Why Belarus is Attractive for IT Business?

Despite its small geographical size, Belarus attracts the attention of the global IT community with its dynamic development and innovative approach to technology. This Eastern European state has become one of the leading information technology players, attracting local and foreign investors. What makes Belarus attractive to IT businesses, and what factors contribute to its success? Let’s explore.

Belarusian High-Tech Park 

The Hi-Tech Park is one of Europe’s largest accelerators of IT companies. More than 1,000 Belarusian companies and more than 100 development centres of foreign companies have the status of residents of the Belarusian Hi-Tech Park.

Why is it profitable to become a resident of the Belarusian Hi-Tech Park:

1. Tax benefits
The Park has a special tax regime for resident IT companies, which is more preferential compared to the generally accepted one in the country:

• No value-added tax (VAT).
• No income tax.
• No offshore fee.
• The absence of customs duties on the import of technological equipment.
• No tax on the income of foreign organizations, including the sale of their shares (stakes) in the resident companies of the Hi-Tech Park.
• There is an absence of VAT and income tax on transactions with cryptocurrency and other transactions with tokens.
• There is no real estate tax on real estate located geographically in the Hi-Tech Park that park residents do not rent.
• The absence of land tax on plots located on the territory of the Hi-Tech Park for no more than three years during the construction of real estate by residents that will be used in the activities of Park residents.
• 5% – income tax on foreign organizations that do not have a representative office in Belarus when paying dividends to them by Park residents.

2. Legal transactions with cryptocurrency
Only with the help of residents of the Park in Belarus is it possible to officially conduct operations with cryptocurrency: receive the services of crypto exchanges – residents of the Park and exchange cryptocurrencies with the help of crypto exchanges-residents of the Park. 
3. Residents of the Park can work anywhere in Belarus
Residents of the Park do not have to unite on the same territory. Companies can be registered and located in any area of Belarus.
4. A variety of permitted activities
Companies that engage in certain types of activities can join the Hi-Tech Park, where residents can conduct more than 40 types of high-tech activities. 
5. Using the right familiar to investors
Investors of High-Tech Park resident companies can use the familiar institutions of English law: agreements prohibiting the poaching of employees, non-competition agreements, options, convertible loans, and shareholder agreements. In Belarusian practice, such institutions have not yet become widespread or regulated.
6. Conclusion of contracts in electronic form
Residents of the Park can conclude contracts with foreign partners by exchanging electronic documents without signing a physical document on paper. In Belarus, it is customary to conclude contracts on paper with the signatures of representatives of each party to the contract.
7. Sole registration of documents
Park residents can issue primary accounting documents individually without the physical signature of a representative of a foreign partner. Usually, such documents are signed by representatives of each party involved in the transaction.
8. Simple procedure for hiring foreign employees
The park residents do not need to obtain special permits to hire foreign workers. A foreign employee of a resident company can obtain a temporary residence permit in a simplified manner. Foreign employees, founders, and owners of the park residents’ property are provided with the possibility of visa-free entry to the Republic of Belarus. The maximum period of their temporary stay has been increased to 180 days during a calendar year.
9. The opportunity to attract qualified employees from Belarus
Since the residents of the Park have a more favourable tax regime, they can make competitive offers to IT specialists from Belarus and attract the best employees in their field, including through higher remuneration compared to other companies.
10. Low “salary” taxes in Belarus compared to many countries
This economic factor helps foreign companies that invest in the IT business in Belarus to save money.
11. Personal income tax
Suppose we consider income tax, which is 13% in Belarus. In that case, we can calculate the savings on this tax when hiring employees in Belarus compared to hiring employees in other countries. 
Thus, according to the Tax Foundation, income tax rates in 2024:

• in the United States, on average, IT employees range from 24 to 37%.
• In Europe, the average personal income tax rate is 42.8%:
• In Denmark, 55.9%.
• In France – 55.4%
• In Austria -55 %

These are the highest figures, although tax rates of around 40% are generally common in European countries.
The lowest income tax rates in Europe are in Hungary – 15%, Estonia – 20% and the Czech Republic -23%. In Georgia, the income tax is 20%, and in Ukraine it is 19.5%.
12. Contributions to the social fund
In Belarus, salaries are deducted from the Social Protection Fund, which amounts to 1%. However, the company must pay 34% of the total wages of all employees to the social fund.
The amount of social insurance contributions in European countries can vary significantly depending on the specific country and the specifics of their social protection system. Social Security contributions are usually a percentage of an employee’s salary.
For example, in Germany, the average standard insurance premium rate is about 18.6% (9.3% is paid by the employee, 9.3% by the employer). The insurance premium rate in France varies depending on the employee category and is approximately 20-25%.
The situation may be different in other European countries. For example, social insurance contributions in Switzerland depend on wages, but the total contributions may be lower than in some other countries.
In addition, additional insurance contributions may also exist in various European countries, such as pensions, health insurance, unemployment benefits, etc.
In general, if we analyze the costs of employees in a complex, hiring IT staff in Belarus is often more profitable than in other countries.

More reasons why Belarus is attractive for IT business

Apart from the Hi-Tech Park and tax benefits, Belarus is attractive for IT business for several other reasons:

Geographical location
Belarus is located in the centre of Europe, providing convenient access to Europe’s markets and the CIS countries. This contributes to developing international cooperation and provides opportunities for business expansion.

Qualified personnel
Belarus has a high level of education, which allows companies to quickly find qualified specialists in information technology. This helps to accelerate the development and implementation of innovative projects.

Well-developed IT infrastructure
Belarus has a well-developed network of Internet service providers, high-quality technology parks, and a well-developed telecommunications infrastructure, contributing to IT companies’ effective operation.

State support
The government actively supports the information technology industry, creating favorable business development and innovation conditions. This includes startup support programs, investments in IT education, and other measures.

These factors and other favorable conditions make Belarus an attractive place for IT business development.