The High Technology Park (HTP) of Belarus is one of the key elements of state support for the IT sector. Due to a special legal regime, HTP residents receive significant tax benefits, a simplified procedure for currency transactions and a number of other advantages that allow them to successfully run business in the high-tech sector. However, for a number of reasons, a company may decide to withdraw from HTP residency.
The reasons for withdrawal can be very different: change of business strategy, expansion of activities outside the IT sphere, the need to work in a different tax regime or even reorganization of the company. In some cases, withdrawal from the HTP may be initiated by the Hi-Tech Park itself, for example, in case of non-compliance with the residency requirements or violation of the established rules.
The procedure of withdrawal from the HTP requires compliance with a number of formalities. The company needs to properly execute documents, take into account tax consequences and foresee the possible impact of the withdrawal on current contractual relations. An unprepared exit may lead to legal risks, financial losses and additional obligations to state authorities.
In this article we will analyze in detail the process of withdrawal from the HTP, look into the legal aspects, necessary documents, stages of the procedure and possible consequences for the business. We will also provide recommendations on risks minimizing and making the process of withdrawal as convenient and safe for the company as possible.
Exit and exclusion of a company from the HTP
A company may withdraw from the HTP residents either on the company’s own initiative or by decision of the Hi-Tech Park. In both cases, it is necessary to follow the established procedure and take into account possible consequences for the business.
Withdrawal from the HTP on the company’s initiative
HTP resident has the right to voluntarily withdraw from the status if its further activities do not meet the conditions and requirements of the Park or if the company has changed its strategic priorities.
The main stages of withdrawal from HTP on the company’s initiative:
Stage 1. Decision on withdrawal.
The company’s management makes an internal decision on withdrawal, draws up the relevant minutes of the general meeting of participants or an order.
Step 2: Preparation of the notification.
An application to the HTP Supervisory Board Secretariat is prepared in accordance with the established procedure. The statement should include the reasons for withdrawal, as well as information on the company’s compliance with all its obligations to HTP and governmental authorities.
Stage 3: Submission of the application and documents.
The company sends a package of documents to the HTP Secretariat, including financial statements and confirmation of fulfillment of obligations under contracts.
Stage 4. Consideration of the application and decision-making.
The HTP Supervisory Board reviews the application and makes a decision on termination of the resident status.
Stage 5.Formalization of the withdrawal.
In case of a positive decision, an order is issued to terminate residency, and information about it is published in official sources.
Stage 6. Informing state authorities
At this stage, the HTP:
makes an entry in the HTP register of residents about the loss of resident status.
Within three days, the HTP sends information about the loss of the HTP resident status to the statistical authorities, the Social Security Fund, and the tax inspectorate at the place of registration of the company or individual entrepreneur.
Step 7. Termination of contractual relations with HTP
Termination of the HTP resident contract and the former HTP resident submits the HTP resident registration certificate to the HTP Secretariat within 5 days.
Exclusion of a company from the HTP at the initiative of the HTP
The HTP Supervisory Board has the right to make a decision to exclude a company from the HTP in case of violation of the established requirements.
Grounds for exclusion:
Non-compliance of the company’s activities with the declared types of activities specified in the business project and the agreement with HTP.
Failure to comply with the terms of the agreement concluded with HTP, refusal to amend the agreement, failure to comply with the HTP Regulations.
Failure to implement the business project on the basis of which the resident entered the HTP when the HTP Supervisory Board has decided that further implementation of the business project and the resident’s activities in the HTP is inexpedient.
Failure to comply with HTP recommendations given to an HTP resident based on the results of an audit regarding the prevention of money laundering, the financing of terrorist activities and the financing of proliferation of weapons of mass destruction.
Receipt of proceeds from activities that are not related to the types of activities authorized for HTP residents.
Exclusion Procedure:
1. Identification of non-compliances and notification to the company.
Upon the identification of non-compliances, the HTP Secretariat sends a notification to the resident with a proposal to eliminate the identified violations.
2. Clarification of the position by the company.
HTP resident may provide explanations or evidence that the violations have been corrected.
3. Consideration of the issue by the HTP Supervisory Board.
If the violations are not eliminated, the issue of exclusion is brought to a meeting of the Supervisory Board.
