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REPUBLIC OF BELARUS Opportunities for business cooperation

REPUBLIC OF

BELARUS

Opportunities for business cooperation

Справочное издание

Республика Беларусь. возможности делового сотрудничества На английском языке

Ответственный за выпуск В. Л. Дубовский Редактор С. А. Ищенко Перевод на английский Т. А. Горбель Компьютерная подготовка: М. Ш. Валиев, М. И. Лазук, О. Н. Павлова Фото: В. Л. Дубовский (обложка), из архива ЗАО «Юнипак»

Подписано в печать 14.12.2009. Формат 60х90/8 Бумага мелованная. Печать офсетная. Усл.-печ. л. 4,5. Уч.-изд. л. 4,6. Издательство ЗАО «Юнипак». ЛИ № 02330/0150278 от 03.05.2008 Типография ИП «Альтиора – живые краски». ЛП № 02330/0150479 от 25.02.2009 Тираж 1500. Заказ 7153

ISBN 978-985-6802-37-2

© Министерство иностранных дел Республики Беларусь, 2009

© Оформление. ЗАО «Юнипак», 2009

REPUBLIC OF BELARUS Opportunities for business cooperation

REPUBLIC OF

BELARUS

Opportunities for business cooperation

REPUBLIC OF BELARUS Opportunities for business cooperation
REPUBLIC OF BELARUS Opportunities for business cooperation

CONTENTS

MAIN ADVANTAGES

4

TransporT

18

HISTORY. PEOPLE. STATE

6

LOGISTICS

20

INTEGRATION THROUGH ECONOMY

8

TIMBER INDUSTRY

22

BEST CONDITIONS FOR FOREIGN INVESTMENTS

10

Banking and Finance

24

DEVELOPMENT PRIORITIES

12

inFormaTion

Technologies

26

REGIONS

14

TelecommunicaTions

28

AGRICULTURAL COMPLEX

16

science

30

MAIN

ADVANTAGES

Belarus is the most dynamically developing country on post-Soviet territory.

All regions have conditions favourable for the best start of your business. Geographical centre of Europe on the crossroads of West-East, North- South. Longest border line with the European Union (Lithuania, Latvia, Poland). New opportunities opening thanks to EU program “Eastern Partnership” with participation of Azerbaijan, Armenia, Belarus, Georgia, Moldova and Ukraine. Free entrance to capacious Eurasian market, participation in Customs Union with Russia and Kazakhstan. Political, economic, social stability. Safe living, security. Low corruption level. Fourth place in the world among the top reforming countries in respect to business doing legislation improvement according to the Doing Business 2010 report of the International Financial Corporation and World Bank.

4

of the International Financial Corporation and World Bank. 4 Legislative protection of the rights of foreign

Legislative protection of the rights of foreign investors and preferential taxation. Sole country in the CIS with an Investments Code. There exist six free economic zones (Brest, Vitebsk, Gomel, Grodno, Minsk, Mogilev) and High Technologies Park – free-tax havens for investors. Belarus belongs to the group of countries with the highest human potential development index. It has a numerous middle class and presence of highly educated, disciplined labor force employed in modern industries. Developed and various industrial, scientific, modern infrastructure with high level of information technologies. Two pan-European transport corridors. Broad transport network. Low operational costs in the country capital Minsk and, specifically, across the regions.

5

HISTORY. PEOPLE. STATE

Belarus is an independent state in Europe, a country with unique nature, millennia-long history, rich culture and vast opportunities for development.

