Up to now* 6 free economic zones have been created in Belarus according to Presidential Edicts for a period of 30 – 50 years in order to attract foreign investments, new technologies, to develop import substitution industries and to create new jobs. Activities of legal entities – members of Free economic zones are basically regulated by Law of the Republic of Belarus # 213-З “On Free Economic Zones” dated 7 December 1998, and Presidential Edict # 262 “On the Activity of Free Economic Zones on the territory of the Republic of Belarus” dated 9 June 2005.

Only legal entities incorporated under Belarusian legislation, including those with participation of foreign investors, may become residents of free economic zones. In order to become a resident of a free economic zone a pretender must declare its intention to invest not less then 1 million euro. A resident of free economic zone must be located within the boundaries of a free economic zone, and conclude an agreement on the conditions of activity in the free economic zone with its administration.  

Among the main benefits that apply to residents of FEZ are the following:

·     50% discount on profit tax rate, profit tax rate  in free economic zones can not exceed 12%;

·     profits, generated from sale of goods (performance of works, services) of own production, are exempt from profit tax for a period of five years starting from the date of reporting of profit.

The majority of tax benefits declared in legislation apply only to those residents of FEZ that sell goods (work, services) of own production and produced on a territory of free economic zones to non-residents of Belarus or to other residents of free economic zone, and those residents that sell import-substituting goods to residents of Belarus. A list of import-substituting goods is approved by the Council of Ministers of Belarus.

*as at 1 October 2009

The preferences do not apply to the following activities:

-          catering, gambling, interactive electronic games, trading and procurement activities, operations with securities;

-          sale of goods (works, services) by a resident but with a usage of assets and employees outside the territory of FEZ;

-          activities of banks, non-banking financial and insurance organizations.

The following activities are prohibited for residents of FEZ on its territory:

-          production, processing, storage, sale of weapons, ammunition, explosives, explosive devices;

-          production, processing, storage, clearance, implementation of radioactive and other hazardous materials;

-          production, processing, storage, sale, destruction of narcotic drugs, psychotropic substances and their precursors;

-          planting, cultivation, processing, storage, sale of cultures containing narcotic drugs, psychotropic or toxic substances;

-          production of alcoholic drinks, except for champagne, grape wines and beer;

-          manufacture of tobacco products;

-          manufacture of securities, banknotes and coins, postage stamps;

-          lotteries;

-          preparation and broadcasting of radio and television, except for maintenance of radio and television;

-          treatment of persons suffering from diseases that constitute a danger to public health;

-          treatment of animals with highly dangerous diseases;

-          activities associated with employment of citizens of the Republic of Belarus abroad.