the park, acting as a link for trade and technology exchange between the West and East, is an unprecedented profitable platform for the development of both large and medium-sized and small businesses.