In the context of rapid scientific and technological progress and the aggravation of interstate and interregional competition, it is very important to prevent the Republic of Belarus and its regions from lagging behind in the field of advanced technologies, introducing the achievements of science and technology into production, strengthening competitiveness, and improving living standards. Among the wide range of measures that contribute to solving this problem, a special role is assigned to special territorial structures, which have received the generic name “free economic zone” (FEZ). FEZ is a limited territory (city or part of it, seaport, airport, etc.), on which there are special, preferential economic conditions for domestic and foreign entrepreneurs that contribute to the solution of general economic, socio-economic, scientific and technical, scientific and technological, foreign economic and other tasks in the region and the country as a whole.
The creation of a FEZ in a particular region of the country, on the one hand, allows you to solve the problems of a particular region (accelerating the pace of socio-economic development, reducing unemployment, etc.), and on the other hand, it provides a solution to national problems (attracting foreign investment, advanced technologies, etc.) to the country. In general, the tasks solved by the FEZ are grouped into the following blocks.
1. Tasks of the economic block: attraction of foreign and domestic capital through the operation of a special preferential economic mechanism, a stable legislative framework, simplification of various organizational procedures; taking advantage of the international division of labor and capital circulation to expand exports of manufactured goods, rationalize imports and create an import-substituting mechanism in the production of goods; real elimination of the monopoly of foreign trade through the provision of all organizations and enterprises of the FEZ with equal access to various forms of foreign economic activity; growth of foreign exchange earnings to the budget of the country and regions.
2. Tasks of the social block: acceleration of development of specific regions; creation of new jobs and increased employment of the population; improving the skills of the workforce through the study and implementation of world experience in the field of organization, management, finance; education of a management culture focused on the world requirements for management technology; satisfaction of the population with high-quality goods.
3. Tasks of the scientific and technical block: attraction of advanced technologies; acceleration of innovation processes; attraction of foreign scientists and specialists; improving the efficiency of using the capacities and infrastructure of conversion complexes.
Free economic zones, according to world experience, are divided into the following types:
free trade zones characterized by simplified border crossing rules for goods, low customs duties and other benefits aimed at promoting trade, accelerating trade turnover, and reducing trade costs. A type of free trade zones are free customs zones associated with the exemption or reduction of customs duties for their residents, as well as transit zones, free ports, transit and forwarding zones, etc .; industrial and production zones, which are the result of the evolution of free trade zones, when they began to import not only goods, but also capital, which made it possible to engage in production activities along with trade and trade services; technical and innovative zones operating in the form of innovation centers, technoparks, technopolises, etc. Their goal is to create favorable conditions for scientific and practical activities in the regions and the country as a whole; service zones, which are territorial entities with a preferential regime of entrepreneurial activity for firms providing various services to business entities engaged in financial, insurance, consulting and other business services. Service zones include offshore zones created in order to attract foreign capital to the country, and tourist zones designed to increase the influx of tourists to the region; complex free economic zones, combining the features of the above zones. For example, if there are signs in the region characteristic of a free trade zone and an industrial and production zone, we can talk about a commercial and industrial zone. The zones of complex type include: scientific-industrial and special economic zones; special regime territory; free enterprise zone, etc.
Although the first free economic zones appeared in Western Europe, they are now very widespread throughout the planet. Today, there are about 4,000 different types of free economic zones in the world, which indicates the huge popularity of such economic entities in the world. At the same time, the creation of free economic zones is considered by many countries as a means to attract foreign and national capital to the investment sphere, expand the export of products (works, services), ensure the growth of foreign exchange earnings, gain access to new technologies, increase employment, get new opportunities for training and retraining of personnel, introduce advanced world experience in the field of organization and management, saturate the domestic market with high-quality Goods.
In almost all countries of the world, including Belarus, free economic zones are used as a very effective and efficient instrument of regional policy. Thus, in our country, as strategic goals and objectives set for the existing free economic zones, a certain place is given to attracting domestic and foreign investment for the development of industries based on new and high technologies, expanding exports and creating favorable conditions for the economic growth of the regions. Free economic zones are also considered as an element of the scientific, innovative and investment policy of the republic, since new mechanisms for managing the economy, the possibility of attracting investments in the development of priority industries and industries that determine the innovative, resource-saving, socially-oriented nature of the economy can be tested in them.
