Investment activities in communities with population up to 50,000 people

Commercial organizations with foreign investments established (excluding reorganizations) after the 1st of April 2008 in locations with population up to 50,000 people, and carrying out their activity in these locations are exempt from a number of taxes and collections for a period of five years from the date of establishment.

 

Main act of legislation of the Republic of Belarus regulating entities’ activity in locations with population up to 50,000 people is the Decree ?1 of the President of the Republic of Belarus of the 28th of January 2008 On the Production Stimulation and Sale of Goods (Works, Services, etc.).

 

Commercial organizations with foreign investments are exempt from the requirement to sell on an obligatory basis foreign currency received from operations with legal entities – non-residents and individuals - non-residents on sale of goods (work, services) of own production, including receipts from the leased property. The said exemption is applicable for five years from the date of establishment of the commercial organization with foreign investment.

 

The following is not applicable in respect of commercial organizations with foreign investment engaged in purchase of raw materials, assembling parts and materials for  the purpose of own production, as well as foreign trade in goods of own production:
- Measures of non-tariffs regulation by means of establishing quantitative and/or other limitations;
- Exceptional rights on carrying out foreign trade in certain types of goods;
- Requirement on obligatory entering into deals at the exchange market of joint stock company Belarusian Universal Commodity Exchange;
- Establishing floor price on imported goods and price ceiling on exported goods;
- Special procedures on purchase, supply or tenders, held by the authorized state bodies or committees.

Commercial organizations with foreign investment carrying out business activities in the Republic of Belarus on production and sale of own goods (work, services) have the right to the following:
- Autonomous determination of terms, volumes, types of purchased raw materials, assembling parts and materials, as well as terms, volumes, types of sale of goods (work, services) of own production;

- Autonomous establishment and application of free prices (tariffs) on goods (work, services) of own production, except for goods of social importance, as per list approved by the Council of Ministers of the Republic of Belarus;
- Autonomous determination of suppliers or buyers of goods (work, services) for own production and of own production;
- Autonomous determination of salary paid to employees, but not less than the minimum amount determined by the Council of Ministers of the Republic of Belarus;
- Insurance of own proprietary interests with insurance companies and insurance brokers established outside the Republic of Belarus.

 

The above mentioned exemptions are not applicable for the following:
-Banks, non-banking financial organizations, investment funds, insurance companies
- Professional participants of stock markets;
- Residents of free economic zones and the Park of High Technologies;
- Commercial organizations with foreign investment subject to simplified taxation;
- Commercial organizations with foreign investment carrying out the following types of activity:
    Production of goods (work, services) with the use of fixed assets that belong to the organization subject to property rights or other proprietary interests and/or labor of employees of the same organization, outside the location in which the organization carries out its main activity;
    Production of agricultural goods, provided the organization pays the unified tax for agricultural producers;
    Gambling business;
    Activities, associated with state defense in part of investments, entrepreneurship and other economic activities;
    Processing, storage, sale of weapons, ammunition, explosive materials and devices;
    Processing, storage, deactivation, sale of radioactive and other hazardous materials;
    Processing, storage, deactivation, sale of drugs, psychotropic substances and their precursors;
    Seeding, growing, processing, storage, sale of crop plants, containing drugs, psychotropic or toxic substances;
    Production and/or sale of alcohol and tobacco production;
    Producing of securities, currency notes and coins, post stamps;
    Publishing, establishment of mass media, production and broadcasting of mass media, including radio and TV broadcasting, as well as preparation and broadcasting of radio and TV programs, and excluding technical servicing of radio and TV;
    Medical treatment of persons suffering from diseases that are of serious hazard to the health of population;
    Medical treatment of animals suffering from dangerous illnesses.

 

Commercial organizations with foreign investment, except for organizations that are not subject to the above mentioned exemptions, importing, as a contribution to the charter fund, production equipment, assembling and spare parts to it (subject to customs clearance) are exempt from import duties of such goods and VAT on them. The total amount of such goods should not exceed the amount of non-monetary contribution stated in the constituting documents of such organizations.

In case of status loss, liquidation or cessation of activities by a commercial organization with foreign investment through the reorganization process, or loss of the right on exemptions during the five years period since the date of state registration or during the three year period after the end of this period the organization is obliged to pay taxes and duties for the whole period the organization was exempt from them.

Tax liability on tax charges and VAT on imported goods that are exempt from taxation are subject to repayment in case of liquidation of the commercial organization with foreign investment following the founders' decision, and in case of carrying out by this organization of operations providing for transfer of the right for ownership on the imported goods or in case of transfer of such goods into temporary use (except for transfer to organizations applying the above said exemptions), and also in case of loss by the organization of the right to apply the exemptions during the three year period after the goods have been cleared at customs.