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Invest in Belarus? INVEST IN BELARUS, INVEST IN THE FUTURE

Ноя 05, 2017
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Competition among the huge number of investors in modern markets means not only difficulty in finding new investment opportunities, but also increased complication in selecting prospective interests. When determining a platform for strategic investment, transparent and full information with minimized risks remains a primary priority for investors. Belarus offers both a clear and secure market.
“Why Belarus? Two words: smart people,” notes Cliff Reeves, General Manager of Microsoft New Business-Models Development. “Belarus has a reputation of being a country with high scientific potential.”
Belarus inherited enormous industrial potential from the Soviet Union, and the nation has capitalized on this and further expanded production. The manufacturing of the largest dump truck in the world, BelAZ, notably mentioned in the Guinness Book of Records, and the global prevalence of Belarusian tractors indicate the high standards of a prime industry. Bloomberg additionally pointed out Belarus’s manufacturing capability by ranking the country as the second most innovative.
Apart from production facilities, the country is rich in well-disciplined and highly qualified specialists. Almost 30% of all the working people are involved in scientific disciplines. Belarus ranks 35th in the world, according to the World Intellectual Property Organization, in terms of the number of sealed patents.
Belarus takes pride in having achieved spectacular success with its top ranking in the information technology (IT) sphere. Software products that are developed by Belarusians are entering the market and pushing Belarus up the information and communications technology (ICT) development index. Last year, Belarus reached 38th in the world, jumping three spots.
“If you have a mission impossible project in software development, send it to Belarus,” Drew Guff, Managing Director and Founding Partner of Siguler Guff & Company, points out. With standout products like Viber and hugely successful worldwide games like World of Tanks, this statement proves completely credible. Belarus maintains the world’s biggest per capita income from IT services exported.
While production expands, the level of average wages across the country remains low in comparison with developed economies. More importantly, wages stay low even in comparison with other countries in the region. For instance, while in Belarus people are paid on average 451 USD per month, in Russia, even during economic strife, a person earns 651 USD, and in Kazakhstan – 661 USD.
Consider the strategic geographic location of the country, stationed as a main frontier between the Eurasian Economic Union (EEU) and the European Union (EU), in order to better understand Belarus’s capacities. Numerous opportunities have opened up for those doing business with Belarus, as it enjoys a relationship with the EEU. For example, a product certified in Belarus can easily be exported to Russia, Kazakhstan, Kyrgyzstan and Armenia, without having to overcome any significant barriers. The expansion strategy in these five markets offers savings to investors and consolidates positions by using the most affordable approach.
“We see Belarus as an important gateway to the Eurasian Customs Union market,” says Laurence Bower, Senior Vice President EMEA at Culligan International. “This together with the support offered by government agencies and strong skills within the workforce are the reasons we have chosen to locate an assembly facility near [the capital] Minsk with plans to develop into full production in the near future”.
The economies of rising nations hold many unsaturated market niches. Investors emphasize low competition in certain market segments as one of the investment advantages of Belarus. In order to foster the process of producing new goods and services, the government makes significant efforts by providing a stable regulatory framework, simplifying procedures, and enhancing the level of income with the help of special preferential regulations.
The main strategy of the government is to have a very strong monetary policy and good budget consolidation in response to all of these very difficult factors that we face, to maintain the economic potential of our country and to create the necessary environment in order to protect foreign investors, as well as an environment for efficient investment in our country.
A Law on Investments ensures that foreign investors enjoy equal business conditions to individuals and legal entities from the Republic of Belarus. Investors are
guaranteed free transfer of profits from the Republic of Belarus and maintain the ability to appeal for protection of their rights to international arbitration bodies and the International Centre for Settlement of Investment Disputes.
Besides implementing its progressive local investment legislation, Belarus also joined more than 60 agreements on assistance in the mutual protection of investments. Since 2012, the country has been a member of the Multilateral Investment Guarantee Agency. Protection of intellectual property rights in Belarus is defined by a number of national laws and international treaties. The country participates in multiple conventions on both copyright and proprietary rights. Being a member of the World Intellectual Property Organization (WIPO) since 1970, Belarus participates in many international IP agreements that are administrated by WIPO. Belarus is also a member of several regional IP agreements.
Apart from the guarantees that are specified by national legislation in Belarus along with bilateral international agreements, there is a special economic zone in Belarus. The Industrial Park, “Great Stone” or the “Park”, grants investors with a supplementary guarantee of invariability in preferential treatment, even if new taxes and fees are established in the country. Preferences provided by the Park are numerous, among them exemption from customs duties and value-added tax (VAT), a free customs zone, exemption from tax on dividend income, exemption from all corporate taxes for 10 years from the date of registration as a Park resident, and reduction of the effective tax rate by 50% for the next 10 years of activity in the Park.
“In my opinion, Belarus is potentially a very profitable and interesting country for any business,” says Rusty Butler, Associate Vice President for International Affairs and Diplomacy at Utah Valley University. “I visited the country and understand how its economy is managed. I understand the people and opportunities that Belarus has. The new industrial park in Belarus has good prospects, too. This project is interesting for those companies that are planning to export products to neighboring countries”.
Another attractive approach to operating within Belarus, which is not surprising when taking into account the country’s specialization in IT services, is obtaining residency at the Hi-Tech Park (HTP). a virtual zone in Minsk that supports projects in computer science and technology. HTP residents are exempt from all taxes and payments to the state budget with the exception of the social security tax. By providing high-quality software products at low costs, all participating and world-renowned IT companies achieved success as members of HTP.
Belarusian law provides strong tax incentives for businesses in rural areas and in towns with populations of fewer than 50,000 people, and for those entering an investment agreement with the state. Six Free Economic Zones (FEZs) are spread throughout all major Belarusian cities, providing benefits in taxes, customs and registration.
To simplify the investment process, the National Agency of Investment and Privatization (NAIP) offers uncomplicated establishment. The institution acts as a “one-stop shop” for foreign investors. The NAIP offers services free of cost to facilitate relationships between the government and investors. Professionals equip you with requested information within 24 hours. NAIP maintains an updated register of all investment offers within the country, including investment projects, land lots, real estate, and communal enterprises that offer shares for purchase. These offers can be initiated by state-owned or private companies.
With such favorable conditions for business, Belarus already attracts numerous global, respected companies such as HP, Coca-Cola, Omnicom/BBDO, Exide Technologies, Bosch, Culligan, Stadler, Silgan Holdings Inc., Snap-on, Kapch, Heineken, Raiffeisen Bank, Microsoft, IBM, Pepsi, ConvaTec, Danone, Unilever, Henkel, and United Parcel Group. It is evident that distinguished and established agencies are already capitalizing on Belarus’s expanding and protected market.
Contact Information:
Ministry of Economy of the Republic of Belarus 14 Bersona Street, Minsk, 220030 (+375 17) 222-60-48 http://www.economy.gov.by/ minec@economy.gov.by
You can reach Aleksander Zaborovskiy at mail@investinbelarus.by

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