Decree on HTP

The Belarusian information technology and innovative entrepreneurship sector has undergone significant changes in recent years. One of the most striking examples of such a transformation is the Decree of the President of the Republic of Belarus on creating a High-Tech Park (HTP), which was adopted to stimulate the development of the IT industry and create favourable conditions for innovative companies and individual entrepreneurs. This document became a critical step towards modernizing the country’s economy, providing not only tax benefits and preferences for HTP residents but also support for innovative initiatives, which led to a significant simplification of IT business in Belarus. HTP has become not only a centre of attraction for young entrepreneurs and investors but also a platform for introducing advanced technologies, actively contributing to the integration of Belarus into the global economy. In this article, we will consider the features of the Decree, its characteristics, the impact on the development of startups and the IT sector, and the features that the HTP Decree established in the field of personnel recruitment.

How the HTP Decree Appeared and Developed

The Hi-Tech Park was established in 2005. On September 22, 2005, Decree No. 12 approved the Regulations on the Hi-Tech Park. HTP has become a special legal regime that should ensure the development and competitiveness of the Belarusian IT sector. HTP is not a territory where HTP residents should be registered, but unites its residents with a single preferential legal regime. The HTP territory is located within the borders of Minsk, and there is an opportunity to place a company there. HTP residents may be physically located in different regions of Belarus. Still, they have a more lenient system of taxation and doing business than other companies and entrepreneurs who are not HTP residents.

Due to the active development of the IT sector in Belarus, a new stage of HTP development began in 2017: Decree No. 12 was amended, which has been in effect since March 2018. Decree No. 8, which amended Decree No. 12, accelerated IT business development in Belarus’s food sector. Since 2017, the number of HTP residents has increased more than 5 times. The number of IT product companies has increased more than 10 times.

Brief Description of the HTP Decree

The Decree of the President of the Republic of Belarus on the Hi-Tech Park (HTP) was adopted in 2005. It became an essential step in developing the country’s information technology and innovative entrepreneurship. The primary purpose of this decree is to create favourable conditions for the development of the IT sector, attract investment and support startups.

The Main Provisions of the Decree

1. Creation of a Legal Framework
The decree introduced a legal status for the Hi-Tech Park and defined its functions, tasks and organizational structure.

2. Tax Benefits and Preferences
HTP residents receive significant tax benefits, including exemption from income tax, value-added taxes (VAT), and other mandatory payments for a certain period. This makes Belarus attractive to foreign investors and entrepreneurs.

3. Stimulating Innovation
The decree promoted introducing new technologies and developing innovative products, creating conditions for scientific research and development.

4. Infrastructure
HTP creates modern office and production facilities, laboratories, and research centers, which contribute to a comfortable working environment for programmers, engineers, and startups.

5. Support for Startups
HTP is focused on large companies as well as small and medium-sized enterprises, offering mentoring support, advice, and access to financing.

Impact on the Economy

The decree on the Hi-Tech Park has had a significant impact on the development of the Belarusian economy. Belarus has become known as an IT country, attracting talent and capital. HTP demonstrated a high growth in the number of residents and the volume of IT services exported. Many successful companies, such as Wargaming, EPAM Systems and others, began their journey in this Park.

The prospects

The Hi-tech Park continues to develop, adapting to new challenges and trends in the world of technology. The adoption of new legislation and further development of infrastructure, as well as active cooperation with international partners, open up new horizons for the Belarusian IT sector. HTP’s successes can be a model for other countries seeking to develop innovation and high technology.

Thus, the Decree of the President of Belarus on the Hi-Tech Park became a catalyst for change, helping the country find its place on the global IT map and continuing to play a key role in the formation of a competitive economy.

Opportunities of Decree No. 8

Decree No. 8 of December 21, 2017, extended the special legal regime of HTP. Since 2020, the special regime has been extended until 2049.

HTP residents can carry out more types of activities. For example, they can conduct educational activities in information technology and cyber sports, including training teams and organizing the broadcast of competitions and activities in artificial intelligence.

The possibility of working with Belarusian companies and individuals’ cryptocurrencies has been determined. For example, companies can make transactions with cryptocurrency through HTP residents.

The requirements for crypto brokers and crypto exchanges have been defined. These can only be HTP residents.

The HTP Decree has been amended several times and improved, along with updates for the IT sector.

Tax Benefits Under the HTP Decree

According to the Decree on HTP, tax benefits for HTP residents and individuals on cryptocurrency transactions ended on January 1, 2023, but were extended until January 1, 2025, under a separate Decree on taxation.

The HTP Supervisory Board is the Controlling Body

Companies that operate as crypto brokers and exchanges, provide services for the placement of cryptocurrencies, or conduct other activities with cryptocurrencies must comply with the requirements to prevent the legalization of criminal proceeds, the financing of terrorist activities, and the proliferation of weapons of mass destruction. The HTP Supervisory Board monitors compliance with such requirements.

Such companies should, in particular, develop several documents on internal control and hire personnel responsible for complying with internal control requirements.

Non-Competition Agreement with an Employee

HTP resident companies usually attract employees with high professional skills and value in the labour market. In this case, such companies may sign a non-competition agreement with employees.

According to this agreement, the employee:

Does not have the right to work for hire or under a civil contract with competing companies for a specified period;
Undertakes not to create his own business in a similar field of activity;
Cannot participate in the management of competitive companies.

In an employment contract or in a separate agreement, a resident of the Hi-Tech Park establishes compensation for an employee for entering into a non-competition agreement. The compensation amount is at least one-third of the average monthly salary for the last year of work. The non-competition agreement prescribes the following points:

The territory within which the employee must perform his duties.
The field of activity for which the employee undertakes obligations of non-competition.
Responsibility for violation of the terms of the agreement.

Such an agreement is valid for one year after the employment relationship between the employee and the HTP resident is terminated.

HTP Regulations

The HTP Decree approved the HTP Regulation. The regulation defines the following

areas of HTP activity:

The working procedure of the HTP Supervisory Board.
The procedure for registration of HTP residents.
Requirements for the activities of HTP residents.
Measures of state support for HTP residents. Such measures include tax and customs duty benefits, rent on the territory of the HTP, and contributions to state compulsory social insurance.

Features of Hiring Foreign Employees in HTP Resident Companies

The HTP Regulation provides for the specifics of the stay in Belarus of foreign employees of HTP resident companies. HTP resident companies assume all formalities related to the stay of such employees in Belarus. In particular, they request that foreign employees be granted a temporary residence permit in Belarus for the entire duration of the contract, taking into account the extension of its validity period and 2 months after the termination of the contract.