Currently, there are 6 free economic zones in the Republic of Belarus, including: FEZ “Brest”, FEZ “Gomel-Raton”, FEZ “Minsk”, FEZ “Vitebsk”, FEZ “Mogilev” and FEZ “Grodnoinvest”. In addition, a project on the organization of a free economic zone of the tourist and recreational type of the FEZ “Nesvizh Minsk” is under development.
As of January 1, 2004, 284 resident enterprises were registered in the functioning free economic zones of the republic, most of which are operating, and more than 70% of them are enterprises with foreign capital. Industry employs 80-85% of all operating FEZ enterprises, of which 90% or more are in mechanical engineering and metalworking, chemical and petrochemical, forestry, woodworking, pulp and paper, light and food industries, where the largest percentage of enterprises with joint and foreign capital is observed. In the agricultural sector, less than 1.0% of enterprises registered in the FEZ of Belarus operate. The share of resident enterprises providing transport and construction services is slightly higher. Also, investors paid attention to such areas of activity as science and scientific services, finance, credit, insurance and pension services.
The free economic zone “Minsk” was created for a period of 30 years in order to attract foreign and domestic investments, technologies, management for the creation and development of modern industries on the territory of the FEZ, ensuring favorable conditions for the economic development of the Minsk region. The territory of the FEZ “Minsk” with a total area of about 1400 hectares includes some industrial areas of the city of Minsk and the territories adjacent to the National Airport “Minsk”. This FEZ has the status of a production, export and free customs zone.
On the territory of the FEZ “Minsk” there is a special tax and customs regime:
income tax rate for residents of FEZ “Minsk” – 15% (in the republic – 24%), value added tax rate – 10% (in the republic – 18%); profit received by residents of FEZ “Minsk” through the sale of services and products of their own production is exempt from taxation for a period of 5 years from the date of its announcement; On the initiative of the residents of the FEZ “Minsk”, a free customs zone (FTZ) regime is established in their production territories and facilities, while customs duties are not levied on the import of foreign and domestic goods into the territory of the STZ and when exporting products of their own production from the territory of the STZ and economic policy measures are not applied.
The free economic zone “Brest” is the first in the Republic of Belarus, since it has been officially operating since December 1996, the FEZ “Brest” was created for a period of 50 years. Its territory consists of two sections located to the north-west and east of Brest. It covers an area of more than 70 km2, on which the international airport is located. A gas pipeline passes through the territory of the zone, through which gas is supplied abroad. FEZ “Brest” is a complex zone connecting the functions of export, production, free customs, tourist-recreational, insurance and banking zones.
FEZ “Brest” is located at the crossroads of major highways leading from west to east and from north to south, of which the E-30 transit corridor Berlin-Warsaw-Brest-Minsk-Moscow, a direct route to Vilnius and Kiev, as well as an extensive network of high-quality roads in the region are of particular importance, which allows you to quickly deliver people and goods to industrial zones and back.
FEZ “Brest” actively attracts investments for the creation, first of all, of enterprises of the pharmaceutical, automotive, food, electronic, furniture, machine-building and woodworking industries. At the same time, priority is given to investments in the organization of export and import-substituting production. Also in the zone there is a wide network of customs warehouses and the expansion of the existing transport infrastructure.
