Every startup founder eventually wants the same thing: to give the early team a slice of the upside, so the people building the company share in what they build. In most of the world that means stock options. In Belarus, for years, the honest answer to a founder who promised an engineer “two percent when we exit” was that the promise was worth nothing — the law had no instrument to make it real, and a handshake is not a cap-table entry.
Hi-Tech Park residency changed that. Decree No. 8 gave HTP residents a toolkit Belarusian civil law had never had — option agreements, convertible loans and more — and let them grant employees real, enforceable options, including options over an actual stake in the company. So an HTP company can run a genuine option scheme, not a promise. The catch is that “genuine” means done properly: the right instrument, real vesting and leaver terms, the tax handled, and an eye on whether you are an HTP resident at all. This piece is how it works, and where founders go wrong.
It is general information, not legal advice. Equity schemes turn on the company’s specifics, so design yours with advice rather than a template.
To see why HTP mattered, start with the problem it solved. Classic Belarusian civil law simply had no option instrument — no legal form for “the right, but not the obligation, to acquire a stake later on agreed terms.” And transferring a participation interest in an LLC is notarially heavy, boxed in by pre-emption rights and formalities. So a founder’s promise of future equity was legally hollow. “You’ll get a share when we grow” created no right the employee could enforce and nothing a future buyer would recognise on the cap table. Talented people were being asked to bet on a company for a promise the law wouldn’t back. That is the gap HTP filled.
Decree No. 8 of 2017 built a distinct legal environment for HTP residents, importing instruments from English law that Belarusian civil law lacked — option agreements, convertible loans, irrevocable powers of attorney, representations and warranties, and the freedom to structure deals on “HTP law” terms. The Hi-Tech Park regime is what carries these tools. The piece that matters for employee equity is the option, and specifically that an HTP resident may grant an option over a stake — a participation interest in an LLC, or shares in a joint-stock company. That single change turns a promise into a right: the employee holds an enforceable option to acquire real equity on defined terms, documented and recognisable, rather than a verbal assurance. Everything else in an option scheme builds on that foundation.
In practice an option scheme looks much like it does anywhere, now that the instrument exists. The company sets aside an option pool and grants an employee an option — a documented right to acquire a stake (or shares in a JSC) at a set price, on defined conditions. Those conditions are usually a vesting schedule — a one-year cliff, then monthly vesting over three or four years is the common shape — or performance indicators, or both. As the option vests and the conditions are met, the employee can exercise it and acquire the equity at the agreed strike price. Because exercising involves transferring a stake, the scheme is often backed by supporting tools Decree No. 8 also enabled, such as an irrevocable power of attorney, so exercise actually works when the moment comes. The point is that each step is now a real legal act, not an IOU.
Follow one option through its life and the mechanics stop being abstract. An HTP company hires a senior engineer and, rather than a bigger salary it can’t yet afford, grants them an option over one percent of the company — four-year vesting, one-year cliff. They stay. At the end of year one, a quarter of the option has vested, and it keeps vesting monthly after that. Three years in, a buyer turns up and offers to acquire the company. The option is documented and the vested portion is real, so the engineer exercises — buying the stake at the agreed strike price — and sells it into the deal alongside the founders, turning three years of below-market pay into an actual payout. Now run it without HTP and without a real option: all she had was a verbal “one percent,” nothing on the cap table, and at exit she’s left with an argument, not a right. Same work, same company — the difference was a signed option under a regime that recognises it.
An option scheme is a set of documents, not a single form, and getting the set right is what makes it hold. At the centre is the option agreement with each employee — the grant, the strike price, the vesting or performance conditions, and the leaver terms. Around it sit the scheme-level rules that define the option pool and how grants are made, the corporate approvals the company’s charter and the law require, and the supporting instruments that make exercise enforceable, such as an irrevocable power of attorney. Where the company has a shareholders’ or participants’ agreement, the option scheme has to fit it — how new option-holders vote, transfer restrictions, drag and tag — so an exercising employee slots cleanly into the existing ownership structure rather than upsetting it. A scheme documented properly at this level is one an employee can rely on and, just as importantly, one a buyer can read.
