The High-Tech Park in Belarus has long established itself as one of Eastern Europe’s most dynamically developing centres of IT and innovative entrepreneurship. Created to support startups and technology companies, it offers participants various benefits and advantages that contribute to successful business. In the context of the rapid development of digital technologies, the Belarusian economy needs active initiatives to attract investment and develop new technologies. In this article, we will consider in detail why it is beneficial for IT companies to join the High-Tech Park, what benefits of joining the HTP, and what advantages await companies and entrepreneurs who decide to join this unique legal regime.
High-Tech Park – a Unique Legal Regime
The High-Tech Park in Belarus is a jurisdiction for supporting and developing information technology and innovative enterprises. It was founded in 2005, and the HTP Supervisory Board is in the country’s capital, Minsk.
The Main Goals of the High-Tech Park:
- Promoting the development of the IT sector and attracting investment.
- Creating a favourable environment for startups and innovative companies.
- Providing tax preferences and benefits for residents.
The Uniqueness of the HTP Legal Regime Lies in Several Advantages for Park Residents, for example:
- Tax incentives include exemption from income tax, value-added tax (VAT) for exports, and other taxes.
- The ability to legally conduct crypto business.
- The ability to work with foreign business partners more easily.
Who can Become a Resident?
Both Belarusian and foreign companies can become residents of the High-Tech Park. The process involves opening a Belarus company engaged in software development, IT services, or high-tech research and development.
The High-Tech Park promotes the creation of an innovative ecosystem, providing opportunities for cooperation between companies, higher education institutions and scientific organizations.
Why IT Companies Benefit from Joining the HTP
Joining the High-Tech Park (HTP) in Belarus opens up unique opportunities for IT companies and provides several significant advantages:
1. Tax Incentives
HTP residents enjoy an exemption from income tax, a reduced income tax rate for employees (not applicable in 2024), and an exemption from several other taxes. This significantly reduces the financial burden and improves profitability.
2. Access to Financing
Residents can attract investments from various funds and venture companies and participate in the acceleration program and startup grants.
3. Modern Infrastructure
HTP offers high-quality office space and access to modern technologies and communications, creating comfortable work and development conditions.
4. Ecosystem and Networking
Participation in the HTP allows you to establish contacts with other technology companies, startups, investors and scientific institutions, facilitating the exchange of experience and the search for business partners.
5. Human Resources
Belarus is famous for the high level of training of IT specialists, and HTP residents gain access to qualified personnel thanks to local educational institutions and courses.
6. Prospects for External Markets
Thanks to flexible business conditions and international reputation, HTP companies easily enter external markets, which opens up new horizons for growth and development.
7. Use of Legal Institutions Understandable to Foreign Investors
HTP residents can use non-compete agreements, agreements prohibiting the poaching of employees, convertible loans, options, shareholder agreements, and legal structures understandable to foreign investors.
8. Simplified Document Flow
HTP residents do not need to sign primary accounting documents and can also conclude contracts with foreign business partners by exchanging electronic messages without signing paper documents.
9. Conveniently Attracting Foreign Employees
Foreign employees of HTP resident companies can enter Belarus without visas for up to 180 days per calendar year. Companies receive a simplified temporary residence permit for such employees. Also, HTP resident companies do not need special permits to hire foreign workers in Belarus.
10. You can Operate in the Crypto Market
In Belarus, only HTP resident companies can legally operate in crypto exchanges and cryptocurrency exchanges (crypto exchangers), attract financing in cryptocurrencies (ISO), and sell crypto companies.
Thus, residency in the High-Tech Park in Belarus is becoming a profitable and strategically important step for IT companies striving for successful development and market competitiveness.
Let’s take a closer look at tax incentives and other benefits of joining the HTP for companies.
Tax Incentives for Companies – Residents of the HTP
The main tax advantages of residents of the High-Tech Park (HTP):
1. HTP residents are exempt from income tax and can use a reduced income tax rate of 9% for certain types of income. For companies that are not HTP residents, the standard income tax rate is 20%.
2. When conducting trade operations within Belarus and in some transactions with non-residents of the HTP, an exemption from value-added tax (VAT) is provided. The standard VAT rate is 20%.
3. Foreign company owners who receive income from activities in the HTP are subject to income tax at 0% or 5%.
4. Some transactions within the HTP are exempt from offshore tax.
5. Income of individuals — the founders of HTP resident companies, including foreigners, are subject to income tax at a rate of 9%. Rates of 6% or 0% are also possible, depending on the periods of profit distribution between the founders.
6. Real estate in the HTP territory that is not leased is exempt from property tax.
7. Customs duties are 0% when importing equipment intended for HTP residents’ work in high technology.
Other Benefits of Joining the HTP for Companies
1. In addition to software development, HTP resident companies can work in various areas related to high technology: the Internet of Things, robotics, cryptocurrency mining, and crypto exchanges.
2. A company that wants to join the HTP does not necessarily have to be territorially located within the boundaries of the High-Tech Park. HTP residents can work throughout Belarus.
What Companies should Check before Joining the HTP
Taxation System
Residents of the High-Tech Park do not have the opportunity to use the simplified taxation system. Therefore, it makes sense to switch to the general system in advance. If a company that used the simplified taxation system receives resident status not from the beginning of the reporting quarter, this may cause difficulties in calculating the tax base for income tax. In such cases, switching to the general taxation system from the first day of the month in which the HTP resident status was received is advisable. It is also recommended that quarterly income tax reports be filed from the quarter where the transition from the simplified to the general system occurs.
The status of a Park resident comes into effect on the first day of the month following the month in which the Supervisory Board makes the decision. It helps to avoid several issues related to tax and accounting.
Terms of Contracts Concluded with Business Partners
The terms of contracts concluded with all business partners must correspond to the business project that the candidate for HTP resident submitted for consideration to the HTP Supervisory Board.
Types of Company Activities Listed in the Charter
HTP resident companies can only engage in certain high-tech activities permitted for HTP residents. Therefore, it makes sense to check the company’s charter and make changes if it contains activities that HTP residents do not allow. If a company – a resident of the HTP – engages in activities that are not allowed for residents, the company may be deprived of tax benefits and excluded from the HTP.
Contact us
If you have any questions or disputes regarding joining the High-Tech Park in Belarus, we will be happy to help! Our long-term experience will help you resolve any disputes in this area.
- +37529366-44-77 (WhatsApp, Viber, Telegram);
- info@ambylegal.by.