The benefits and privileges enjoyed by residents of the FEZ “Brest” are very diverse. In particular:
when importing foreign and domestic goods into the territory of the FEZ “Brest”, customs duties are not levied and economic policy measures are not applied; products (works, services) of own production of residents of the zone, exported outside its borders, are exempt from payment of customs duties; foreign employees are guaranteed an unimpeded transfer abroad of income received on the territory of the FEZ “Brest”; for goods (works, services) produced on the territory of the FEZ “Brest”, quotas are not established and licensing is not introduced when they are exported outside the republic; on the territory of the FEZ “Brest” such coercive measures as nationalization, requisition, confiscation or similar measures are not allowed in respect of investments; on the territory of the FEZ there is a preferential taxation procedure, providing for income and income tax – 15%, value added tax – 10%. residents of FEZ “Brest”, whose profit is formed through the sale of services and products of their own production, are exempt from paying income taxes for the first 5 years from the date of their declaration of profit. Residents of FEZ “Brest”, supplying at least 70% of their products for export, in the next 5 years pay income tax in the amount of 50% of the tax rate; within 5 years from the date of registration, dividends owned by residents of FEZ “Brest” are not subject to taxation; The minimum wage is set at the level of at least 120 per cent of the corresponding wage on average in the Republic of Belarus.
The free economic zone “Gomel-Raton”, being formed on the basis of a large machine-building research and production association “Raton” for a period of 50 years, is located in the northern part of a large regional center of Belarus, Gomel, on an area of 4300 hectares.
advantageous position of Gomel at the intersection of the main railway and road routes St. Petersburg-Odessa and Bryansk-Warsaw. In addition, the international airport “Gomel” is directly adjacent to the territory of the FEZ; availability of developed infrastructure; availability of land in the FEZ suitable for the new construction of production shops, offices, service centers, etc .; availability of free production space at existing enterprises that have all the necessary communications; FEZ buildings and land plots can be leased and sold for projects; the availability of a highly qualified workforce previously involved in the defense industry.
Flexible tax regulation and a simplified procedure for customs clearance of goods allow a resident of the FEZ “Gomel-Raton” to reduce the amount of payments to 40% of the amount of taxes paid in the Republic of Belarus. After payment of taxes and fees to foreign investors in respect of their income received from the use of their investments, it is guaranteed: their use for investment and reinvestment purposes, as well as for the purchase of goods in the territory of the Republic of Belarus; their use for the purchase of another currency in the domestic market of the Republic of Belarus; unimpeded transfer of income in foreign currency to the country of origin of investment or to any other country.
The free economic zone “Vitebsk” was created for a period of 30 years, is located in one of the largest industrial centers of Belarus – Vitebsk with a population of 360 thousand inhabitants, occupying an area of over 900 hectares. it has a very favorable geographical position, being in a slight distance from the largest industrial centers of the Baltic Countries (Vilnius, Daugavpils, Riga) and Russia (St. Petersburg, Moscow). Such a location makes the FEZ “Vitebsk” quite an attractive place for organizing productions focused on export to the Russian and Baltic markets, and in the future – to the markets of the EU countries.
The industry of FEZ “Vitebsk” is represented mainly by the following industries: mechanical engineering, woodworking, electronics, footwear, clothing, textile industry, as well as food production. Professional personnel for FEZ “Vitebsk” are trained by Vitebsk State University, medical and technological universities, veterinary academy, 5 specialized technical schools (colleges). The gas pipeline route passes through the territory of the zone, there are railway access roads, and the site of the former military airfield is located.
When evaluating investment projects, preference is given to those in which the use of new high technologies is assumed, the export orientation of production or import substitution is envisaged. It is generally recognized that the creation of export-oriented industries in the FEZ “Vitebsk” is the shortest and cheapest way to promote manufactured goods, both to the Russian market and to the markets of other countries, including the CIS member countries.
In FEZ “Vitebsk” there are the following tax benefits and advantages, which allows FEZ resident enterprises to pay an average of 30% less total tax payments than other enterprises in Belarus. These advantages include:
full exemption from customs duties when importing raw materials, materials, equipment into the territory of the FEZ; full exemption from customs duties when exporting products of own production outside the FEZ; full or 50% exemption from VAT for manufactured products; full exemption from income tax for the first 5 years and reduction of this tax by 40% in subsequent years; 5% tax rate on income (dividends) of foreign founders of enterprises that are legal entities; for the period of operation of FEZ “Vitebsk” it is not allowed to increase the list and tax rates; profits directed to investments in Belarus are not subject to taxation.