Not every scheme should hand out actual equity, so the instrument is a real decision. A real option gives the employee an actual stake on exercise — true ownership, and with it the transfer formalities and the reality of a new name on the cap table. Phantom equity takes a different route: a cash bonus that tracks the company’s value, delivering the upside without transferring a stake or putting employees on the register — often the pragmatic choice for a broad employee scheme, or where founders want to keep ownership tight. The convertible loan is worth naming only to set it aside: it is a Decree No. 8 instrument too, but an investor tool — money in now, converting to a stake on a trigger — not a way to pay employees. Founders conflate the three; the table below keeps them straight.
Two practical layers decide whether a scheme works. The first is tax. Part of HTP’s appeal is its regime — residents are exempt from most taxes, and there have historically been reduced burdens for their staff — but the employee-side reliefs have moved (the reduced employee income-tax rate was suspended in 2024, for instance), and the option benefit itself — acquiring equity below value, or a phantom payout — is income that has to be planned for. Treat the tax as something to confirm for the current year, using the tax authority’s current position and our HTP benefits overview, not to assume.
The second layer is retention engineering, which is the whole point of options. Vesting with a cliff means an employee who leaves in the first year keeps nothing; good-leaver and bad-leaver terms decide how a departing employee’s vested option or stake is treated; and the option pool has to be sized so grants don’t dilute the founders into regret. A scheme without leaver terms simply leaks equity to people who are no longer building the company.
Options are powerful, but they are not always the answer, and offering them reflexively can disappoint everyone. Equity only motivates if there is a realistic prospect of it becoming worth something — an exit, a dividend, a buyer — so for a services company with no exit on the horizon, a share that never turns into cash is a hollow reward, and a straightforward bonus or a higher salary may do more for retention. Options also suit people who think like owners; not every valued employee wants to be a shareholder, with the risk and the long horizon that implies. And a broad grant of real equity to many employees complicates the cap table for years. The honest question before granting is whether this person, in this company, will actually be motivated by a stake — and if the real answer is that they would rather have cash, phantom equity or a bonus is the better tool.
One currency check before you build. The fullest, most established option toolkit — and the tax advantages — are tied to HTP residency, which for most product IT companies is worth having anyway. But the ground is shifting. From late 2024 the Civil Code began opening the convertible loan to all Belarusian companies, and reforms to the Law on Business Companies have been extending options over a stake and shareholder-agreement tools beyond the Park. So an ordinary company can increasingly do some of this too — though HTP is still the strongest, clearest home for an employee-equity scheme today. If you’re setting up or entering the Park, build the option scheme into that step rather than bolting it on later.
There’s a single moment that puts an option scheme to the test — and it’s the whole reason you built one: the exit. The moment a buyer sets out to acquire the company, one of the first things they’ll want is the cap table, showing who owns what, together with the documents behind every option you’ve handed out over the years. If that’s all in order — each grant properly papered, each vested slice clear — diligence goes smoothly and your people actually get to realise their equity. If instead it’s a drawer full of vague promises and drafts nobody signed, you’ve got a problem that can drag the deal out or knock the price down, because a buyer won’t pay full value for ownership they can’t confirm. Which is why documenting options properly isn’t box-ticking; it’s protecting the company’s value at the exact point it gets turned into cash. Clean options are simply part of being sellable.
The same few mistakes keep coming up, and all of them are avoidable. Top of the list is the verbal promise — assuring a new hire they’ll “get equity” without ever putting an option on paper, which leaves neither side with anything they can enforce. Then there’s granting with no vesting, so an employee who quits after six months keeps a stake they never really earned; and granting with no leaver terms, so people who’ve long gone are still sitting on the cap table. Founders tend to be too generous too early as well, giving away sizeable slices before they’ve worked out how much of the company that adds up to — and then finding nothing left in the pool for the hires who come later. And a lot simply overlook the tax, so the benefit shows up as an income event nobody planned for. What links all of these is treating options casually — as a nice gesture rather than a legal instrument. Handle them as the instrument they are and none of it happens.
