IT in Belarus it is a great number of such worldwide projects as: Viber, which is one of the top five most downloaded messaging apps, Juno, MSQRD applications, Maps.me offline maps, one of the most popular online games called “World of Tanks” and many more.
IT business in Belarus is more than 500 companies, the most prominent among which is EPAM Systems, the leader in software development outsourcing in Central and Eastern Europe (more than 25K employees globally, of which about 8K employees in Belarus), Game Street, the creators of “World of Tanks”, the most popular computer MMO game worldwide with more than 120 million registered users,. Exadel, provider of business software solutions and creator of development tools and customized Internet applications, Apalon, Aimatter, and many others.
Customers in the IT industry of Belarus are the largest companies in the world from more than 67 countries: Bank of America, eBay, Sears, Abn-AMRO Bank, RBS, Sears, SAMSUNG, Deutsche Bank, etc.
The high level of technical education in the field of digital intelligence and machine learning, 40 years of research in the field of information technology and strong governmental support provides special business environment for IT business with incentives unprecedented for European countries.
The High-Tech Park established in Belarus (hereinafter referred to as the HTP) is one of the largest IT clusters in Central and Eastern Europe.
The Belarusian High-Tech Park was established with the main goal to support software industry by special Decree No. 12 “On the High-Tech Park” adopted in 2005.
About half of the HTP resident companies are companies with foreign capital. Accordingly, half of the companies are established by Belarusian investors. A wide range of benefits and preferences in taxation, accounting, foreign economic and migration sphere formed a unique legal regime of the Park, significantly reducing the costs of companies and simplifying their commercial activity.
The HTP legal regime allows its residents to:
- apply for full companies' exemption from payment of basic taxes and duties
For example, tax on profit regarding the major activities, offshore tax, land tax, real estate tax, import customs duties and VAT are calculated at the rate of 0%. HTP residents only pay 1 percent of their revenue to the HTP Administration for development of the IT infrastructure and the ecosystem.
- application of the reduced rate to some taxes
For example, individual income tax has the fixed rate of 9% for the employees of Belarus HighTech Park companies (instead of 13%), contributions to the Social Security Fund are charged only on the average salary in Belarus (approximately 150 USD per employee).
0% is income tax on the sale of shares of stock of the HTP resident, if the shares were held continuously for at least 356 calendar days.
Foreign Economic Activities of the HTP Residents
- The HTP residents are not subject to the requirements of the Belarusian foreign currency law.
For example, residents are entitled to use electronic money issued by foreign companies to open accounts in foreign banks and make settlements on them without obtaining permission from the National Bank of Belarus, to buy foreign currency in the domestic market without restrictions of its use.
Residents may not satisfy the requirements for the timing and methods of completion of foreign trade operations. This gives them the opportunity to receive export revenue to accounts in foreign currency without controlling the timing of receipt of funds from foreign contracting parties.
For HTP residents, the procedure for processing source accounting documents has been significantly simplified. This means that residents can compile primary accounting document, process several homogeneous business transactions completed in one month, with one source accounting document, at their sole discretion.
HTP residents are allowed to attract foreign work force without obtaining a permit and special permits for the right to engage foreign citizens and stateless persons without permits for permanent residence in Belarus in labor relations.
Application of English Law Institutions
Shareholder agreements in a company may contain provisions on the application of foreign law to them regardless of the presence of a foreign investor in the transaction (Option Agreements, Convertible Loans, Non-Competition, Non-Solicitation, etc.).
What Can HTP Residents Do?
The main activity of the HTP residents is software development, which traditionally includes the following:
- Software data processing.
- Experimental software development, fundamental and applied research.
- Micro, opto- and nanoelectronics - development, technical testing, research.
For example, the HTP resident company called SOFTCLUB-Development Center has been a leading software developer for the banking and financial sector and government bodies for more than 16 years. The company is a certified partner of Oracle Corporation, the second CIS competence center for Oracle integration technologies with offices in Russia, Kazakhstan, Georgia and Belarus.
These are not all opportunities that the HTP can offer to its future residents:
- Development, maintenance, operation and implementation of unmanned vehicle control systems, as well as aviation and space technology.
The HTP resident company called NTLab-IS has developed a navigation system for civilian and special-purpose unmanned aerial vehicles. The complex controls the flight, determines the navigation parameters and orientation parameters according to the GNSS signals.
- medical technologies, biotechnologies and their development and implementation.
On the basis of the HTP, Neurotracker has been developed, which is a device for recording electrical activity of the brain, and the PsychoPharmaGen service, which helps to correctly select the treatment of mental diseases taking into consideration the patient’s characteristics. Another useful innovation is the Ekvidus balance simulator. The device is synchronized with the smartphone and tells the user how to do this or that exercise correctly and even creates an individual training program for a person.
The Hanami project was prominent in the field of biotechnology, allowing improvement of selection of root crops.
HTP resident-companies can work in the field of education and e-sports, including training of eSports teams, organizing and holding competitions.
According to New zoo, in 2018, the global eSports industry reached more than $ 905 million and in 2020 it will be able to exceed $ 1.5 billion. This emerging industry in the HTP is represented by the resident company called Cyber Genesis, the main profile of which is formation of sports teams, participation in eSports tournaments and creation of application software on selected eSports disciplines.
The HTP residents are also entitled to carry out the following: the activity of cryptocurrency exchanges and operations with the exchange of cryptocurrency, mining, ICO as well as performing any other activity using digital signs.
- regarding legal entities engaged in cryptocurrencies, until 2023, the rates of income tax are 0%, the VAT rate is 0;.
- regarding individuals engaged in cryptocurrencies, until January 1, 2023, the income gained from activities related to mining, acquisition/alienation/exchange of tokens will not be recognized as the object of income tax from individuals.