Belarus ranks 13 th in Europe for its territory area (207.6 thousand sq. km.). It’s just slightly smaller than Great Britain, Romania, almost twice as large as Portugal, Hungary and almost five times bigger than the Netherlands. Country length from north to south is 560 km and from east to west – 650 km. Distance from capital Minsk to Warsaw is 550 km, Moscow – 700 km, Kiev – 579 km, Vilnius – 185 km, Berlin – 1140 km, Stockholm – 1419 km. Populated by more than 9.670 million people (as of early 2009) and repre- sented by over 100 nationalities. The Republic of Belarus is a unitary democratic social and constitution- al state. The supreme representative and legislative authority is bicameral National Assembly. The President is a leader of the State. The supreme execu- tive authority is the Council of Ministers. More than 2270 non-governmental and non-profit public organizations are registered including political parties, professional unions, creative unions, sports societies and other. Administratively, the country is divided into six regions (their centers – Minsk, Brest, Vitebsk, Gomel, Grodno, Mogilev) which include 118 districts. 110 towns are located on their territory including 15 cities with population exceeding 100 thousand persons, 103 urban villages.

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exceeding 100 thousand persons, 103 urban villages. 6 The capital is Minsk with population exceeding 1.8

The capital is Minsk with population exceeding 1.8 million people. Main religions: Orthodoxy, Catholicism, Protestantism. There are also Islam and Judaism followers. People of Belarus are hard-working, committed, patriotic, tolerant, patient and persistent. Traditions and features of the national character were formed in the course of complex history. The country was engulfed by many military conflicts, World Wars, national liberation revolts, revolutions and repressions. The first convention of the RSDWP took place in Minsk in 1898. This party later transformed into the Communist Bolshevist Party and in 1917 orga- nized a revolution in Russia. The USSR and Soviet power collapse was initiated in 1991 in Viskuli on the territory of Belovezhskaya Pushcha – the oldest natural reserve on the territory of Belarus and Europe. The common historic past with Europe gave rise to traditions dating back to the Middle Ages, Magdeburg rights which many towns used to have and to the code of local laws – Statute of the Great Duchy of Lithuania.

7

INTEGRATION THROUGH ECONOMY

Belarus is deeply integrated into international economy.

Export orientation of Belarusian production, which amounts to 60% of GDP and is constantly growing indicates openness of the economy. In 2008 export of products amounted to USD 32.6 bn. Belarusian products are ex- ported to 139 countries. Major consumers of goods and services abroad – Russia, CIS countries, EU and, in recent years, countries of Asia, America and Africa. As of 1 January 2009, there existed over 4880 companies in Belarus with participation of investors from over 90 countries. Joint ventures were organized with German concern MAN (manufacturing of trucks), Carl Zeiss (production of optic goods). Among success stories are such foreign compa- nies as Coca-Cola Beverages Belorussia (production of beverages), Restaurants McDonalds (catering), Chess-Bel (oil products processing), Unomedical (production of disposable medical items), Freze- nius (manufacturing of medical equipment), Mobilkom Austria Group (tele- communications) and others. Import of goods in 2008 reached USD 39.4 bn.

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and others. Import of goods in 2008 reached USD 39.4 bn. 8 The negative balance of

The negative balance of international sale was first of all caused by prices increase for imported energy sources and raw materials. To rectify the im - balance, there is a growth in services exports. In 2008, it amounted to USD 4.26 bn and exceeded services import for USD 1.7 bn. From the start of 2000, Belarus demonstrates active improvement of invest- ment climate as an element of economic liberalization. It’s mentioned in the studies of the World Bank, Heritage Foundation, UNCTAD, IFC and others. In 2007, Belarus was assigned a sovereign credit rating by Standard & Poor’s. In 2009, the agency re-confirmed long-term foreign and national currency ratings of Belarus “B+” and “BB” correspondingly. For a second year in a row Belarus belongs to the top 10 countries-leaders, most active reformers of business activities regulation. As a result, the recent years have recorded a 2-3 times growth of invest- ments over GDP growth rate, with a share of capital investments perma- nently exceeding 25%.

9

BEST CONDITIONS FOR FOREIGN INVESTMENTS

Companies and commercial enterprises with foreign investments have certain advantages. Belarus is the right country to embark on ambi- tious projects.

