Zonas de Processamento de Exportações (Free Economic Zones)
The most important objectives of Belarusian Free Economic Zones (hereinafter — FEZs) are to encourage the launch and development of enterprises operating new cutting-edge technologies, create jobs and promote exports. Like all over the world, special customs, registration and tax regimes applicable to FEZs provide enterprises with an opportunity to work in particularly favorable conditions.
Presently there are six FEZs in Belarus (one in each Belarusian region, including Minsk):
♦ FEZ «Brest», www.fez.brest.by
♦ FEZ «Gomel-Raton», www.gomelraton.com
♦ FEZ «Minsk», www.fezminsk.by
♦ FEZ «Vitebsk», www.fez-vitebsk.com
♦ FEZ «Mogilev», www.fezmogilev.by
♦ FEZ «Grodnoinvest», www.grodnoinvest.com
N.B. By February 1, 2017 Belarusian FEZs brought together 410 companies, employing more than 123 thousand.
There is a special uniform legal regime for all Belarusian FEZ residents.
In order to become a FEZ resident the following conditions should be met:
♦ invest into a project a minimum worth of 1 million euro (or 500 thousand euro provided the investments are made within 3 years from the registration date);
♦ create and (or) develop export-oriented and (or) import-substituting enterprise.
N.B. FEZ residents are disallowed to:
♦ produce, process, store and sell weapons, ammunition, explosives, explosive devices; radioactive and narcotic drugs, psychotropic substances;
♦ produce alcoholic beverages, except for champagne, wine and beer;
♦ manufacture tobacco products;
♦ produce securities, banknotes and coins, postage stamps;
♦ carry out lottery activity;
♦ broadcast radio and TV programs, except for technical maintenance of radio and television;
♦ provide medical care to people suffering from diseases dangerous to human health;
♦ provide medical care to animals with very dangerous diseases;
♦ perform activities related to the expat employment of citizens of the Republic of Belarus, foreign citizens and stateless persons permanently residing in the Republic of Belarus.
FEZRESIDENTS SHALL ENJOY THE FOLLOWING PRIVILEGES AND PREFERENCES:
1. Home-made exports of goods (or services) or sales of the same to other residents of Belarusian FEZs shall be exempt from income tax for ten years from the date of gross profit announcement ; after a 10-year-period a halved tax rate shall apply (but not over 12%);
2. real estate tax exemption:
♦ covering buildings and facilities built (or acquired) within three years from the date of registration in FEZ;
♦ covering buildings and facilities located on the FEZ territory regardless of purpose (provided products are exported and (or) sold to other residents of Belarusian FEZs);
3. exemption from land tax related to land plots:
♦ applicable within a design-and-construction period but not more than five years from the date of a company’s registration as FEZ resident;
♦ from 01/01/2017 to 31/12/2021, regardless of purpose (provided products are exported and (or) sold to other residents of Belarusian FEZs);
4. exemption from land rent:
♦ applicable within a design-and-construction period, but no longer than five years from the date of registration as a FEZ-resident;
♦ regardless of of purpose (provided products are exported and (or) sold to other residents of Belarusian FEZs;
5. exemption from the stamp duty for a special employment permit for foreign citizens and stateless persons, employed by a FEZ-resident to implement an investment project on the territory of a FEZ;
6. the creation of engineering and transport infrastructure required to implement a FEZ resident’s investment project is prioritized and funded accordingly through the State Investment Program as well as by local budgets (provided a FEZ-resident implements an investment project claimed to disburse a worth of over 10 m euro in investments).
Taxation particularities of FEZs shall not apply to banking and insurance, public catering, gambling, electronic interactive games; securities transactions; sales of goods (works, services) involving full or partial use of FEZ-resident’s fixed assets (owned or held by a FEZ-resident) and (or) FEZ employees’ labour outside its territory.
The main documents that regulate the activities of FEZs in the Republic of Belarus:
Law of the Republic of Belarus of December 7, 1998 № 213-Z «On Free Economic Zones»;
Presidential Decree of June 9, 2005 № 262 «On Some Issues of the Activities of Free Economic Zones on the territory of the Republic of Belarus»;
Presidential Decree of January 31, 2006 № 66 «On Approval of the Regulation on Free Customs Zones established on the territory of Free Economic Zones»;
Presidential Decree on the establishment of FEZs (of March 20, 1996 № 114 «On Free Economic Zones in the Republic of Belarus»; of March 2, 1998 № 93 «On Creating the Free Economic Zones «Minsk» and «Gomel-Raton»; of August 4, 1999 № 458 «On Creating the Free Economic Zone «Vitebsk»; of January 31, 2002 № 66 «On Creating the Free Economic Zone «Mogilev»; of April 16, 2002 № 208 «On Creating the Free Economic Zone «Grodnoinvest»);
Tax Code of the Republic of Belarus (Articles 326 and 327).
Customs
The main document regulating the procedure and conditions for the application of customs legislation to FEZ residents is the Agreement on Free (Special) Economic Zones on the Customs Territory of the Customs Union and Free Customs Zone Procedure of 18 June 2010.
The common customs territory of the Eurasian Economic Union (hereinafter referred to as the Customs Territory of the Union) is the territory of the Republic of Belarus, Republic of Kazakhstan, Russian Federation, Kyrgyz Republic and Republic of Armenia. The Customs Territory of the Customs Union is located within the borders of the Customs Union.
The limits of a free customs zone (hereinafter referred to as FCZ) are assigned for each FEZ-resident upon the latter’s request as well as upon the decision of a FEZ administration in coordination with the customs office in the region, where a FEZ-resident fulfils its economic activities.
When goods are placed under the customs procedure of FCZ they are placed and used within the territory of FCZ without paying customs duties, taxes, and without being subject to non-tariff regulation measures for foreign goods and prohibitions and restrictions for goods of the Customs Union.
N.B. Foreign goods placed under the customs procedure of FCZ retain the status of foreign goods, and goods of the Customs Union, placed under the customs procedure of FCZ, retain the status of goods of the Customs Union.
Goods made (obtained) from goods of the Customs Union and placed under the customs procedure of FCZ, as well as goods made (obtained) from goods of the Customs Union, and placed under the customs procedure of FCZ, and from goods of the Customs Union that have not been placed under the customs procedure of FCZ acquire the status of goods of the Customs Union.
Goods made (obtained) from foreign goods placed under the customs procedure of FCZ, and goods made (obtained) from foreign goods placed under the customs procedure of FCZ and from goods of the Customs Union acquire the status of foreign goods.
When exporting goods outside the territory of FEZ, where the customs procedure of FCZ applies, FEZ-residents shall enjoy the following customs preferences:
exemption from value-added tax, levied by the customs authorities, when a FEZ-resident places goods under the customs procedure of release for domestic consumption that were made (obtained) with the use of foreign goods placed under the customs procedure of FCZ;
exemption from import duties and taxes (for raw materials placed under the customs procedure of FCZ) when exporting final products outside the customs territory of the Union.
