Professional Documents
Culture Documents
BELARUS
Opportunities for business
cooperation
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14.12.2009. 6090/8
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. 02330/0150278 03.05.2008
. 02330/0150479 25.02.2009
1500. 7153
ISBN 978-985-6802-37-2
, 2009
. , 2009
REPUBLIC OF
BELARUS
Opportunities for business
cooperation
CONTENTS
MAIN ADVANTAGES.......................................................................................... 4
HISTORY. PEOPLE. STATE................................................................................. 6
INTEGRATION THROUGH ECONOMY.......................................................... 8
BEST CONDITIONS FOR FOREIGN INVESTMENTS.................................1 0
DEVELOPMENT PRIORITIES..........................................................................1 2
REGIONS ............................................................................................................1 4
AGRICULTURAL COMPLEX............................................................................1 6
Transport......................................................................................................18
LOGISTICS...........................................................................................................20
TIMBER INDUSTRY . ........................................................................................22
Banking and Finance..............................................................................24
Information Technologies................................................................26
Telecommunications ............................................................................28
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, NorthSouth. 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.
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 13th in Europe for its territory area (207.6 thousand sq. km.).
Its 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 represented by over 100 nationalities.
The Republic of Belarus is a unitary democratic social and constitutional state. The supreme representative and legislative authority is bicameral
National Assembly. The President is a leader of the State. The supreme executive 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.
INTEGRATION
THROUGH ECONOMY
Belarus is deeply integrated into
international economy.
The negative balance of international sale was first of all caused by prices
increase for imported energy sources and raw materials. To rectify the imbalance, 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 investment climate as an element of economic liberalization. Its 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 &
Poors.
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 investments over GDP growth rate, with a share of capital investments permanently exceeding 25%.
BEST CONDITIONS
FOR FOREIGN
INVESTMENTS
Companies and commercial enterprises with
foreign investments have certain advantages.
Belarus is the right country to embark on ambitious 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, machine 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 Mogilevkhimvolokno, Belarusian Brewery Siabar.
Such companies as Lukoil, Slavneft, Sistema, Itera-Group, Gazprom, Gazprombank, 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
10
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 newest 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 resource- 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 enterprises account for over 60% of all industrial output.
Central to the Belarusian industry are metalwork, chemical and petrochemical sectors, power industry, light and food industry, medical and
12
13
REGIONS
14
Small towns (with population less than 50 thousand) and rural areas have
also become an attractive spot for inward investments. In terms of investment conditions and preferences, they virtually do not differ from free economic zones.
For example, a starting selling price for the unused state property to a potential 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.
15
AGRICULTURAL
COMPLEX
The agricultural complex has substantial
potential and fully ensures food security
of the country.
16
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), Babushkina 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 sector 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. Unloading and acceptance of deliveries shall be performed there, products shall be
properly stored, processed, registered, monitored, shipped and delivered to
the customer.
17
Transport
18
19
LOGISTICS
20
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 logistics centers. Even today over 400 customs representatives operate in Belarus, while in Russia only 200.
Chairman of the Eastern Committee of German Economy Klaus Mangold
highlighted opportunities for this industry at the 22nd 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 numerous sectors that is better than in other countries of Central and Eastern
Europe.
21
TIMBER INDUSTRY
22
23
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 Republic 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 twotier 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 foreign 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, Latvia, 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 %.
24
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 17th place among the
leading banks of Central and Eastern Europe and 600th 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.
25
Information
TechnologIES
The considerable IT potential accumulated
in Belarus was most successfully put to practice
in recent years.
26
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 180th and the 357th positions respectively in the rating.
This list also featured the Belarusian company IBA Group (254th 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 Technologies 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.
27
Telecommunications
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 European 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 Tour, as well as presidents of Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan.
President of Belarus briefed the guests on the IT policy: The whole country is covered by the optic fiber network. Broadband Internet is being developed. 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 telecommunications subsector in the framework of the action-oriented program
Electronic Belarus.
This sector of Belarusian economy has examples of successful foreign investments to offer.
April the 16th, 1999 became the landmark of the countrys telecommunica-
28
tions development. This was when Velcom started offering the GSM-format
communication services. Since that time this company has invested $ 600
mln in the countrys economy, and it is the countrys 13th 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 Velcoms
shareholder Telekom Austria Group, shares his impression of the cooperation: It is apparent now that the decision to expand in Belarus was correct, and yielded long-term aims. There arent that many markets in Europe
showing such dynamics of development like we see here. Each country has
its own rules of business, and here Id like to point out stability. This is a
big advantage, especially in this turbulent period. Well continue investing
in technology development, implement latest developments, and earn new
users.
The whole territory of the country is covered by mobile communication services provided by four operators Velcom, MTS, Life, and BelCel.
The total number of mobile telecommunications users has exceeded the
number of the countrys 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.
29
Science
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Information sources:
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