Joining HTP: Rules and Innovations

In Belarus, one essential tool to support companies that operate in the field of high technologies is the National Hi-Tech Park (HTP), which offers unique conditions for the development and successful business. To become residents of the Park, companies must meet specific criteria and follow established rules, which creates a favourable environment for innovation and economic growth.

What is a High-tech Park in Belarus?

The Belarusian Hi-Tech Park is Eastern and Central Europe’s most significant IT cluster. HTP has been reported as having a modern history since 2017.

The modern Hi-Tech Park is a particular jurisdiction for resident companies engaged in various activities, including software development, fundamental and applied research, experimental work in the natural and technical sciences, mining, and other areas.

Companies already registered as legal entities can become HTP residents after registration by the HTP Supervisory Board. The Hi-Tech Park regime covers Belarus’s entire territory, allowing companies to register and operate in any region of the country.

As of July 2024, HTP has already considered documents for the admission of new companies to the Park residents twice. At the end of June 2024, 43 companies became HTP residents. More than 10 of them were created with foreign investments. As of July 2024, HTP has more than 1,000 companies.

What are the advantages of HTP residency

The advantages of HTP residency are tax benefits, easier recruitment of foreign workers, the opportunity to provide services in the field of cryptocurrencies (to be crypto brokers and crypto exchanges, ICO), simpler document management in transactions with foreign partners and the opportunity to use some legal and institutions that are not yet typical for Belarus.

Tax benefits

The main advantage for HTP residents is tax benefits:

1. Hi-Tech Park (HTP) residents are exempt from income tax and can apply a 9% income tax rate for certain incomes. For non-HTP residents, the standard income tax rate is 20%.

2. VAT exemption applies to trade transactions within and outside Belarus with non-HTP residents. The total VAT rate is 20%.

3. Foreign founders-companies that receive income from HTP activities are subject to income tax of 0% or 5%.

4. Some HTP transactions are exempt from paying an offshore fee.

5. Natural persons-founders of companies who are residents of HTP, including foreign citizens, are subject to an income tax of 9%. Income tax rates can be 6% or 0%, depending on the distribution of profits between the founders.

6. Objects on the territory of the HTP that are not leased are exempt from real estate tax.

7. When importing equipment for high-tech activities, customs duties are 0%.

Attracting foreign employees

HTP residents do not need to obtain special permits to hire foreign workers. Foreign employees of HTP resident companies can easily obtain a temporary residence permit. Visas for foreign workers and HTP founders have been cancelled, and the maximum allowable period of their temporary stay has been increased to 180 days. Thousands of foreign specialists have already made Belarus a great place to move.

What are the requirements for companies that want to become HTP residents

Companies wishing to become HTP residents must meet several requirements that apply to residents.

Certain types of activities

To become HTP residents, companies must operate in high technology. You can choose from 37 types of activities allowed for HTP residents. These activities include:

1. Analysis, design and development of information systems, including the creation of software, documentation and granting of permissions to use software and the assignment of exclusive rights to software, including computer games for various platforms.

2. Development and implementation of user-ordered programs; design and development of automated control systems.

3. Provision of services for implementing, supporting, maintaining and operating information systems and software, including training in working with these systems and software, both of own production and third parties.

These are just a few examples of what companies that wish to become HTP residents can do.

Business project

A company that wishes to become a HTP resident must draw up and issue a Business project of no more than 20 pages. In this document, you need to specify the types of activity allowed for HTP residents and determine how this activity will be conducted. It is very important in a business project to indicate what financial results are planned in high technology. At the same time, all calculations, except for export operations, are made in Belarusian rubles.

In a business project, you need to:

• List the company’s assets and the technologies it owns. Describe business processes and personnel.
• Describe what goods, works, and services are planned to be created during the implementation of the business project.

After the business project is ready, you can collect a package of documents and submit them to the Secretariat of the HTP Supervisory Board for consideration.

