Changes in regulation of investment activity

The Law of the Republic of Belarus (the RB) No. 53-Z dd. 12.07.2013 "On Investments" (hereinafter - the "Law") has been amended on a large scale.

The law establishes new forms of investment project implementation - preferential investment project (PIP) and special investment agreement (SIA), as well as additional benefits and preferences for investors.

The new wording of the Law will come into force from 27 July 2024.

Preferential investment project

PIP provides for the possibility of implementing an investment project without concluding an investment agreement, but with the application of benefits and guarantees provided for by the Law.

An investment project obtains preferential status if it corresponds to the list of priority activities (sectors of economy) for investment. The list is established by a decision of the regional executive committee. In the absence of a regional list, such a project is evaluated according to the list established by the Council of Ministers of the Republic of Belarus (hereinafter - the "List").

The preferential status of an investment project is confirmed by a decision taken in respect of the applicant's legal entity (individual entrepreneur) to be included in the List.

Special investment agreement

The conclusion of the SIA implies the implementation of an investment project:

• without complying with the requirement on minimum investment volumes established by priority activities (sectors of the economy);
• with the possibility of subsequent sale of manufactured products within the framework of public procurement using a single-source procurement procedure on contractually agreed terms and conditions.

Terms and conditions of CIA:

• Compliance of the investment project with the priority activities (sectors of the economy) for investment, established by the Council of Ministers of the Republic of Belarus
• Financial and economic assessment of the compliance of the investment project with the criteria established by the Council of Ministers of the Republic of Belarus.

The SIA is concluded based on the results of the tender. The only exception is when a single bid participates in the tender.

Benefits and preferences in the implementation of investment projects

Benefits when implementing investment projects under PIP and SIA include:

• VAT deduction in the full amount of sums charged when goods (work, services) and property rights are acquired (imported) in Belarus for the construction and equipping of investment projects;
• exemption from paying state fees for issuing special permits for the right to carry out labour activities in the Republic of Belarus and for issuing temporary residence permits for foreign citizens and stateless persons involved in the implementation of an investment project;
• exemption from land tax and rent in respect of land plots provided for the construction of investment projects;
• exemption from profit tax in connection with the gratuitous receipt of fixed assets transferred for the purpose of implementing an investment project;
• exemption from import customs duties on technological equipment, components and spare parts imported for use in the implementation of the investment project;
• the right to select a contractor or developer of project documentation, suppliers of goods (services) for the construction of investment facilities without carrying out the established procurement procedures at their own expense (except for government procurement);
• the right to allocate work stages in the construction project with the execution of works on construction of the investment object at the current stage simultaneously with the execution of project works for subsequent stages (if there is an architectural project).

In addition to the established benefits for investment projects implemented under investment agreements, including SIAs, a guarantee against unfavourable changes in the tax legislation is provided, namely, the following options are provided:

• exemption during the investment project implementation period from new taxes (levies) established by the tax legislation;
• payment of taxes (levies), the rates for which are increased, at the rates effective on the date of entry into force of the investment agreement.