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22 december 2017

Belarusian IT revolution

On December 21, 2017 the President of the Republic of Belarus signed the Decree “On Digital Economy Development”,  aiming at significant simplification of business of residents of High Tech Park of the Republic of Belarus (HTP)and attracting leading foreign IT companies to the country.

The Decree provides new opportunities for HTP residents:

  • Special HTP regimeis extended until 2049,existing benefits remain – no profit tax, no VAT, 1% revenue deduction to HTP; new benefits are provided to facilitate business with foreign counterparties.
  • New fields of activities: blockchain, mining, ICO, autonomous vehicles, neural networks, artificial intelligence, cybersport, IoT, etc.
  • Rules for the use of tokens (cryptocurrencies) are established.
  • Mining and use of tokens (cryptocurrency) by individuals are not recognized as entrepreneurship.
  • Income from mining and operations with tokens (cryptocurrency) is tax exempt until January 1, 2023.
  • HTP residents' permitted operations include both sale of the code and monetization of the IT product (advertising, subscription, built-in purchases).
  • It is possible to make client transactions in any form including exchange ofelectronic messages, smart contracts.
  • The documents used in the accounting may be in English, no need to sign service acceptance certificates with the client.
  • Requirements established for foreign economic operations are not mandatory for HTP residents, there are no statutory deadlines for completion of such operations.
  • Opening accounts in foreign banks, as well as capital currency transactions (investments, loans) are carried out without permits of the National Bank.
  • Shares purchase agreements, shareholders agreements may be governed by foreign law, disputes arising out of such transactions can be submitted to foreign courts and arbitrations.
  • New legal concepts: option agreements, convertible loans, irrevocable powers of attorney, non-solicitation/non-compete agreements,  etc.
  • Incomes of individuals and foreign companies from sale of shares in HTP residents are not subject to taxation, provided that possession period is not less than 365 days.
  • Work permits are not required for foreign employees of HTP residents, visa-free entry, maximum term of temporary stay in Belarus is extended to 180 days, the procedure of granting temporary residence permits is simplified.
  • Secondary liability of shareholders and CEO in case of bankruptcy of the HTP resident arises only if bankruptcy is caused by a crime.