For the past 5 years the inward foreign investments in the country amounted to USD 19.3 bn. Of those, the direct investments accounted for USD 5.7 bn, of them the worth of USD 2.3 bn received in 2008. Most appealing to the foreign investors were heavy industry (42.9% of the total volume of investments in 2008), trade and catering (8.5%), transportation (6.3%), communications (4.1%), building (1.6%). The capital investments focused, in the first place, on electronics, ma- chine building, petrochemical complex, timber processing, manufacturing of consumer goods and food, processing of secondary raw materials and manufacturing of medical equipment. Projects are being realized jointly with foreign investors at Mogilevkhim- volokno, Belarusian Brewery Siabar. Such companies as Lukoil, Slavneft, Sistema, Itera-Group, Gazprom, Gaz- prombank, MTS, Zepter International, Raiffeisen Bank, Heineken N. V. and others are among the biggest foreign investors. The banking system is of big interest for investors. Most important conditions for making investments in Belarus:

• Starting from 1 February 2009, the declaration-based registration was introduced

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2009, the declaration-based registration was introduced 10 for commercial companies except for banks and other non-bank

for commercial companies except for banks and other non-bank financial organizations. Registration is performed on the same day when necessary documents are presented. Company liquidation procedure is simplified.

• For the state registration of a legal person it is only necessary to submit an application, charter and duty payment confirmation.

• The country operates “One Stop Shop” for the investor.

• The Investment Code of the Republic of Belarus was adopted in 2001.

• Belarus concluded agreements about mutual protection of investments with almost all major countries-donors.

• Capital fully protected from nationalization and confiscation.

• Profit repatriation ensured.

• Unregulated pricing for new products.

• For all new manufacturing companies in towns populated by less than 50 thousand there is a regime equivalent to free economic zone for 5 years period.

• Land is provided for rental without bids or auction at a fixed rate.

• Customs payments and VAT cancelled for equipment imported for investment

projects.

• Possibility to start the construction of a new facility simultaneously with its designing.

11

DEVELOPMENT

PRIORITIES

Belarus is one of the economically developed countries of Eastern Europe, CIS. In its new- est history it makes confident steps forward – modernizes production facilities, increases industrial and scientific potential.

GDP growth rate in 2008 was 110% compared to the previous year or USD 60.3 bn. For the past five years (2004-2008) GDP would grow by an average of 9.9%. The IMF estimates that GDP per capita adjusted by Purchasing Power Parity reached USD 12,291.4 in 2008, close to that of, say, Bulgaria and Romania. The robust economic growth is underpinned by environment-friendly re- source- and energy-saving technologies, enhanced competitive features. Structurally, economy is dominated by industrial sectors numbering as many as more than 100. Over 20 thousand enterprises and productions operate in Belarus. Only 10% of them produce over 60% of industrial products. High level of production concentration is inherent to fuel industry, ferrous metallurgy, chemical and petrochemical industry where three biggest enter- prises account for over 60% of all industrial output. Central to the Belarusian industry are metalwork, chemical and pet- rochemical sectors, power industry, light and food industry, medical and

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power industry, light and food industry, medical and 12 microbiological industry, timber and timber processing,

microbiological industry, timber and timber processing, industry of building materials. Belarus manufactures trucks, tractors, agricultural machines, buses, trol- leybuses, trams, machines, lasers, complex radio-electronics and devices, televisions, computers, watches, artificial diamonds, motorcycles, bicycles, fridges, washing machines, electrical and gas cookers, medicines. The key enterprises are Belarusian Automobile Plant (BelAZ), Minsk Wheel Tractor Plant (MZKT), Minsk Bearing Plant, Minsk Automobile Plant (MAZ), manufacturing both Euro-3 /4-complying trucks and Euro-5-complying prototypes. BelAZ is among seven leading world manufacturers of quarry trucks and accounts for over 30% of the world market of quarry dump trucks. Minsk Tractor Works is among eight largest tractor manufacturers in the world and exports its products to over 60 countries. The Republic of Belarus is a major producer of potash fertilizers the world over. Belaruskalyi has 14% of the world output and approximately 16% of the world export of potash fertilizers.

