Improvement of preferential regime in the Belarusian-Chinese Industrial Park “Great Stone”

Decree of the President of the Republic of Belarus No. 215 “On Amendments to Decrees of the President of the Republic of Belarus”

On June 11, 2021, the President of the Republic of Belarus signed Decree No. 215 «On Amendments to the Decrees of the President of the Republic of Belarus». The document significantly updates the Decree of the President of the Republic of Belarus No. 166 dated 05/12/2017 «On improving the special legal regime of the Chinese-Belarusian Industrial Park «Great Stone».

The legislative act establishes a number of innovations related to the activities of the industrial park. Among them, the key ones are:

1. Improved complex service on the principle of «one station» in the park. Now 58 administrative procedures, which were previously carried out by local authorities, will be carried out by the park administration. This will reduce the time required to obtain the necessary permits. 

2. Expansion of the main activities of the park, which will make the park more accessible to a wider range of investors. The list includes new areas: the creation and development of industries in the fields of biopharmaceuticals, medical products, medical services, laboratory diagnostics, as well as the use of 5G technologies and artificial intelligence in all areas of the park's activities, the creation of «sub-parks» infrastructure to attract startups, residents and investors, organization of the development of unmanned vehicles in the industrial park.

3. Support for innovation. During the first two years, the subjects of innovation activity, whose projects correspond to the main directions of activities of the park, will enjoy the main resident benefits of the “Great Stone”, which should significantly increase the success of their implementation from an idea to the commercial introduction.

Additional benefits are provided for venture capital organizations established in the park: the exemption from income tax is extended until 2062 when venture capital organizations alienate a share in the authorized capital of innovation entities located both in the park and outside. The possibility of subsidizing venture activities both in the park and outside of it, receipt of profit from which is possible no sooner than 5 years from the beginning of funding, will serve as an incentive for the active creation of such organizations.

4. Implementation of the most common English law institutions. Residents of the park, subjects of innovative activity, receive the opportunity of additional financing through the introduction of special agreements (option, option agreement and convertible loan). Thanks to such agreements, for example, startups without initial capital can receive money from an investor in exchange for the investor's future share in such a startup. Employees of residents of the park, subjects of innovation will be able to purchase shares of their company.

5. Establishment of preferential conditions for large («anchor») residents. These are additional preferences for projects with investments of 50 million and more US dollars: an increase in the grace period (from 5 to 10 years) for the application of a zero tax rate on dividends accrued to its founders (shareholders, participants), as well as the possibility of applying special simplifications in the field of customs administration. The payment for land plots in the park, acquired for private ownership by such residents, will be reduced by an amount equal to 25% of their cadastral value.

6. Attracting large investors will expand the cluster principle of activity. According to separate decisions of the Government, observing the economic interests of the Republic of Belarus and investors, enterprises outside the park will also be able to take advantage of the preferences, provided that they participate in the capital and production process of residents.

7. In order to stimulate the creation of sub-parks, primarily in major Chinese regions, in particular, in the provinces of Sichuan, Shaanxi, Tianjin, the founders of sub-parks will be able to obtain resident status in accordance with the new Decree.

8. Implementation of the advantages of the territorial special economic zone. The conditions for the production activities of residents with minimal customs administration have been improved. Now there is no need for the participation of customs authorities when transferring goods between the territories of the free customs zones of the same resident of the park. The Decree also stipulates that subjects of innovative activity can act as declarants of the customs procedure of the free customs zones on an equal basis with the residents of the park.

9. Additional stimulation of medical activity.
The compulsory registration of drugs and medical devices, as well as obtaining a license for medical activities, are canceled. Medical activities will be carried out on the basis of the decision of the park administration, subject to certain conditions regarding the education of medical personnel, premises, equipment, hygiene requirements, the presence of a special employee in the staff who carries out maintenance and repair of medical devices, etc. Terms for certain administrative procedures in the field of medical activities are reduced and the procedures are simplified. 

10. Further simplification of the regulation of land relations and construction activities. The time frame for state examination of project documentation is reduced, the procedure for approving and obtaining initial permits and technical documentation is simplified, the requirement for the mandatory development of estimate documentation as part of the project is eliminated, preliminary approval and allotment of land plots are excluded when connecting park facilities to the backbone networks, opportunities for mortgage of land plots are expanded.

The document also provides for a number of other innovations and simplifications in all areas of economic activity.

The decree takes into account the proposals of the Ministry of Commerce of the PRC, representatives of Chinese business circles, as well as enterprises-residents of the industrial park.

In the context of global competition for attracting investment, the new legislative act will preserve the optimal legal regime for doing business in the Great Stone in comparison with other economic zones of the EAEU and the EU.

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