The free economic zones Grodnoinvest and Mogilev are relatively young, as they were established in 2002 for a period of 30 years as production, export and customs zones. According to the regulations approved by the Government of the Republic of Belarus on the tender for the right to register legal entities as residents of the free economic zones “Grodnoinvest” and “Mogilev”, the main criteria for assessing participation in the competition for the right to register are as follows:
the minimum size of the authorized capital of candidate enterprises is at least 20 thousand USD; the share of export supplies is at least 60% of the total sales volume; the share of the main technological equipment with a service life of less than 5 years is 90% or more of the total equipment park of the enterprise; projects focused on the supply of products to the domestic market are not accepted (with the exception of projects included in the state and regional import substitution programs).
The Ministry of Taxes and Duties of the Republic of Belarus has determined the peculiarities of taxation of residents of FEZ “Mogilev” and “Grodnoinvest”. In particular, the special legal regime of FEZ “Mogilev” and “Grodnoinvest” applies to the production and export of products. The production and sale of import-substituting products (works, services) is also privileged according to a special list approved by the government. Under the special legal regime, FEZ residents pay income tax at a rate reduced by 50% of the rate established by law, half of the income tax rate, VAT, excise taxes, environmental, land and income taxes, state duties, license, registration fees, deductions to social protection funds and employment promotion. In addition, this list includes taxes, fees and other mandatory payments that are introduced by local authorities.
However, the special legal regime does not apply to trade, trade and procurement activities and catering. In the event that a resident of FEZ Grodnoinvest and Mogilev carries out several types of activities, including those that are not subject to a special legal regime, he should ensure separate accounting of revenue and costs.
Unfortunately, the analysis of the results of the activities of the FEZ of the Republic of Belarus reflects their very low share in the total volume of industrial production of the republic (about 2.3%), investments in fixed assets (less than 2%) and exports (about 3%), which indicates the insignificant contribution of these territories with special regimes of tax and customs regulation to the economy of the republic. This conclusion is also confirmed by such basic specific indicators of residents’ activities as output per 1 employee, the volume of investments for the creation of 1 job, capital-labor ratio, etc., which differ little from the current level of similar indicators on average in the republic. In addition, the vast majority of investment projects implemented in the FEZ do not meet the criteria of novelty and knowledge intensity. Despite the preferential regime for the activities of resident business entities, there are only isolated cases of attracting strategic investors to the FEZ who implement large-scale investment projects.
In this regard, since June 2004, the activities of Belarusian free economic zones have been carried out according to new rules that unify the working conditions of FEZs, create a more efficient and attractive environment for investors and foreign partners and largely meet the requirements of international law. At the same time, in the future, state support will be provided exclusively to export-oriented residents of the FEZ, and priority will be given to those manufacturers who produce products that have no analogues both in the republic and in our closest neighbors. In addition, careful customs control has been established, and when working with the FEZ, special attention will be paid to the diversification of Belarusian exports, the development of new markets of foreign countries. The most favorable conditions are proposed to be created for the development of high technologies and innovations. Thus, on the initiative of the President of the Republic of Belarus, in the near future a special zone will be created in the republic for the concentration of the best minds and intellectual potential of the country by analogy with the American “Silicon Valley”.
Among the priority areas of investment activities of the FEZ are: high-tech and import-substituting industries; processing of agricultural products; woodworking industry; production of building materials; light, food, chemical and petrochemical industries; transport; mechanical engineering and metalworking. In total, the development program of Belarusian FEZs includes more than 60 investment projects of FEZ resident enterprises, scheduled for implementation in 2004. Almost half of the free territories of the FEZ “Minsk” and “Gomel-Raton” require infrastructural arrangement, and for the FEZ “Brest” and “Vitebsk” this figure is significantly higher.
Among the strategic directions for the development of the FEZ of the Republic of Belarus are their improvement as a system of locally limited territorial entities with a special legal regime and the possibility of their partial expansion by including sites of individual enterprises in the boundaries of the FEZ, as well as their development as a set of strategic investment programs and projects implemented within the boundaries of the region. At the same time, permanent transformation of the boundaries of zones is possible as specific investment programs and projects are developed and ready to be implemented.