Why Set Up Your Business in Belarus?
Home to a population of 9.5 million, Belarus is a landlocked country in Eastern Europe bordered by Ukraine in the south, Russia in northeast and Poland in the west. Belarus’s location in the heart of Europe has its strategic significance in the region as it represents an important transportation hub between Eastern and Western Europe.
An Overview of Belarusian Economy
Belarus has seen stable economic growth over the years. The agriculture in Belarus is diverse with loads of opportunities regardless of the harsh climate in the country. The priority sectors that contribute to the growth of the Belarusian economy include machinery and metal working, oil refining, chemical and petrochemical industry, electric power, consumer goods and food processing, timber and woodworking industry. The Belarusian economy has gained traction as the oil prices continued to climb. In fact, the recent rise in oil prices has boosted the overall economic performance in Belarus.
Other than the top performing oil industry, manufacturing industry in Belarus is also one of the sectors that drive the economic growth in the country. Belarus is currently one of the world’s largest manufacturers where the country has a bigger share in producing products like combine harvesters, flax fibre, mine dump trucks as well as dairy products. On top of that, Belarus trades with more than 190 countries with Russia, Ukraine, China, Great Britain, Germany, and Poland as its major trade partners.
Why Invest in Belarus
Belarus’s advantageous economic offers a promising investment platform for business. The Belarusian government welcomes foreign investors to venture into the country by implementing pro-business policies as well as creating good business environment.
Let’s take a glance at the reasons why investing in Belarus?
- Strategic Location Significance
The country’s strategic geographical location at the crossroads of two main European motorways, the country has direct access to the market of the three Common Economic Space (CES) countries (Armenia, Belarus, Russia, Kazakhstan, Kyrgyzstan) and the quick growing EU markets.
- Well-developed Infrastructure
The well-developed infrastructure in Belarus that includes transport, logistics and communications are, in fact, one of the reasons that attract foreign investors into the country. The optimal link between the CIS countries (Russia in the first place) and the EU countries has been advantageously benefitted foreign countries to locate their manufacturing, logistics, and sale units on the country’s territory.
- Progressive Investment Legislation
Belarusian government has mapped out an effective legal framework for the investment business underpinned by international treaties and the national legislation. The legal framework guarantees investors rights and investment protection in Belarus:
- foreign ownership of property
- full equality of rights to foreign investors
- protection against discrimination about types of ownership
- freedom to repatriate profits outside of Belarus
- Attractive Taxation Policies
The attractive taxation system in Belarus is the game changer that is bringing forth new opportunities for investors as well as increasing business profitability. The important types of tax incentives in Belarus are as follows:
- Exemption from the standard profits tax rate of 18% or its reduction to 9%
- Reduction of the standard personal income tax rate from 13% to 9%
- Exemption from real estate tax
- Privatization Opportunities
The introduction of privatization in the country is a crucial part of Belarus’ investment drive. The privatization programme is designed to see 90% of state-owned businesses transferred to private sector ownership.
- Free Economic Zones
Free Economic Zones (FEZs) were set up to improve its enterprise climate, to create strong private sector enterprise and investment with an enviable array of incentives regardless of their nationalities. Though registered businesses are required to make a minimum investment of 1million if they want to register with a FEZ, they are granted with the following benefits:
- Tax-free profits on all goods and services for five years.
- Imported substitution goods manufactured within a FEZ will get 50% discount on VAT.
- Real estate owned or leased in the FEZ are tax free.
- Exempt from payments to National Agriculture Support Fund.
- No tax imposed vehicle purchase.
- No customs duty on raw materials and equipment imported from outside Belarus.
- Legislation governing firms will not change for seven years.
On a final note, Belarus is rising as one of the favored investment hotspots in EU due to its thriving economy. If you are planning to traipse into the EU markets, Belarus has a lot to offer.