The Republic of Belarus is a country of talents in science and IT. The rapidly growing Belarus’ IT market environment is primarily determined by a specially established tech hub aimed at developing and launching high technology products — Belarus Hi-Tech Park.
What is Hi-Tech Park?
Belarus High Technology Park (further – HTP) is a special tax-free economic zone and a favorable legal regime for its resident companies. First companies were registered as HTP residents in 2006 and by April 2019 the number of HTP residents has grown to 505. Most HTP residents are foreign companies and joint ventures. HTP provides an extremely favorable atmosphere for innovative science technologies and IT progress. The resident companies are engaged in IT and related industries. HTP follows its mission to create business-friendly conditions for high technology industry development in Belarus, paying special attention to the export-oriented programming industry.
Interesting facts about HTP
– World of Tanks game developer company was one of the first to become a HTP resident;
– In 2018, the revenue exceeded USD $1,4 billion;
– First legally licensed and legislated crypto exchange Currency.com is a HTP resident;
– HTP residents are legally allowed to use ICO (initial coin offering);
– Rakuten Viber is also a resident of HTP;
– One of the HTP resident companies is owned by Facebook.
Why HTP Belarus?
Every year HTP Belarus attracts more and more companies as it is the only tech park in Belarus that has the right to provide tax benefits on a regular basis. The resident companies are eligible to obtain significant governmental support. It results quite lucrative to be a resident company of HTP as there are no corporate taxes, value-added tax (VAT), profit tax, and customs duties.
*Profit tax is not paid, with the exception of the tax agent duties. Profit tax rate amounts to 9% from the share alienation in the statutory capital; the sale of the company as a property complex; the sale (redemption) of securities; cash operations.
*VAT is not paid for the sale of goods (pieces of work, services), property rights on the territory of Belarus. This tax benefit is not applicable to sales of goods placed under the customs procedure of export, as well as goods exported to the Eurasian Economic Union member states; it also does not apply to rental payments for real estate.
*Income tax amounts 9% instead of generally applicable 13%. It is a kind of tax raised from employees’ salaries working for HTP resident companies. Lower rate of income tax makes the member companies of the HTP more attractive for highly qualified employees, and companies can grow faster and employ more specialists.
*Profit tax on dividends paid to Belarusian legal entities is 9% instead of generally applicable 13% from the amount of the accrued dividends.
*Profit tax of foreign organizations, which do not carry out activities in the Republic of Belarus through a permanent representative office is not paid by the HTP residents directly, but it is deducted from the remuneration of a foreign organization that Belarusian economic entity pays out. Resident companies have this tax at a preferential rate of 5% instead of generally applicable 12% when paying dividends to a foreign entity, as well as interest income from debt obligations, royalties, license fees.
*Payments to the National Social Security Fund (the NSSF). It is a compulsory tax raised from employees’ salaries in the amount of 34% (contribution to pension and social insurance) which should be paid by the Employer’s company. HTP resident companies have to pay this fee not on the basis of the salary established for a particular employee, but on the basis of the average salary in the country.
*Real estate tax is paid only for real estate objects which are located outside the HTP territory or which are leased.
*Land tax shouldn’t be paid only in case of the building process of constructions for business purposes under HTP regulation by resident companies on the territory of HTP, and not more than for 3 years.
HTP is a virtual hi-tech park. All the legal conditions of HTP are valid on the whole territory of Belarus no matter where the company is located in Belarus. This exterritorial principle of registration allows the resident companies to use the educational, scientific, professional and infrastructural potential of the whole country. Belarus HTP can be without any exaggeration compared to Silicon Valley in the USA. HTP embraces thousands of highly qualified specialists and talents on its territory. HTP provides a huge range of courses and training to improve working skills and nurture employees’ knowledge. As a business incubator, HTP holds a lot of events in the spheres of business and science.
To become a HTP resident company, any legal entity or individual entrepreneur should correspond the necessary requirements according to the Decree of the President of the Republic of Belarus of December 21, 2017 No. 8 “On the development of the digital economy”.
Furthermore, Belarus HTP is not an offshore zone. Only legal entities from Belarus can take part in this organization. All questions about the registration of HTP residents are regulated by the HTP Administration.
How to become a resident of HTP?
Any legal entity or individual entrepreneur should provide a set of documents:
1. Application for registration;
2. Copies of the Company Charter and the state certificate of registration as a legal entity in Belarus;
What type of activities HTP resident can carry out?
HTP residents can carry out a great number of activities. To find out the whole list of activities that can be performed by HTP residents follow this link.
The most usual types of activities fulfilled by the HTP resident companies now are provided below:
— analysis, design and software development of information systems;
— data processing activities using the software of the third party or own software;
— development (research, design (engineering), testing, technical testing) of the equipment for data transmission systems, technologies, devices and systems for radar, radio navigation, radio communications, radio control, radio frequency identification and realization of the results of such developments with the provision of services for mastering them in production or without these services;
— development or individual stages of development (research, design (engineering), prototyping, testing, technical testing), production of high-tech materials, technologies, high-tech devices and systems, embedded systems, software and hardware, software and hardware systems and compatible software, as well as the sale of manufactured products and (or) development results with the provision of services for mastering them in the production and (or) services associated with them or some of those services;
— technical and/or cryptographic protection of information, including the use of electronic digital signature;
— development, maintenance, operation and implementation of unmanned vehicle control systems;
— development, maintenance and implementation of hardware and software technologies for the financial sector (contactless technology of cashless payments, mobile payments, electronic trading and other), financial information technologies;
— creation, training of neural networks and other algorithms in specialized sections of artificial intelligence and the implementation of the results of this activity;
— development or separate stages of development of medical technologies, biotechnologies, and implementation of the results of such developments;
— the activity of the operator of the cryptocurrency exchange;
— other activities using digital signs (tokens), including those containing signs of professional and exchange activities in securities, investment fund activities, securitization, as well as carrying out operations to create and place your own digital signs (tokens);
— activities to promote software, including computer games, for any platform, including the provision of marketing, advertising, consulting services using the Internet;
— data center services;
— services based on cloud computing technologies using software and (or) software and hardware (complexes) developed with the participation of the HTP resident;
— activities on creation of audiovisual, musical works using software developed with the participation of a high-tech park resident, creation of static materials and video materials using computer graphics;
— activities in the field of cybersport, including the preparation of cybersport teams, organization, and holding of competitions, organization of broadcasts, provision of advertising services in the implementation of such activities.
Thus, to become a HTP resident means to receive a wide range of benefits and preferences, assistance in business development. This is very beneficial since Belarus has taken a government course to build an IT-country and develop new science technologies, therefore it is one of the most comfortable places in the world for running the business in these areas. Belarus is the first state in the world where the blockchain and cryptocurrency technologies are settled by the law, a wide legal base is provided; favorable tax policy is held. The above mentioned is confirmed by the fact that in 2018 the revenue of all HTP residents exceeded 1,4 billion USD.