Belarus President Aleksander Lukashenko signed a decree establishing the free economy Zone in Brest at the end of 1996. In the town, where 60 per cent of all goods and various transport cargoes from western, central and northern Europe entered to the former USSR (Union of Soviet Socialistic Republics) , the Zone should cease to be valid in 2046.

Brest is an important railway junction directed through Minsk to Mos-cow and Bryansk to Ukrainian Kiev and Po-lish Warsaw and Bialy-stok. Routes from Brest are directed directly towards Moscow, Belarus Grodno, Gomel, as well as to the border with Lithuania, the Ukraine and Poland. As well, the European railway dispersal ends in this town and begins eastern European. Railway transfer area is equipped by technology helpful for transfer of pipes and containers with capacity of more than 300 containers a day. There is also international airport in the town.

"Free economy Zone is an example of open attitude of government and president towards entrepreneurs. In addition to enlivening of port's and airport's activities, the Zone watches increase of influx of foreign capital and building of modern infrastructure," says Nikolai Krivecky, Executive Director of the Zone.

German specialists shared on its establishment. The Zone consists of two parts. The first one with area of 5,000 hectares (1 hectare is about 2.47 acres) is situated on the bank of the river Bug, which is a border with Poland and is to be utilised for complex securing of transportation and commercial services.

The second part of the Zone with area of 2,000 hectares is situated on the territory of the airport. It serves to producers and their activities.

Wide range of tax allowance is established for residents of the Zone. Out of 30 kinds of taxes, only six of them have impact on subjects operating in the Zone. Profit tax is decreased to 15 per cent (from set 30 per cent), value added tax is 10 per cent (from set 20 per cent) and it is necessary to pay only internal tax - Belarus.

Entrepreneurs, who decide to produce their products in the Zone, are freed of paying taxes for five-year period since achieving the profit. If 70 per cent of the production is exported, the profit tax is set to 7.5 per cent (half of general)for five-year period.

For the first five years, it is unnecessary to pay tax from dividends. Later, entrepreneurs are obliged to pay only five-per cent tax from dividends. In the Zone, it is possible to establish customs storage-house or wholesale trade for imported goods freed from customs payments and consumption tax. Customs and other payments are paid in output of goods from the Zone in dependence on country of origin.

Goods produced in the Zone are delivered through its borders to Belarus and Russian territory to other countries without import customs and Belarus export customs payments. Especially German investors wishing to produce food, yog-hurts, soft drinks and wines in the Zone expressed an extraordinary interest in this advantage. Italians also expressed interest with their proposals regarding production of furniture, spaghetti, macaroni, chocolate and dyestuffs. Own exchange and banking system is being built inside the Zone. Its aim is to secure convertibility of Belarus rouble to freely exchangeable currencies. Operation on of the Zone's administration is possible via delegation of Belarus government's rules and administrative organs for managing of the free economy Zone.

"Registration of residents last about three weeks. So far, its is not decided yet as to whether we will allocate single, six-month or twelve-month visa. On Bela-rus-Polish border, permits - the so-called green cards - are valid. We would welcome if Slovak investors directed their attention towards the second part of the Zone. Unfortunately, transportation sector is in hands of other investors," says Nikolai Krivecky.

Currently, about 20 residents are registered in the Zone and they invested about US$28 million there. Germans and Poles are the most active. So far, no Slovak investor operates in the Zone.

Slovak Trade FORUM