Deloitte was the first of the Big Four international accounting and consulting firms to establish operations in Belarus, opening an office in 1999. Here, Andrei Surmach, Partner & General Director of Deloitte Belarus explains how the ease of doing business has improved over the past decade.
Ten years ago Belarus was on the margins of the global economy, but since then substantial improvements to the investment climate have made the country a serious emerging market.
The country has won the trust of the international business community and improved economic relations with many countries as a result, including the European Union.
International rating agencies now issue ratings for the country and its bigger banks, while over 20 new double taxation treaties and many investment protection agreements have been signed with countries around the globe.
Belarus’s attractions have also been underwritten by the fact many multinationals have acquired local subsidiaries or started operations from scratch in the country.
All this activity has been helped enormously by a radical overhaul of the tax system.
Many tax rates have fallen (including income tax, VAT, social security contributions, turnover taxes, capital gains tax) and currency, price and salary controls have been eased.
Some taxes have been phased out altogether while others have been made far simpler to administer, and recently the ability to file tax returns electronically was introduced.
Importantly for foreign companies seeking to establish operations in Belarus, several special tax regimes (Free Economic Zones, High Technologies Park, exemptions for rural areas) have been created to provide substantial tax privileges for business entering the market.
A “one stop shop” principle has been introduced for setting up a company - making it possible to do it in a day – and opening a bank account is a simple process. Many price controls have also been eased and foreign exchange restrictions removed.
From an accounting point of view, there is much wider adoption of International Financial Reporting Standards (IFRS) with all commercial banks in Belarus now required to report under IFRS. Belarusian accounting rules are currently being reformed to become closer to IFRS, too. All these changes have been part of a general trend towards liberalisation of economy.
The Foreign Investment Advisory Council established by the Government and consisting of foreign investors, international economic and business bodies and various state agencies often helps to change legislation to improve the business and investment environment, ranging from aspects of taxation to customs and foreign trade issues.
In short, over the past decade Belarus has made impressive progress and it is seeing the results of its efforts.
As always, there is still a lot to be done, but the political will exists to keep moving forward. Belarus has become an important destination for international capital.