13

REGIONS

Stable economic growth is increasingly encour- aged by fast development of regions.

Many large enterprises are located in regions. Belarusian Automobile Plant (BelAZ) is located in Zhodino, oil refinery plants in Mozyr, Novopolotsk, Belarusian Steel Works in Zhlobin.

A host of investment opportunities are offered by the free economic zones:

“Brest”, “Vitebsk”, “Gomel-Raton”, “Grodnoinvest”, “Minsk” and “Mogilev”.

Approximately 270 companies are registered and operate there.

A uniform special legal regime (taxation and customs) is established for all

residents and subject to no change for 7 years from the registration date. The FEZs provide the following advantages for investors:

The FEZ administrations now have more powers to register residents plan- ning to realize projects with investment value exceeding Euro 1 mln. The income tax is set at 50% of the rate established for other territories. Income tax exemption if companies sell products and services they pro- duced within 5 years. VAT halved where Belarus-produced import-substituting goods and services are sold in Belarus. Taxable income base reduced for inward investments in the Republic of Belarus. FEZ residents are exempted from the following taxes levied on:

• Fixed Assets Property (unfinished construction objects), located on the territory of FEZ and vehicles irrespective of their use;

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territory of FEZ and vehicles irrespective of their use; 14 • Purchase of vehicles irrespective of

• Purchase of vehicles irrespective of the purpose.

Other preferences existing across the FEZs include:

• Exemption from import customs duties and VAT for the goods imported for own production provided that the finished products shall be exported;

• Same taxes and duties paid by residents for 7 years starting

from 1 April 2008;

• Preferential terms of rental payment for land plots provided for projects.

Small towns (with population less than 50 thousand) and rural areas have also become an attractive spot for inward investments. In terms of invest- ment conditions and preferences, they virtually do not differ from free eco- nomic zones. For example, a starting selling price for the unused state property to a po- tential investor in rural areas or in urban villages is one base unit (USD 12.3 as of 01/09/2009). The unused state property may even be assigned for gratuitous use or ownership. The procedures and conditions in the building industry have become simpler, which allows to shorten the period of construction. All builders have the right to attract state resources when constructing property for people in need of better living conditions.

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AGRICULTURAL

COMPLEX

The agricultural complex has substantial potential and fully ensures food security of the country.

Both large commodity complexes and smaller farms function in the agricultural sector. The National Program for the Rural Revival and Development for 2005-2010 provides enough support for the agricul- tural sector and reconstruction and technical retooling of agricultural pro- cessing companies. Milk, pork and beef, chicken meat and eggs, grain, potato, flax, sugar beet, vegetables and fruits are successfully produced on an industrial scale in Belarus. Belarus is among seven top potato producers in the world and ranks No. 1 for its output per capita and No. 4 in Europe for milk output per capita. Belarus produces more milk and meat per capita than any other CIS country. Belarus keeps up with domestic demand in milk and meat and also exports them in high volumes. Belarusian milk accounted for 75-80 % of the total Russian imports of the same produce in 2009.

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of the total Russian imports of the same produce in 2009. 16 At the same time

At the same time large complexes and small plants in the regions are being modernized. The technologies, methods of production, sanitary standards, variety of products and package, design are well adjusted towards European and world standards and traditions. The renowned brands in the industry are Savushkin product (Brest), Ba- bushkina krinka (Mogilev). Verhnedvinsky Maslosyrzavod became the first plant in Belarus awarded a compliance certificate to EU quality and product safety requirements in 2009. One of the most promising areas for investments into the agricultural sec- tor is the creation of logistics centers. It is planned to build an “A” class center with over 20 thousand sq. m. of the total area of warehouse facilities on the territory of Zhdanovichi agricultural complex near Minsk. Unload- ing and acceptance of deliveries shall be performed there, products shall be properly stored, processed, registered, monitored, shipped and delivered to the customer.

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TRANSPORT

Belarus has a wide network of motor roads, railways and airways.

