1. Legal Aspects of Business Activity in Belarus Mikalai Markounik associate “ Vlasova Mikhel & Partners ” Law firm

2. Forms of investment activity Creating a legal entity Acquisition of property or property rights: 1)share in authorized capital; 2)real estate; 3)securities; 4)intellectual property rights; 5)concession; 6)other fixed assets.

3. Guarantees to investors  Seizures (nationalization) only in the public interests with compensation, which  corresponds to the value of the confiscated investment;  payable immediately. Bank interest accrue by the time of payment.  Free movement of capital, including:  exchange of sums of investment in freely convertible currency;  further transfer of such amounts;  possibility of reinvestment.

4. Investment agreement with the Republic of Belarus Investment agreement is concluded to provide state support in the implementation of important to the economy investment projects Terms of the investment agreement: –object, size (without limitation) and date of investment; –rights and responsibilities of the parties; –legal guarantees for the project; –responsibility of the parties; –order and the authority of disputes resolution.

5. Investment agreement with the Republic of Belarus Decree № 10 of August 6, 2009 "On Creation of Additional Conditions for Investment Activity in the Republic of Belarus” 3 levels of decision making on investment agreements have defined: –The Republican state authority, region executive committee (Minsk City Executive Committee) - in case an investment project is implemented within the relevant industry or political subdivision; –Government - in cases where the investment agreement does not provide the investor with individual benefits and preferences; –Government by agreement with the President of the Republic of Belarus - in case of providing the investor with individual privileges and preferences.

6. Investment agreement with the Republic of Belarus Investors who have entered into an investment agreement are exempt from: –payments for the right to conclude a lease of land (the size of such fees is significant and depend on cadastral value of land in accordance with the lease and term of lease); –reimbursement of losses of agricultural and (or) forestry production in the seizure of land, as well as compensation payments related to the transfer and clearing of greenery on the land settlements; –payment of import customs duties and VAT (except for importing from Russian and Kazakhstan) the import of equipment and spare parts for the investment project; –payment of fees in connection with the involvement of foreign labor, with very permissive order to attract foreign workers persists.

7. Investment agreement with the Republic of Belarus Other opportunities for investors It is possible to construct simultaneously with the development, examination and approval of design estimates for each of the stages of construction with the simultaneous design of subsequent phases of the construction Unlike the standard procedure the right to a land is given without holding an auction for the right to lease, with land allotment registration simultaneously with the carrying out construction works. It is prohibited to raise rental payment during implementation of investment project

8. Tax regimes General tax regime main republican taxes, payments (duties): –VAT. The basic rate is 20 %; –excises; –profit tax. The basic rate is 24 %; –profit tax of foreign organizations; –income tax. The basic rate is 12 %; –real estate tax; –land tax; –ecological tax; –customs duties and fees. main local taxes and duties, in particular, tax for services –development areas duty. Rate – no more than 3% of gross profit

9. Tax regimes Special taxation regime Simplified system of taxation (not used in case of implementation of insurance, banking, tourism, real estate and other activities). Rates 8% - for companies that do not pay VAT. Criteria: average number of employees - no more than 100 people, gross profit - up to 2861,25 mln. roubles (equivalent approximately 770 500 Euro); 6% - for companies that do pay VAT; Criteria: average number of employees - no more than 15 people, gross profit - up to 1090 mln. roubles (equivalent approximately 293 500 Euro); 15% - for companies that use gross receipt as a tax base. Rates for companies and individual entrepreneurs with the location in rural settlements (not apply to trading mediatory activity); 5% - for companies that do not pay VAT; 3% - for companies that do pay VAT; Single tax for the producers of agricultural products. Rate is 2%;

10. Tax regimes Free Economic Zone (FEZ) Six SEZ (Minsk, Brest, Vitebsk, Gomel-Raton, Grodnoinvest, Mogilev) Conditions: –investment - at least 1 million euros –export –import substitution –selling to other residents of FEZ FEZ residents pay –income tax – 0 % for 5 years, afterwards - 12 %, –VAT – 10 %. Not apply to: –public catering, gambling, trading and procurement activities, operations with securities; activities of banks and insurance organizations etc.

11. Tax regimes Taxation of commercial organizations with location in settlements with population not over 50 thousand people according to the approved list: have the right within 5 years from the date of their creation not to pay taxes, excluding –VAT, tax on income from securities transactions, –excise, –land tax, –ecology tax, –off-shore charges

12. Tax on dividends (for polish investors) The Agreement between the Republic of Belarus and Poland on avoiding of double taxation stipulates the following amount of tax on dividends: 10% - in case Polish resident has 30% and more of the share of Belarusian company Not more than 15% in other cases* * According to currently effective legislation, the rate is 12%.

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