Creating your own IT company is an exciting and promising path for entrepreneurs who want to thrive in the field of high technology. The IT industry’s rapid development in Belarus makes opening a business in this area increasingly attractive.
Belarusian legislation does not provide a separate way to open IT companies, IT companies are registered by the state, like all other companies. However, there are still some features of preparing documents for the registration of an IT company. Therefore, we recommend contacting professionals with the competence and experience of opening IT companies from scratch. Our lawyers will promptly and efficiently prepare the documents necessary for opening a company and consult on all issues that arise. You will be able to run your business without problems.
Founders of an IT company
The company’s founders are those who are “at the origins” of the company, decided to create a company, and opened it.
The founders of an IT company can be:
- Individuals (one or more).
- Individuals (person) and company (companies). Foreign citizens can establish a company, as well as citizens of Belarus and stateless persons.
- Only one company or several companies. The founders of the company can be both Belarusian and foreign companies.
Number of founders
For some companies, the total number of founders is limited to no more than 50. It applies to limited liability companies and additional liability companies.
The number of shareholders (these are the founders of joint-stock companies) is unlimited.
The minimum number of founders is one person (individual) or a company.
Questions about the legal address
The legal address of the company is the address that is prescribed in the documents required for the state registration of the company. Before submitting documents for registration, you need to determine the legal address.
Questions about the legal entity
Before registering an IT company, you must decide on the organizational and legal form. In other words, choose the type of legal entity.
IT companies are often created in the form of limited liability companies (LLC) in Belarus,. In this case, the company may have one or more founders. Such a company cannot issue shares, and its authorized capital is divided into shares. It is pretty simple to withdraw from the membership of the LLC – upon application for withdrawal.
Joint-stock companies are less popular. These are companies with authorized capital divided into shares. Such companies exist as JSC – an open joint stock company, and CJSC – a closed joint stock company.
What names are appropriate for an IT company
Before registering a company in Belarus, you need to coordinate its name with a government agency. There is a limitation: You cannot choose a name already assigned to another Belarus company. The name will need to be specified in two languages: Belarusian and Russian.
The agreed name will be reserved for you for 1 month.
What to pay attention to when developing the charter
The charter is the founding document of an IT company, which the founders or the founder approves. The requirements for information that should be in the charter are fixed in the legislation.
When developing the charter, we recommend paying attention to some points:
- It is possible to determine in the articles of association which transactions relate to large ones, which means that they require a decision of the general meeting of participants (in LLC) before their conclusion. Transactions that are not large can be concluded by the director.
- The charter may divide the competence to conclude transactions in the field of intellectual property, especially those related to an exclusive license. For example, you can specify that such transactions are made by decision of the general meeting of participants (in an LLC or JSC) or the owner, his representative, when the company has one founder.
Tax regime for IT companies in Belarus
The tax regime for IT companies that are not residents of the Hi-Tech Park is the same as for other Belarusian companies. Companies pay income taxes, payroll taxes, and property taxes.
For IT companies non-HTP residents, a simplified taxation system (STS) is available, provided that the number of employees does not exceed 50 people. To use the STS, you must submit a notification to the tax service about the use of the STS within 20 days from the date of registration of the company. The tax rate for the STS is 6%.
Tax benefits for HTP resident companies are discussed below.
The norms of the size of the authorized capital of the new company
The minimum size of the authorized capital for an LLC is not set. It is determined in the charter by the founders. For a CJSC, the minimum official capital is 100 basic units, which is 4,000 Belarusian rubles or about 1,200 US dollars or 1,140 euros.
The authorized capital must be registered in Belarusian rubles. It is necessary to form a fully licensed capital not immediately before the registration of the company but within 12 months from the date of state registration of the company. The founders may decide otherwise and form the authorized capital in full by the time of registration or up to 12 months.
A loan as a way to finance an IT company
When attracting loans from investors, it is necessary to consider the timing of the formation of the authorized capital and the need for state registration of its reduction if the loan was attracted to form the authorized capital.
Is it worth joining HTP – pros and cons
The main advantage of joining HTP is tax benefits. Benefits are usually applied only for activities that companies conduct as HTP residents.
Some tax benefits have been established for HTP resident IT companies:
- Income tax exemption and income tax rate of 9% for a number of incomes. The generally established income tax rate for non-HTP residents is 20%.
- VAT exemption on sales in Belarus and several transactions with non-residents of Belarus. The generally established VAT rate is 20%.
- Income tax is 0% and 5% on income paid to foreign founders-companies.
- Exemption from payment of offshore fees for a number of transactions.
- Income tax of 9% on the income of individuals – founders of HTP resident companies, including foreign citizens. The rates can be 6% and 0% – depending on how often the founders distributed the profit.
- Exemption from real estate tax for those objects that are located on the territory of the HTP and are not rented out.
The specifics of the application of these benefits can be found in consultation with our accountants, specialists in the taxation of IT companies. - Advantages in attracting foreign workers: you do not need to obtain permits from government agencies to attract foreign employees.
The restrictions on joining the HTP include:
- It is impossible to conduct activities that are not conditioned by residence in the HTP.
- When selling used real estate and other non-new property, you need to pay income tax at a rate of 20%.
- It is also necessary to conclude an agreement with the HTP administration on the terms of operation and pay 1% of revenue (income) quarterly.
- HTP residents cannot apply for the STS.
- Reduced tax rates for the payment of dividends are 6% and 0% if profits have not been distributed among Belarusian participants for 3 and 5 years, respectively.
- Tax benefits do not eliminate the need to file tax returns with the tax inspectorate.
What to do after registering an IT company
Registration of a legal entity is only the first step in the process. The next step should be establishing a relationship with the client, forming an employee team and creating an intelligent product. From the very beginning, it is very important to pay attention to the protection of intellectual property and the legal protection of their rights. Unfortunately, in most cases, companies begin to deal with these issues only after a controversial situation arises.
However, there is no need to establish these processes independently. You can contact our company, and we will arrange business processes for you, related to:
- Taxes and interaction with the tax inspectorate.
- The hiring of employees and the involvement of contractors.
- Attracting customers and interacting with them, as well as organizing sales.
- The purchase of equipment.
- The protection of intellectual property and the registration of contractual relations.
- Foreign economic transactions and interaction with customs.
- Advertising and customer service.
Employment relations with employees in IT companies
To involve individual entrepreneurs as employees can be risky. It may lead to problems with tax and other regulatory authorities.
It is possible to conclude employment contracts and civil law contracts with employees for the provision of services and the performance of work. Under such agreements, taxes on payments are withheld and paid to the budget by the IT company. Income tax is 13%, and 1% is a contribution to pension insurance.
The provisions of the non-competition agreement are provided by Belarus legislation for HTP residents and their employees. An IT company that is a resident of HTP has the opportunity to conclude such an agreement with an employee. The essence of this agreement is that the employee undertakes not to enter into contracts with competing companies and not to carry out competitive activities to his employer. The agreement prescribes compensation for the acceptance of such obligations and also sets the term of its validity.
How to contact us
For more information or advice on starting an IT company from scratch in Belarus, do not hesitate to contact us. We are here to help and support you.
For your convenience, phone and e-mail communication options are available:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@spex.by.