Submission of documents for consideration by the HTP Supervisory Board

Step 1. Write a statement

The application for registration of the company as an HTP resident is signed by the company head. It requires the date of submission of documents and the outgoing number.

Step 2. Prepare the documents

Physical documents on paper must be submitted to the Secretariat along with the application:

• The company’s Articles of Association and a copy of the Articles of Association. A certified copy of the Charter is also required. The company’s Charter is needed to compare with a copy. It will be returned.
• The company’s Certificate of state registration and a certified copy of the Certificate. The original Certificate is needed for comparison with a copy; it will be returned, as will the Charter.

The business project needs to be certified with the signature of the company head. It does not need to be fastened with threads. The pages of the business project need to be numbered.

The company’s passport must include information about the founders of the company.

If it is decided to submit a copy of the balance sheet, each copy must be certified.

To confirm the authority of the company head, you must submit a certified copy of the employment contract and a copy of the decision of the general meeting of the company’s participants on the head’s appointment.

Step 3. Submit documents to the Secretariat

The Secretariat informs about the planned acceptance of documents on specific dates on the HTP website. The Secretariat requires the personal submission of documents by the head of the company. That is, the head of the company needs to come to the Secretariat with a package of documents. You do not need to pay a state fee to review documents. In practice, the Secretariat checks the documents before submitting them to the Supervisory Board and can return them to eliminate deficiencies, after which the corrected documents can be submitted again.

Step 4. Wait for the decision of the Supervisory Board

The Supervisory Board usually reviews the documents within a month. It has the right to appoint an expert, whether scientific, technical, or legal. In such cases, the document’s consideration term may be extended up to 2 months. If the Supervisory Board finds flaws in the papers, it will return them for correction within 5 days, after which the documents can be submitted again.

The Supervisory Board of the Hi-Tech Park decides whether to accept the company as a resident or to refuse its registration. The refusal may be justified by a negative conclusion of the scientific and technical expertise of the submitted documents or an assessment by the Supervisory Board of the proposed business project’s insufficient importance for the development of new and high technologies.

Step 5. Receive a Certificate of registration

Receive a Certificate of registration as an HTP resident or an individual enterpneur of the Hi-Tech Park. The Secretariat issues the registration certificate within 10 working days after the Supervisory Board makes the relevant decision.

The Supervisory Board’s decision to accept a candidate for a High-Tech Park resident and approve a new business project comes into force on the first day of the month following the month of its adoption. Before making the decision, the new resident agreed with the Hi-Tech Park.

Features of the transition to HTP residents of an existing company

When a company that has already been operating on the market for some time wants to obtain an HTP resident status, you need to pay attention to several points that may raise questions when considering documents in the ITc and subsequently.

1. Check the company’s activities

Before submitting documents for registration as a resident of the Hi-Tech Park, it is recommended, if necessary, to exclude from the Charter activities that do not relate to the profile of the Park residents. Residents are prohibited from receiving income from activities not approved for residents of the Park, which may lead to the deprivation of resident status and tax benefits.

2. Check the terms of existing transactions

When joining the Hi-Tech Park, all existing contracts must comply with the business project submitted for registration as a resident.

3. Check the tax payment method

Residents of the Hi-Tech Park cannot use the simplified taxation system. Therefore, switching to the general taxation system in advance is advisable. If a resident who previously used the simplified taxation system does not receive his status at the beginning of the reporting quarter, questions arise when determining the income tax base. In such cases, switching to a generally established tax system from the first day of the month in which the Park resident status was obtained is recommended. It is also recommended that residents submit quarterly income tax reports from the quarter in which the transition from a simplified tax system to a generally established one occurred.

Admission to the Park’s residents begins on the first day of the month following the month in which the Supervisory Board made its decision. This eliminates several issues in the fields of tax and accounting.

4. Find out the order of accounting and tax accounting

Accounting and calculations before obtaining the status of a High-Tech Park resident and after obtaining residency require different approaches. The month’s closing before becoming a resident of the Park should take place using the previous tax system, using the previous rates and without considering the benefits provided to residents.