Highways running through the country are an important element of the European transport system. Major oil and gas pipelines run from Russia to Western Europe through Belarus, key customs posts, warehouses and terminals are located on the territory. Main international transport corridors span 1520 km:

N2 – Berlin – Warsaw – Minsk – Moscow N9 – Russia – Finland border – Vyborg – St. Petersburg – Vitebsk – Gomel and further through Ukraine, Moldova, Bulgaria to Greece. The motor roads network encompasses over 86 thousand km. Its density is 413 km per 1000 sq. km. of the total area. Belarusian sections of the transport corridors based on their average annual daily traffic volume are loaded only for 25-40% of their real capacity. Broader economic connections with the neighboring countries, growing transit and logistic services, better road service will lead to more efficient road use. This is a good area for investments. Approximately 85% of all freight in the country is ensured by railway. Railway spans 5.5 thousand km. Major transshipment facilities are located at Brest railway junction sending deliveries to over 70 countries.

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railway junction sending deliveries to over 70 countries. 18 Most terminals perform freight delivery, using the

Most terminals perform freight delivery, using the railway-owned road vehicles, under the scheme “railway station – customer’s warehouse” or the other way around. The largest terminals provide a full range of customer services, including railway deliveries, road supplies and cus- toms clearance. International air routes extending for 5000 km run through the air space of Belarus – from Western Europe to the East and South-East Asia, from Scandinavia to the South and Mediterranean. Belarusian Belavia, Transaviaexport, Gomelavia provide regular air service to the CIS countries and others. Belavia ensures approximately 90% of all passenger traffic. Among its partners are such companies as Aeroflot (Russia), Lufthansa (Germany), LOT (Poland), Austrian Airlines – over 30 companies in total. The largest airports are located in the capital: Minsk-1 and Minsk-2. The total length of gas pipelines is over 6900 km and of oil pipelines – 3000 km. Approximately 80% of transit freight going through Belarus are either bound for Russia or back from Russia towards elsewhere.

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LOGISTICS

A new industry has started to develop fast in Belarus - it’s logistics. The reasons are transit location of the country and its integration through fast growing economy with the CIS and EU countries.

A growing interest in the building of transport and logistics centers in the country was just a prediction of the experts a few years back. But today several projects are put to work. By 2012 it is planned to start operation of a Grodno-based transport and logistics centre. The project is being implemented by foreign company West- namus-Logistic in the “Grodnoinvest” FEZ, under the National Program for the development of transport and logistics network. The Grodno center will provide storage, customs clearance, batching and forwarding, using motor and railway transport. It’s also planned to reload freights from narrow-gauge (European) railway to full-gauge rail- way and the other way round when transporting goods from Europe to Russia, Kazakhstan and back. It is also planned to carry out a similar project in Brest with participation of OKD Doprava, a.s.(Czech Republic). Italian businessmen discussed the creation of a transport and logistics cen- ter in Vitebsk with the senior executives of the Vitebsk airport. For the first time in Belarus, it is also planned to create a trade and logistics

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it is also planned to create a trade and logistics 20 center for the sale of

center for the sale of potatoes and vegetables in Kopyl district or in Stolbtsy with 20 tons terminal capacity. The creation of Customs Union between Belarus, Russia and Kazakhstan announced in November 2009 shall give massive impetus to the building of logistics centers. Partner Logistics of Russia created a joint venture in Belarus to provide services to Russian and Belarusian companies. Bringing all types of controls to the outer borders of the Customs Union i.e. to the Belarusian border with the European Union makes it economically reasonable to set up large logis- tics centers. Even today over 400 customs representatives operate in Be- larus, while in Russia only 200. Chairman of the Eastern Committee of German Economy Klaus Mangold highlighted opportunities for this industry at the 22 nd Minsk Forum held in November 2009: Belarus is a country with huge prospects. He emphasized high logistical importance of the country with an industrial base in nu- merous sectors that is better than in other countries of Central and Eastern Europe.

