Regulation on the Hi-tech Park

The Hi-Tech Park, as a legal regime, has become an important element in the development of science and technology. Created for the development of exports in the field of high technologies and to attract investments in the development of the IT sector, the HTP is not only a territory for hosting high-tech companies but also a platform for the exchange of knowledge and ideas and a special legal regime for residents of the HTP. This article will consider the main sections of the Regulation on the Hi-Tech Park, which establishes the specifics of HTP residents’ activities and HTP management.

General Information about the HTP Regulation

The Regulation on the Hi-Tech Park is the main document on which the HTP work is organized. The regulation has been in force since 2005 and was updated in 2017. 

The HTP Regulation describes:

• The main directions of HTP functioning.
• The working procedures of the HTP Supervisory Board.
• Registration process for HTP residents.
• The requirements that apply to the activities of HTP residents.
• State support for HTP residents includes tax and customs benefits, rent reduction in the HTP territory, benefits, and exemption from compulsory social insurance contributions.

Requirements for Residents of the Hi-Tech Park

The HTP Regulations and Decree No. 8, which approved this Regulation, list the types of activities available to HTPresidents. There are more than 40 such activities, including:

• Development and design of software and high-tech products.
• The activities of online exchanges, including cryptocurrency exchanges.
• Other activities in the field of cryptocurrencies.
• Training in the IT field.
• Advertising software promotion online.
• Activities in the field of esports and advertising in this field.

Companies that want to become HTP residents must carry out one or more activities from the list of available activities or plan such activities.

The HTP Regulation establishes the procedure for submitting documents to the HTP for consideration by companies and individual entrepreneurs who want to become HTP residents.

In particular, along with the application for joining the HTP, copies of the charter (certificate of state registration of an individual entrepreneur) and a business project the applicant plans to implement as a resident of the HTP are submitted for consideration. The Belarusian government has approved the business project.

Deciding on Admission to HTP residents

The HTP Regulation establishes the procedure for reviewing applicants’ documents for residence in the HTP. 

In particular, the documents are reviewed by the Supervisory Board of the Hi-Tech Park within one month. When deciding on admission to HTP residents, the Supervisory Board considers the importance and significance of the development of new and high technologies of the business project submitted by the applicant.

The Supervisory Board has the right to send a business project for examination, which requires the conclusion of an external audit on projects related to the circulation of cryptocurrencies.

The HTP Regulation defines the grounds on which the HTP Supervisory Board refuses registration to applicants for HTP resident status. There are only two such reasons:

• A negative conclusion of the scientific and technical expertise of the business project.
• The Supervisory Board decides that the business project is not important and important for developing new and high technologies.

Although the HTP Regulation mentions the HTP Administration, the HTP Residents Register is currently maintained by the HTP Supervisory Board Secretariat. The Secretariat issues certificates to HTP residents to confirm their status.

Features of conducting business by HTP residents

The HTP Regulation defines the specifics of conducting business and the rights and obligations of residents of the Hi-Tech Park.

Responsibilities of HTP residents

In particular:

1. The HTP concludes an agreement with the HTP resident on the terms of the resident’s activity in a form approved by the HTP Supervisory Board. 
2. The duties of the HTP resident are defined. The resident is obliged to carry out the activities allowed for HTP residents and quarterly deduct 1% of revenue to HTP. The procedure for calculating revenue, from which 1% is deducted, is defined.
3. HTP residents must inform HTP and the tax service every quarter about the flow of funds on foreign bank accounts and electronic wallets.
4. Residents must conduct a mandatory annual audit of the annual accounting (financial) statements and inform the HTP of the audit results.
5. HTP residents must submit an annual report on their activities to the HTP.
6. HTP residents must inform HTP about changes in the company’s charter, the certificate of an individual entrepreneur and the decision to liquidate (terminate activities).
7. Residents keep separate records for each type of activity for which there are tax benefits.
8. HTP residents should receive an external audit opinion on projects related to cryptocurrencies.
9. Residents must inform the HTP and the tax service within 30 days of opening accounts with foreign banks.

