In December 2017, President Lukashenko signed a decree, which came into force three months later. According to some reports, Lukashenko allegedly said: “If it benefits us, it’s a plus. If not, I know who to blame.”
The decree marked a turning point in the evolution of the tech sector of the former Soviet republic with its 9.4 million citizens. It had an impact even before it was signed, says Dmitry Titov, the press secretary of the Belarusian high-tech park based in the capital of Minsk.
“Serious players began coming into the country and became interested in our preferential terms: from Uber to General Electric,” he says.
There are 36 types of tech activities listed in the decree for which taxation is waved. “Until 2049, there’s zero percent VAT, zero percent corporate profit tax, customs duty, offshore duty, income tax for foreign entities, tax on sales of shares of high-tech park residents, and zero tax on revenues of foreign companies,” Titov says.
“Yes, that’s right. All these are zero. President Lukashenko supported the most daring ideas of our IT specialists.”
The decree also legalized initial coin offerings and granted tax-free status to all token-issuance, digital currency trading, and mining enterprises until 2023.
Helped by this law, the Belarusian tech sector has flourished, Titov says. In 2018, over 260 companies entered the tech park, more than in its entire 12-year history. The high-tech park’s software exports also soared. They accounted for $1.4bn in 2018, up 38 percent from the previous year.
The park attracted a variety of companies and startups last year, from blockchain-based businesses, to those operating in the field of machine learning, telecommunications, space, robotics, and information security. Belarusian devs are working for European and CIS clients, as well as for businesses in the US, Israel, and South Korea.
One of the main changes the decree brought is to grant foreign employees six-month visa-free entry into Belarus, which people like the London-based CEO of Currency.com and Capital.com, Ivan Gowan, find helpful. Gowan has traveled to Minsk on more than 10 occasions to do business, but also to enjoy a good old beetroot borscht.
“There have been lots of steps taken to make [Belarus] a more favorable place to do business for tech companies,” Gowan says. The country ranks 37 among 190 economies in the latest ease of doing business report published by the World Bank.
Setting up a startup in Minsk can be a viable option, as hiring techies there is cheaper than in London or Berlin. The median pay for a software developer in Minsk is about $26,500 per year, according to PayScale.