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TIMBER INDUSTRY

The timber complex of the country includes forestry branches and manufacturing facilities, timber processing and pulp-and-paper industries.

Available natural resources dictate the high potential of this complex. Forests occupy approximately 38% of the territory of Belarus (over 9.3 mln hectares). The total timber capacity of the country is 1.4 bn cubic m., with its per capita ratio in excess of the world average by 2.2 times. The percentage of valuable wood species (pine, birch and spruce) is circa 85% of the total. The production volume of merchantable wood is approximately 15 mil- lion cubic meters per year. It completely satisfies needs of the local timber processing plants and allows sufficient exports. Over 2.8 thousand timber processing enterprises produce a wide range of products: furniture, plywood, wood boards, parquet, millwork, paper, paper and cardboard packaging, wallpaper. The industry is dominated by the enterprises of Bellesbumprom concern in terms of production volumes. 23 enterprises specialize in furniture manufacturing. Among them, there are large and well-equipped companies, whose brands are widely known

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well-equipped companies, whose brands are widely known 22 in Belarus and abroad: Molodechnomebel, holding company

in Belarus and abroad: Molodechnomebel, holding company Pinskdrev, Bobruiskmebel, Minskproektmebel, Slonimmebel. Belorusskie oboi and Gomeloboi Joint-Stock Companies produce wallpapers. Svetlogorsk Pulp-and-Cardboard Plant is the largest manufacturer of card- board and related packaging. The Program for the Creation of New Manufacturing Facilities and Mo- dernization of the Current Facilities will introduce new capacities at Ivatsevichdrev, Mostovdrev, FanDok with volume 410,000 cubic meters per year of particle boards. Retchitsadrev production facility will be modernised. Technical retooling of Spartak Paper Factory will allow the production of high-quality paper for sanitary and hygienic purposes and related goods. Once the country’s oldest Dobrush Paper Factory is modernized, the output is expected to grow by 40% and boost the exports to 80% of the surplus. Approximately 40% of furniture manufactured in 2009 was exported, rough- ly 50% of the figure to Russia and 15% to the EU countries.

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BANkING AND FINANCE

The bank system of the Republic of Belarus has shown its stability and attracts investors even during the crisis time.

The monetary system operates according to the Bank Code of the Repub- lic of Belarus. The national currency which is Belarusian ruble has been in existence from 1992 and in 1994 it was proclaimed the unique legal means of payment. The State guarantees full safety of individuals’ deposits in the Belarus-based banks. The two–tier bank system includes the National Bank, other banks and nonbanking financial institutions. During the Belarusian Investment and Economic Forum held on 12-13 November 2009 it was noted that the financial market showed no slow down but rather a robust growth amid the crisis. The financial system turned out to be rather marketable and competitive. 31 banks operate in the country. This number includes 25 banks with for- eign capital, 8 of them have 100% foreign capital and 12 – more than 50 % foreign capital. 8 foreign bank branches were set up, coming from Russia, Germany, Lat- via, Lithuania, and also an Inter-Governmental Bank. Foreign loans amount to USD 3 billion in the bank resources. During the period of January – October 2009, the national bank system posted a 20 % profit increase compared to the same period of the last year. The bad assets constitute about 3.5 %.

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of the last year. The bad assets constitute about 3.5 %. 24 The “crisis year” turned

The “crisis year” turned out to be successful even for the new players of the financial market.

Following the first year of operation, Alfa-Bank sits at No. 1 among other Belarusian banks for its credit portfolio growth and No. 3 for its capital growth. The economic program currently implemented based on the stand-by credit agreement was positively assessed by the IMF.

A major state-run bank Belarusbank occupies the 17 th place among the

leading banks of Central and Eastern Europe and 600 th place among 1000

major world banks according to The Banker. During the first half of 2010

it is planned to invite a consultant from one of the leading world companies

in order to make arrangements for the sale of the Belarusbank minority shares. The privatization of Belarusian banks run by the Government including the control stake sale of BPS-Bank and Belinvestbank, and also minority share sale of Belarusbank and Belagroprombank, which is planned for the nearest feature, will permit to increase efficiency and ensure stable performance not only of those banks but also of other banks in Belarus.

