Experts comment on tax preferences for Great Stone residents
MINSK - The financial rate of return on projects implemented in the China-Belarus Industrial Park Great Stone will be 3-5% higher on average than if those projects were implemented in a regular tax environment, reckons analyst Yelena Minich of Uniter Investment Company.
Speaking at a seminar in Minsk on July 13, the analyst accentuated the point that the highest return (up to 21%) on investments would be possible if Great Stone residents chose to implement energy intensive projects. To compare, an energy effective projected implemented in a regular tax environment in Belarus would yield 8.5%, Minich said.
Speaking of the advantages of the Great Stone Park from the investor’s point of view, the analyst mentioned the possibility of getting a land plot of guaranteed access to utility and telecom networks, flexible terms of payment, active state support, access to the logistics and transport infrastructure.
The Great Stone Park is due to start erecting a second industrial building in August 2017, Vice CEO at Industrial Park Development Company Sergey Vaitekhovsky told reporters in Minsk on Thursday.
In his words, although the first industrial building is not officially commissioned, all premises have already been booked by park residents. They plan to complete the construction of the second industrial building in June 2018. Some investors have chosen to reserve premises in the second building, Vaitekhovsky informed. For instance, one half of the ground floor of the second building (around 1,500 sq metres) have already been reserved by park residents.
The value of land at the Great Stone Park now stands at around $400,000 per ha, or $30-40 per sq metre, Vaitekhovsky informed. The price does not cover the investments in infrastructural development, in order to attract investors, the park administration is selling land plots at a reduced price. Investors willing to become Great Stone residents should consider 1 ha as a minimum size of a land plot, as it has to make room for a parking area and vegetation, said Vaitekhovsky.
Great Stone residents enjoy the same preferences as residents of Belarus’ High-Tech Park: the income tax rate for personnel is reduced to 9% from the standard rate of 13%. Besides, the base for the social security tax is reduced to the average wage. It means that investors implementing projects at the Great Stone Park will be free to reduce transfers to Belarus’ Social Security Fund by approximately 40%, Denis Bogdanov of REVERA real estate company told reporters on Thursday.
The Great Stone Industrial Park is based in Smolevichi Rayon (Minsk Region), where a special economic area will be established on an area of 8,048 ha subject to special legal regulations for a period of 50 years. The industrial park will host business projects in electronics, biomedicine, fine chemistry and mechanical engineering, which resident companies enjoying lucrative tax preferences.
The total value of the project is estimated at $30 billion. The parties have agreed that Belarus will hold a 40% stake in the authorized capital of the Belarusian-Chinese company that will develop the project.
SZAO Industrial Park Development Company was established on Aug 27, 2012 by Sinomach (32%), Minsk Region Administration (30.86%), China Merchants Group (20%), CAMCE (13.71%), Harbin Investment Group (2.29%), Minsk City Administration (0.57%), Belarus’ Horizont Group (0.57%). The Great Stone Park is currently developing its infrastructure.
At the initial stage, 10,000 jobs will be created. After the part starts operating at full capacity, the number of jobs will increase to 132,000. So far 13 companies have been registered as residents at the Great Stone Park.