IT in Belarus

Development of the IT industry, the effort to build an IT country, transition to the digital economy, and the Hi-Tech Park, the country’s IT hub... Figures and facts illustrating Belarus’ most dynamic industry are in our review.

Belarus’ IT: Stakes are rising

The history of information technology in Belarus goes back decades. Strong educational traditions in mathematics engineering and software were established in the country back in the Soviet times. These professionals would become the driving force behind the most advanced projects and innovations in the country.

Continuing the tradition, almost a quarter of Belarusian university students currently major in STEM, including about 70 IT specialties. It is no secret that many Belarusians work in big tech companies all over the world. But, of course, the main personnel pool is concentrated in the country.

In sovereign Belarus, the IT has been the fastest growing industry. It has been steadily turning into the main driver of economic growth, the powerhouse of strategic importance. Set up in 2005, the Hi-Tech Park (HTP) has matured into the Belarusian Silicon Valley. Thanks to the principle of extraterritoriality its resident companies can open offices in any locality of the country.

Belarus, the HTP and its resident companies rank high on the global and regional rankings assessing the IT achievements. Software from Belarus often makes headlines in the IT world.

Figures and Facts in Brief

Belarus ranked 32nd on the International Telecommunication Union Measuring Information Society Report in 2017.

The information and communication technology sector generated 6.2% of Belarus’ GDP in 2019. Belarus has set out to increase the share of the ICT sector to 7.5% of GDP by 2025.

Belarus is one of the world’s major exporters of IT services per capita. From 2005 to 2016, the export of IT services and products increased 30-fold, and the share of IT export rose from 0.16% to 3.25% of the country’s total exports of goods and services.

In 2017, the HTP hit the milestone export mark of $1 billion. That year the export amounted to $1.025 billion, going up by 25% ($820 million in 2016) while import of services totaled $5 million. The HTP reported the output of Br2.153 billion (more than $1.08 billion), up by 20% over 2016.  In 2019, the Hi-Tech Park hit another export milestone of $2.195 billion, up 55% year-on-year. The export of Belarus' Hi-Tech Park exceeded $2.7 billion in 2020 to account for more than 20% of Belarus’ export of services.

Belarusian IT companies sell mostly internationally. More than 90% of the software produced in the Belarusian HTP is bound for export: 49.1% - to Europe, 44% - to the United States and Canada, 4.1% - to Russia and other CIS countries.

Six HTP resident companies were included in the list of the best outsourcing service providers (2017 Global Outsourcing 100): Bell Integrator, Ciklum, EPAM, IBA Group, Intetics and Itransition.

Ten companies having offices in Belarus made it to the Software 500 revenue-based ranking of the world’s largest software and services suppliers: EPAM (107), Bell Integrator (281), IBA (281), Itransition (368), Coherent Solutions (393), SoftClub (409), Artezio (416), Intetics (419), Oxagile (456), IHS (482).

Belarusian companies provide IT services to the world’s biggest corporations and organizations (Samsung, HTC, London Stock Exchange, World Bank, Microsoft, Coca-Cola, Toyota, Google, British Petroleum, etc.).

Mobile applications developed by resident companies of the Belarusian Hi-Tech Park are used by more than a billion people in more than 190 countries of the world. Among them are Viber, MSQRD, MAPS.ME, Flo and many others.

Developed by Wargaming (Belarus-based R&D center Game Stream) World of Tanks is one of the five most profitable MMO games in the world. It has racked up more than 160 million registered players in the past 10 years.

Belarus is one of very few countries that develop supercomputers.

Over the first two decades since Belarus embarked on building its IT industry, local companies have earned a reputation as first-class developers, while Belarus has become to be known as a great IТ outsourcing destination. However, this business pattern is gradually changing.

Today, the domestic IT sector is switching to the product model. Belarus seeks to attract international corporations and tech giants in a bid to digitalize its economy. The government will rely not only on intellectual potential of domestic IT specialists. It has adopted unprecedented legislative initiatives designed to create the most favorable conditions for IT business in Belarus, and in the long run - to turn the country into a financial haven that offers a convenient, business-friendly environment that will help companies thrive and grow.

Belarus President Aleksandr Lukashenko set ambitious goals during his address to the Belarusian people and the National Assembly in April 2017. “Artificial intelligence, self-driving cars, blockchain technologies, digital currencies ... Our task is to offer conditions that would encourage global tech giants to open offices and R&D centers in Belarus and develop high-demand products with a high added value. Today, our Hi-Tech Park and the IT community are synthesizing the world’s best practices, accumulating ideas that will allow removing all obstacles hampering the development of the IT sector,” the president said.