The rights of HTP residents

HTP residents have the right in particular:

1. To rent out the real estate. The HTP Regulation defines the procedure for such delivery.
2. To give loans to employees at the expense of profits. Other companies that are not HTP residents also have this opportunity.
3. To be owners and shareholders of both Belarusian and foreign companies. 
4. Residents may conduct new high-tech activities not declared when registering as an HTP resident, subject to approval by the Supervisory Board of a new business project or an addition to an existing business project.
5. Property an HTP resident uses can be alienated no earlier than 12 months later.
6. Involve contractors in their activities, but not 100% participation.
7. To draw up primary accounting documents individually to execute several business transactions with one primary accounting document.
8. Conclude contracts with foreign business partners by exchanging electronic messages.

State Support for HTP residents

Measures of state support for HTP residents include:

• Tax benefits and conditions for applying for such benefits include exemption from several taxes and preferential rates of such taxes: income tax, VAT, offshore levy, and others.
• Exemption from payment of land tax and real estate tax on plots and real estate located on the territory of the HTP.
• Exemption from income tax for foreign companies that do not operate in Belarus.
• Features of the state social insurance of employees of HTP resident companies. In particular, the ability to apply a benefit to the amount of an employee’s income, from which the contribution to the social protection fund is calculated.
• The benefit of introductory customs duties on imported equipment for use in work and the conditions for applying for this benefit.
• Preferential conditions for renting state-owned real estate for HTP residents on its territory.
• The preferential tax rate on dividends of foreign owners of HTP resident companies is 5%.
• The procedure for “inheriting” the benefits of HTP residents during their reorganization.
• The antimonopoly authority’s consent is not required for the reorganization of HTP residents or for transactions with their shares or shares in authorized funds.

Deprivation and Loss of HTP Resident Status

The HTP Regulation establishes cases when a HTP resident may lose the status of a resident. In particular, this is possible at the HTP resident’s request and in case of non-fulfilment of the HTP agreement’s terms and the business project’s non-fulfilment.

The HTP Supervisory Board may also retain the status of an HTP resident but deprive him of the right to benefits if a resident conducts activities unrelated to his work as an HTP resident. Benefits are lost for the entire year in which the violation was committed. In this regard, the resident pays additional taxes, penalties and fines related to late payment of taxes.

If the HTP resident status is lost, the agreement on the terms of the resident’s activity, which was concluded with the HTP, is terminated. Also, a company or individual entrepreneur who has lost the status of an HTP resident must submit a certificate of registration as an HTP resident.

Features of Attracting Foreign Employees and Managers

The HTP Regulation establishes the location of foreign employees of HTP resident companies in Belarus. HTP resident companies take over all organizational aspects of their stay in the country. In particular, they apply for a temporary residence permit for foreign employees for the entire contract duration with the possibility of an extension two months after completion.

If the country where the foreign employee resides has a visa regime for entry to Belarus, then a visa is not required to work in an HTP resident company. A visa is also not required for owners of HTP resident companies and employees of HTP resident owner companies. These persons have the right to stay in Belarus for up to six months in a calendar year without needing a temporary residence permit.

Functions of HTP Management Bodies

The HTP Regulation establishes the specifics of HTP management and defines the tasks and functions of the Hi-Tech Park’s management bodies.

In fact, since 2023, the activities of the Supervisory Board have been provided by the Secretariat of the HTP Supervisory Board, which is not mentioned in the HTP Regulations. The Secretariat performs several functions, called the HTP Administration’s functions in the HTP Regulations.

The permanent HTP Supervisory Board makes decisions on the admission of new residents to the HTP, coordinates its work, and manages it. The Supervisory Board also decides on the need for expertise in business projects of HTP residents and candidates for residents, opens registration of HTP residents, and interacts with government agencies on the development of the IT sector and high-tech industries.