Three tools, three jobs — and only two of them are for employees.
| Real option over a stake | The employee gets a right to acquire an actual stake in the company on vesting or exercise | You want to give true ownership and can handle the transfer formalities |
| Phantom equity (cash) | A cash bonus that tracks the company’s value; no actual stake is transferred | You want to share the upside without adding names to the cap table |
| Convertible loan | An investor lends money that converts to a stake on a trigger — an investor tool, not an employee one | Raising early money, not incentivising staff |
*General guide; the right tool depends on your goals and your regime, and the rules are changing, so confirm the current position.
Yes — if you are an HTP resident. Decree No. 8 legalized option agreements for Hi-Tech Park residents, options over a stake in the company, so an HTP company can grant employees real, enforceable options. Outside the Park it has historically been much harder, though recent reforms are widening what ordinary companies can do.
For the fullest, most established toolkit and the tax advantages, yes — the option regime was built for HTP residents. But this is changing: from late 2024, the convertible loan was generalized to all companies, and option and shareholder-agreement tools are being extended beyond the Park. HTP is still the clearest home for an employee-equity scheme today.
No. “You’ll get a share when we grow” creates no enforceable right and nothing a buyer will recognize on the cap table. That is exactly the problem the option instrument solves: it turns the promise into a documented, enforceable right. Never rely on a handshake for equity.
A vesting schedule releases the option over time or on hitting targets — commonly a one-year cliff then monthly vesting over three or four years — so employees earn their equity by staying and contributing. Yes, an HTP option scheme can use vesting, and it is what makes options a retention tool rather than a giveaway.
A real option gives the employee an actual stake on exercise — true ownership. Phantom equity pays a cash bonus tracking the company’s value, giving the upside without transferring a stake or adding names to the cap table. Real options suit key hires you want as owners; phantom options suit broad schemes or founders who want to keep ownership tight.
The benefit — acquiring equity below value, or a phantom payout — is income, and the HTP tax regime shapes the overall picture, though employee-side reliefs have changed (the reduced employee income-tax rate was suspended in 2024). Treat the tax as something to confirm for the current year rather than assume, because this area moves.
Whatever the leaver terms say — which is why a scheme needs them. Good-leaver and bad-leaver provisions decide whether a departing employee keeps their vested option or stake and on what terms, and vesting means unvested options simply lapse. Without leaver terms, a scheme leaks equity to people who have left.
Increasingly, yes. The convertible loan was extended to all Belarusian companies from late 2024, and options over a stake and shareholder-agreement tools have been broadened by corporate-law reforms. But HTP remains the fullest and most tax-advantaged regime for an employee-equity scheme, so for most IT companies it is still the natural route.
There’s no set figure — it turns on seniority, timing and how big the option pool is. An early key hire might get a meaningful percentage; later or company-wide grants are much smaller. What matters is having a defined pool, so grants are deliberate rather than ad hoc and you always know how much of the company you’ve committed in total.
At a minimum: an option agreement with each employee (the grant, strike price, vesting and leaver terms), scheme-level rules that define the pool, the corporate approvals your charter and the law require, and supporting tools — an irrevocable power of attorney, say — to make exercise actually work. If there’s a shareholders’ agreement, the scheme has to fit it. And bear in mind these are the documents a buyer will later ask to see.
Yes — they are one of the classic deal problems. When a buyer runs diligence they want the cap table and the documents behind every option; verbal promises and unsigned drafts can delay or reduce a sale, because a buyer will not pay full value for ownership it cannot verify. Documenting options cleanly protects the company’s value at exit.
Employee stock options in Belarus went from impossible to real the day HTP arrived. Decree No. 8’s instruments make a genuine, enforceable scheme achievable — an option the employee can rely on and a buyer can see on the cap table — as long as you use the actual option rather than a promise, structure vesting and leaver terms, and plan the tax. The founder’s rule survives all of it: never promise a specific share informally; put it in an option.
If you run an HTP company, or are heading into the Park, and you want to give your team real equity, tell us the shape you have in mind and we will design and document the scheme — real options or phantom, vesting, leaver terms and tax — so it holds up when it matters. Get in touch and we will take it from there.
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