Belarus. Economy update. Natalia Shulzhenko Head of Office, SCHNEIDER GROUP (Minsk) Business Breakfast Russia, St. Petersburg, 10 November 2017

Transcription

1 Belarus. Economy update Natalia Shulzhenko Head of Office, SCHNEIDER GROUP (Minsk) Business Breakfast Russia, St. Petersburg, 10 November 2017

2 Agenda Belarus: key facts & current trends 2018 DB World Bank rankings Prospective industry sectors overview Typical examples of foreign investors Key client portfolio accounting erp import legal tax 2

3 Facts & Advantages For the last two negative" years, GDP actually fell by 6.3%. The last conclusion from EBRD experts that "the economy of Belarus is growing again after two years of recession" GDP, USD bn. 67 th largest economy in the world measured by GDP 65,5 75,2 77,7 56,8 47,5 Major market with 9,5 million inhabitants Direct access to the market of EAEU *Source: State Statistics Service (Belstat) Information presented on nominal GDP. Competitive investment conditions Developed logistics infrastructure Qualified and cheap labor force Western accounting approach ERP to doing import a legal business tax 3

4 News, key facts & current trends 1 Refinancing rate has decreased 8 times in 2017 (11% current) 2 Revolutionary set of documents on liberalization of economy will be signed till the end of Tax on Google (VAT on digital services to individuals) since The US and EU suspended many sanctions in 2015 and finally EU cancelled the majority of sanctions on 15 February th ranking in 2018 World Bank DB report (37 th LY) accounting erp import legal tax 4

5 Belarus DB Ranking th 37th (LY) accounting ERP import legal tax 5

6 Belarus DB Ranking th position in 2017 DB report. In accordance with the last year the change is insignificant. This one-point decline shows that other countries managed to conduct a more active reforming activity. Topic Rankings DB 2018 Rank DB 2017 Rank Change in Rank Starting a Business Dealing with Construction Permits Getting Electricity Registering Property 5 5 No change Getting Credit Protecting Investors Paying Taxes Trading Across Borders No change Enforcing Contracts Resolving Insolvency Doing Business Overall Rank Source: World bank Doing Business, accounting ERP import legal tax 6

7 Prospective industry sectors overview If an Investor. focuses on IT analysis, engineering and Software development is planning to invest at least EUR 500 k. in the set up of export-oriented & import-substituting production facilities is planning to invest at least USD 5 mln. in electronics, thin chemistry, biotechnology, mechanical engineering and etc. is planning to produce goods, perform works or services in rural areas and small towns is planning to construct and further operate various facilities It may consider benefiting from High Tech Park FEZ (localization) Industrial Park Great Stone (localization) Rural areas Decree No. 6 dd Investment or PPP agreement accounting erp import legal tax 7

8 High Technology Park (HTP) Virtual Park (extraterritoriality), created in 2005 (160 companies currently) Eligible activity is limited to analysis, development and software implementation of information systems and data processing Approval process is rather straightforward - attention to the business plan Agreement between the HTP resident and HTP Administration should be concluded HTP resident has to pay 1% on revenues to the HTP Administration (on quarterly basis) accounting erp import legal tax 8

9 Tax benefits in HTP Benefits according to HTP tax treatment: CIT exemption VAT exemption Real estate tax exemption Customs duty and VAT exemption for technological equipment imported by HTP residents 5% reduced withholding tax - on dividends (12%), interest (10%) and royalties (15%), unless a more preferential regime is provided by the Double Tax Treaties Offshore tax exemption (on dividends only) 9% - Reduced personal income tax (PIT) HTP treatment to be substantially expanded shortly!!! accounting erp import legal tax 9

10 Examples of investors in HTP Ciklum accounting erp import legal tax 10

11 Industrial Park Great Stone Chinese-Belarusian project, founded in 2012, about 20 residents currently Huge territory (8048 ha) located 25 km from Minsk Requirements for residents of the Industrial Park: Investment in the sectors: electronics, thin chemistry, biotechnologies, mechanical engineering or new materials Minimum investments: 5 Mio USD accounting erp import legal tax 11

12 Tax Benefits in The special tax treatment is applicable for a period of 50 years (2062) and provides the following tax benefits: CIT exemption - for 10 years, afterwards reducing by half for 10 more years (9% CIT rate is applicable) VAT exemption on imports Real estate tax exemption - for 10 years, afterwards reducing by half for 10 more years (0,5% rate is applicable) WHT exemption for 5 years (on dividends), on royalties - 5% until 2027 Land Tax - 10 years exemption, afterwards reducing by half for 10 more years 9% - Reduced personal income tax (PIT) accounting erp import legal tax 12

13 Key client portfolio accounting erp import legal tax 13

14 Natalia Shulzhenko Head of Office, SCHNEIDER GROUP The exclusive right to the content of this presentation including the rights of translation, reproduction, transmittal, distribution and usage of the presentation and parts of it, in any way, as well as the rights to the company s logo and name SCHNEIDER GROUP, in existing and future publications in printed or electronic form, and the ability to confer rights to a third party belong to SCHNEIDER GROUP. The reproduction, alteration, transmittal or any distribution or usage of this presentation or parts of it, as well as of the company s logo or name SCHNEIDER GROUP in any way, need the written permission of SCHNEIDER GROUP in advance and shall be accompanied with the link to the SCHNEIDER GROUP website and reference to the copyright permission. SCHNEIDER GROUP accounting erp import legal tax 14

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