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INFORMATION

TECHNOLOGIES

The considerable IT potential accumulated in Belarus was most successfully put to practice in recent years.

Belarus has been facing a challenging task of becoming an active player in the world-wide IT market in the shortest terms possible. It has been achieved due to the large number of well-qualified human resources, devel- oped IT infrastructure, low-cost technologies, high level of IT services, and accessibility of the Internet. About 15000 specialists have been employed in the IT export segment. Belarusian companies such as EPAM Systems, IBA, SaM Solutions, BEL- SOFT-BORLAS GROUP, ScienceSoft, and others are involved in the projects for British Telecom, T-Mobile, Cingular/AT&T, BlueCross BlueShield, Reuters, London Stock Exchange, AeroMexico, William Hill, SAP, Microsoft, Hyperion, BEA Systems, Colgate, Samsung, IBM, Siemens, Alcatel, and other interna- tional clients. Belarus has succeeded in creating the High Technologies Park. Its activities have been focusing on ICT and software development and implementation in Belarusian industries and other areas, as well as exporting such products. The Park is also planning more engagement in 12 high-technology spheres, from micro- and nanoelectronic materials to air- and spacecraft. The Park has 78 registered resident companies, which employ over 6000 specialists.

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resident companies, which employ over 6000 specialists. 26 The resident companies of the Park have for

The resident companies of the Park have for three consecutive years been on the list of the largest software developers and providers Software 500 published by the influential international IT source Software Magazine. The Park resident companies EPAM Systems and SaM Solutions occupied the 180 th and the 357 th positions respectively in the rating. This list also featured the Belarusian company IBA Group (254 th rating), two subsidiaries of which – ITPark and IBA-Gomel-Park – are residents of the Park. In order to boost IT development and attract investments, the High Tech- nologies Park resident companies are granted a number of incentives. They are exempt from:

• the income tax;

• the value added tax;

• the property tax

• the land tax for the period of facilities construction, not exceeding three years;

• customs fees and the value added tax while importing goods necessary for registered operations;

• other mandatory payments to the Republican budget.

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TELE-

COMMUNICATIONS

Belarus has been the leader among the other CIS countries in the mobile phone network and Internet access.

In November 2009 Minsk hosted the summit “Let Us Make the CIS Area Connected”. It focused on the development of modern communications and attracted the attention of representatives of the UN, the World Bank, the Eu- ropean Bank for Reconstruction and Development, and the top management of international IT companies, including Microsoft Corporation. The summit was visited by Secretary General of the International Telecommunications Union Hamadoun Touré, as well as presidents of Belarus, Kazakhstan, Kyr- gyzstan, and Tajikistan. President of Belarus briefed the guests on the IT policy: “The whole coun- try is covered by the optic fiber network. Broadband Internet is being devel- oped. Modern data processing centers have been established in the capital, as well as in regional centers”, he said. Particular attention has been paid to ensuring immediate access to IT services in regional towns and villages. The National Program for the Rural Revival and Development has been adopted and is developing the telecom- munications subsector in the framework of the action-oriented program “Electronic Belarus”. This sector of Belarusian economy has examples of successful foreign invest- ments to offer. April the 16 th , 1999 became the landmark of the country’s telecommunica-