Decree No.8 “On Development of the Digital Economy”

The document signed by the Belarusian president came into force in March 2018. The decree “On Development of the Digital Economy”, which experts called ‘revolutionary’, is meant to give Belarus a serious boost in building the economy of the 21st century and turning into an IT country. This will be done by attracting global IT companies and creating a unique business climate in the IT sector. Another objective of the document is to harness the technological advances to improve the living conditions of people.

The document, informally called the Decree on HTP 2.0, became a groundbreaking document for the Belarusian Hi-Tech Park, which is viewed as one of the drivers of the country’s economic growth thanks to extensive state support. The special legal regime in the park will be running till 2049.

The new decree stimulated an increased interest in the HTP: more than 100 new resident companies joined the park in H1 2018, which was record high. A visa waiver for foreign workers and founders of HTP resident companies also contributed to that.

According to experts, the new decree opens up new opportunities for innovations in the most advanced areas, from artificial intelligence to virtual reality.

Key advantages

More areas of activity for HTP

The new document significantly expands the list of business activities for HTP resident companies who can develop software and high-tech products with a high added value. The updated list includes biotechnology, healthcare, aerospace technology, unmanned transportation systems, cyber sports, cryptocurrency exchanges and many more. There are no restrictions on the amount of revenue from additional types of activities.

Special HTP regime valid until 2049

The decree extended the special tax and legal regime for the HTP through 1 January 2049. Among its main advantages are a reduced income tax (down to 9%), exemption from revenue tax and VAT. In addition, visas and work permits were waived for HTP resident founders and workers.

Note! The Law No. 72-З “On Amendments to the Tax Code of the Republic of Belarus” as of 29 December 2020 came into force on 1 January  2021. The law contains some substantial amendments to taxation regulations.

In line with the document, the personal income tax of employees of the Hi-Tech Park, the China-Belarus Industrial Park Great Stone and (or) the Great Stone Development Company was increased from 9% to 13%. The increased rates will be valid until 1 January 2023. According to the Tax and Duties Ministry, this move is aimed at consolidating budget revenues to combat COVID-19. At the same time, the main package of investment benefits for resident companies of the HTP and the Great Stone park remains unchanged.

A reminder, the income tax base rate for individuals amounts to 13% in the Republic of Belarus.

Legalization of cryptocurrencies, ICO, and smart contracts

With the adoption of the decree, Belarus became the world's first jurisdiction to offer a comprehensive legal treatment for businesses based on blockchain technology and the world's first country to legalize smart contracts. Cryptocurrency exchanges and exchange offices can operate in the Hi-Tech Park. Individuals and legal entities are allowed to mine, buy, give away, and exchange cryptocurrencies. Until 2023, mining, purchasing, and selling tokens will be tax free for individuals and resident companies of the Hi-Tech Park.

Simplified Operation of IT Companies

Decree No.8 has significantly cut down on red tape in IT business. The document allows making international transactions in the digital form using the internet. It also removes a number of limitations for conducting operations with digital currencies by the Hi-Tech Park resident companies. The requirement to obtain a permission to open a deposit in foreign banks was also waived.

Introduction of Some English Law Components

Belarus rolled out some legal novelties with respect to activities of the Hi-Tech Park resident companies. The decree provides for introduction of several English law components: convertible loans, stock options, option contracts, non-competition and non-solicitation agreements, and indemnification of material losses.

IT Education Support and IT Specialists Training

Belarus has set out to develop the IT industry and to promote digital transformation of the economy. This is why training of specialists is a priority. Decree No.8 formalized the right of the Hi-Tech Park resident companies to provide training and education in the field of ICT.

Interesting facts

Around 7,000 IT specialists with a university degree graduate in Belarus every year. They are trained in 21 universities across the country.
 
IT specialists in Belarus are trained mostly at:

• Belarusian State University of Informatics and Radioelectronics
• Belarusian State University
• Belarusian State Technological University
• Belarusian National Technical University

In 2016, resident companies of the Hi-Tech Park initiated, with the support of the Education Ministry, a project to teach the Scratch programming language to school students of the 2nd-6th grades. Thousands of Belarusian school students study this language nowadays.

In 2018, an IT company was set up in the Armed Forces of Belarus. Its task is to develop software, special and application programs in association with departments of the Military Academy and other research facilities and educational institutions. The IT company’s main areas of work include combat simulation, navigation support, automated control and radiolocation systems, and so on.

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