Экономические науки/Инвестиционная деятельность и фондовые рынки.

Шелест Н.А., Черняцова А.В., научный руководитель – Бутрина Л.В.

Полесский государственный университет, Республика Беларусь

BELARUS: INVESTMENT CLIMATE

The government of Belarus officially welcomes foreign investment, which is seen as a source of new production technologies, jobs and hard currency. The factors that attract foreign businessmen to Belarus include good geographical position, a well-developed infrastructure, highly qualified and relatively inexpensive labor force.

Direct foreign investments are an important element of stabilization of economy of Belarus and its market transformation. World experience shows that direct foreign investments have huge value for strengthening of economy of the reformed country and its integration into the world economy as with their help the republic has an opportunity to introduce high technologies, "know-how", the equipment, to finance manufacture of the goods and services [4, p. 22].

According to the Investment Code of the Republic of Belarus:

The following shall be recognized as foreign investors in the Republic of Belarus:

• any foreign states and their administrative-territorial units represented by competent

• authorities;

• international organizations;

• foreign legal entities;

• foreign organizations being not legal entities, – established in compliance with the

• legislation of any foreign states;

• foreign citizens;

• natural persons who have their permanent residence outside the Republic of Belarus.

The peculiarities of foreign investors’ activities regulation shall be specified by this Code, other legislative acts of the Republic of Belarus, including the international treaties of the Republic of Belarus [6].

Belarus: a place to do business

“We want to be one of the top 30 countries to do business in within the next two to three years”
Nikolai Zaichenko, Ex-Minister of Economy of the Republic of Belarus

There are numerous reasons why Belarus is an attractive foreign investment destination. There is full protection given to foreign investments and there are a variety of channels available to businesses to engage with the government.

According to IFC (International Financial Corporation), that evaluates business climate all over the world, Belarusian investment legislation is one of the best in the CIS and it deserves appreciation [2].

International Investors have not only governmental guarantees for international investments against illegal alienation and guarantees against deterioration of legal frameworks (for a certain period of time organization is assured against and could not obey legislative acts, that worsening doing business). They also could lay claim to governmental assistance in financial resources, al the kind of informational and administration support.

Concrete steps for investment climate improvement.

In order to increase doing business conditions for international investors in Belarus, its government took a set of measures to improve investment climate.

From 9th of November 2009 joins into force A Decree by the President of Republic of Belarus № 10 of the 06.08.2009, №4 of 06.06.2011“On Creating Additional Conditions for Investment Activities in the Republic of Belarus”:

An investor and (or) an organization, established by this investor or with his participation

have the right to:

• construct facilities by the investment project with the development of design estimates simultaneously. The investor has the right to apply building norms with availability of project documentation, made in accordance with the norms of the country-investor introduced in the Republic of Belarus, without adaptation to the rules valid in the Republic of Belarus, with expert examination and linkage to the local conditions

• rent a land without holding an auction for the right to make a land rent treaty with the paper work concerning the allotment and building simultaneously

• set a general planning organization without holding a contract auction

• apply the full volume tax deduction of VAT, paid when purchasing goods (works, services), property interest regardless of VAT amount, calculated for the realization of goods (works, services), property interest

are exempt from:

• transferring to republican budget, local budget or development fund of the appropriate free economic zone the payment for the right to make a land rent treaty

• land tax or rental payment for the state-owned land given for building facilities, for the period of their projecting and construction

• VAT and profit tax payment in view of gratuitous transfer of state-owned ownership to the investor

• innovation fund payments for the period of expiration date of the investment contract

• recovery of agricultural and (or) forestry production losses caused by the withdrawal of lands

• entrance customs duties and VAT payments when importing equipment and fabricated parts on the territory of the Republic of Belarus for the investment project realization

• state duty payment for the issuance of a permission to work in the Republic of Belarus for foreign citizens and stateless persons; mentioned foreign citizens and stateless persons are free from state duty payment for issuance of a permission for temporary residence in the Republic of Belarus.

In order to create favorable conditions for competitiveness improvement of the Belarusian industries, based on new and high technologies, to attract domestic and foreign investment to the industry the country's government decided to establish a "High-Tech Park, special zone for software, information, communication, and other new and high technologies development [3].

The reasons to invest in Belarus

ü Political stability and consensus in society

ü Favourable geographical location with the developed transport infrastructure

ü Free access to the market of Russian Federation and Kazakhstan and to the EU

ü Highly qualified labour, scientific and technical potential

ü Low crime and corruption level

ü Free Economic Zones and High Technologies Park

ü National Agency Of Investment and Privatization

ü Progressive investment legislation

ü The competition of the majority of branches is not very high

All the factors above facilitate the activity of foreign investors in Belarus.

The changes specified above have led to Belarus taking significant place in the ratings of the World Bank and International Financial Corporation among the leader countries in 2011 according to “Doing Business 2011” report and the 68th place in the general ratings. According to results of research on business climate in 2010 Belarus took the 64th place among 183 countries in the ratings according “Doing Business 2010” report. To our opinion Belarus deserves even better rank in this chart, because methodology of evaluation of IFC does not consider preferential taxation conditions that our government offered to international investor. Integral assessment of tax burden is based on common business conditions, and preferential taxation system decreases burden for international investor almost two times.

Improving the investment climate in Belarus for foreign investors, the government is not opening closed doors but is just opening them wider: A significant number of foreign and domestic companies that are leaders in the CIS and Europe are already successfully operating in Belarus.

Welcome to Belarus, a country of great opportunity.

Literature

Desai, Mihir A., C. Fritz Foley and James R. Hines, Jr. "Foreign Direct Investment And The Domestic Capital Stock," American Economic Review, 2005, v95(2,May), 33-38.

1. http://www.invest.belarus.by

2. The Decrees of President of the Republic of Belarus№10 of 06.08.2009 ; №4 of 06.06.2011

3. Г.Новик, А. Бабин «Привлечение иностранных инвестиций: выбор стратегии» / «Банковский вестник» №12 2002г с.24

4. ЗАКОН РЕСПУБЛИКИ БЕЛАРУСЬ ОБ ИНОСТРАННЫХ ИНВЕСТИЦИЯХ НА ТЕРРИТОРИИ РЕСПУБЛИКИ БЕЛАРУСЬ №37-3 от 22.01.01 г.

5. Инвестиционный кодекс Республики Беларусь от 22.06.2001 // Электронная информационно-правовая база «Консультант плюс» от 30.04.2002.