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became the landmark of the country’s telecommunica- 28 tions development. This was when Velcom started offering

tions development. This was when Velcom started offering the GSM-format communication services. Since that time this company has invested $ 600 mln in the country’s economy, and it is the country’s 13 th biggest taxpayer. In 2008 the company showed the biggest increase in the number of users - by 600000, or by 20.9 per cent. Hannes Armstreiter, the CEO of Velcom’s shareholder Telekom Austria Group, shares his impression of the coopera- tion: “It is apparent now that the decision to expand in Belarus was cor- rect, and yielded long-term aims. There aren’t that many markets in Europe showing such dynamics of development like we see here. Each country has its own rules of business, and here I’d like to point out stability. This is a big advantage, especially in this turbulent period. We’ll continue investing in technology development, implement latest developments, and earn new users”. The whole territory of the country is covered by mobile communica- tion services provided by four operators – Velcom, MTS, Life, and BelCel. The total number of mobile telecommunications users has exceeded the number of the country’s population. The landline communication is provided by the republican unitary enterprise Beltelecom, which offers services not only in the cities and towns, but also in 98 per cent of the countryside.

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SCIENCE

The country has a wide range of scientific and technical developments in various spheres of theoretical and practical sciences.

There are 340 scientific-research, industrial, experimental, technological and other organizations operating in the country. The biggest scientific and industrial organization is the National Academy of Sciences of Belarus. The total volume of its output in 2008 was USD 375 million. The capital investments were estimated at USD 85 million. There are 508 Doctors of Science and 1872 Candidates of Science among more than 6000 researchers. There are more than 16 thousand research works of Belarusian researchers published in the most prestigious data base “Web of Science” from 1995 to 2008. Their works are being used by foreign scientists more that ten times a day. There are twenty-one brand-new projects implemented in cooperation with France. Germany was involved into twenty one new projects, while Poland – in 18 and Great Britain – in 5 absolutely new projects. The most interesting projects are as follows:

• Project to build a plant for production of light-emitting diodes (jointly with Philips)

• New hydrogen generator for heating elements (together with the French company Air Liquide);

• Detonation pulse engines to spacecraft (General Electric);

• Project to fight chemical threats (together with NATO);

• Project to develop unique space mission equipment.

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• Project to develop unique space mission equipment. 30 Belarus is one of the few countries

Belarus is one of the few countries which possess nanoelectronic materials. The National Academy of Sciences has partners in 70 countries, the world over. Belarusian scientists cooperate with the UN (UNIDO), World Bank, IAEA, UNDP, and United Nations Children’s Fund (UNICEF). In the framework of the Central European Initiative at the National Academy of Sciences a centre for studying laser physics and non-linear optics was set up. Under the 7 th Framework Program our country established a robust relationship with the European Commission. More than 31 thousand employees of scientific organizations are involved in research and development. There are 19 thousand researchers, 744 Doctors of Science and 3.1 thousand Candidates of Science. Under the National Program for Innovative Development of the Republic of Belarus 2007- 2010 it is planned to create 187 new enterprises and manufacturing facilities on the basis of operating organizations. New technologies will be put in operation at 436 existing companies. Together with direct funding of science there are targeted credit, finance, tax, investment, customs and antitrust policies being now imple- mented. Special funds are established. Research and Development spend- ings are expected to grow 2.5-3 times in the next five years.

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Information sources:

1. Правовые основы деятельности иностранных инвесторов / Ministry of Economy of the Rep. of Belarus. – Minsk, 2009. – 136 p.

2. Путеводитель для иностранного инвестора в Республике Беларусь / Ministry of Economy of the Rep. of Belarus. – Minsk, 2009. – 70 p.

3. Экономико-инвестиционный обзор. Республика Беларусь – 2009 / Ministry of Foreign Affairs Rep. Belarus, Ministry of Economy of the Rep.

of Belarus. – Minsk : Unipack», 2009. – 32 p.

4. Private enterprise in Belarus / United nations development programme. – Minsk : Unipack, 2009. – 24 p.

5. Investments in Belarus are safe and profitable / The National Academy of Sciences of Belarus, 2009. – 20 p.

For further information please contact:

Ministry of Foreign Affairs of the Republic of Belarus (www.mfa.gov.by) Ministry of Economy of the Republic of Belarus (http://w3.economy.gov.by/ministry/economy/nsf) National Committee of Statistics of the Republic of Belarus (http://www.belstat.gov.by) www.sb.by www.belmarket.by