4. Adoption of the decision and formalization of the exclusion.
If the violations are confirmed, the resident is excluded from the number of HTP residents (deprived of HTP resident status) by decision of the HTP Supervisory Board.
5. Notification of deprivation of HTP resident status. After the Supervisory Board makes a decision on deprivation of HTP resident status, the company or individual entrepreneur is informed about it in writing within three days. The HTP also sends this information to the state statistics bodies, the Social Protection Fund of the Ministry of Labor and Social Protection, and the tax inspectorate at the place of registration of the HTP resident. The grounds for the decision are indicated in the message.
The record about deprivation of the HTP resident of this status is entered into the HTP resident register and the agreement on the conditions of HTP resident activity is terminated.
6. Termination of contractual relations with the HTPThe agreement on the conditions of HTP resident activity is terminated and the former HTP resident submits the HTP resident registration certificate to the HTP Secretariat within 5 days.
Consequences of withdrawal or exclusion from the HTP
Upon withdrawal or exclusion from the HTP, the company loses the right to HTP tax exemptions and preferences, which may lead to an increased tax burden. The following points should be considered in advance:
1. Revision of the company’s tax regime and the need to pay taxes according to the general procedure.
2. Re-registration of the legal address if the company used the HTP infrastructure.
3. Impact on existing contracts where the terms of cooperation may have been based on HTP resident status.
Recommendations for minimizing risks in case of voluntary withdrawal from HTP
Withdrawal from HTP is a multi-step process that requires careful preparation and a balanced approach. Any mistakes made during this process may lead to significant financial, tax and legal consequences. To minimize risks, companies are advised to assess all possible consequences of the exit in advance and take appropriate measures.
Step 1: Conduct a comprehensive legal and accounting audit
Before exiting the HTP, it is recommended to conduct a detailed analysis of the legal and financial aspects of the company. As part of the audit, you should:
Verify the compliance of financial statements with legal requirements and HTP regulations.
Evaluate the existence of liabilities to state authorities, counterparties and employees.
Find out whether a change of the company’s legal address is required after leaving the HTP.
Check for possible claims from tax and other regulatory authorities.
Step 2: Analyze the tax consequences and consult with relevant specialists
Withdrawal from the HTP entails the loss of tax benefits, so it is important for the company to calculate in advance how the tax burden will change. In order to do this, it’s necessary to:
Determine what taxes and to what extent will have to be paid after leaving the HTP regime.
Analyze possible ways to optimize the tax burden (for example, choosing a new taxation system).
Step 3: Develop a strategy for the company’s further work
If the company plans to continue its activities in the IT sphere, it is necessary to work out a plan of work in the new conditions in advance. It is important to:
Determine how the change in tax regime will affect pricing and business model.
Consider moving to other special economic zones or business incubators.
Analyze whether changes need to be made to business processes, ownership structure or internal reporting.
Evaluate the prospects of working with foreign partners in the context of losing the HTP resident status.
Step 4: Engage with partners, customers and employees
Exiting the HTP may affect the company’s relationships with customers, investors and employees. It is important to:
Notify key partners of an impending change in status in advance, especially if it affects the terms of existing contracts.
Analyze whether existing contracts will remain valid after exiting the HTP or whether they will need to be renegotiated.
Ensure transparent communication with employees, explaining how the changes will affect their working conditions if the company loses tax and social contribution benefits.
Prepare legally sound explanations for customers and investors to maintain the company’s credibility.
Amend employment contracts with company employees if non-competition clauses applied.
Consider the need to obtain work visas for foreign employees if they used the visa-free regime for HTP resident companies.
Step 5: Follow all procedures and deadlines
The process of withdrawing from HTP requires strict adherence to all established procedures. It is necessary to:
File the withdrawal application correctly and submit it within the established deadline.
Prepare a complete package of documents, including financial statements and proof of fulfillment of all obligations to HTP.
Keep track of the application deadlines and, if necessary, communicate with the HTP Secretariat.
Obtain official confirmation of withdrawal from HTP and record changes in the company’s documents.
Step 6: Evaluate possible alternatives before final withdrawal
In some cases, withdrawal from HTP is not the only possible solution. Before initiating the exit process, the company should consider alternatives:
Changing the organizational structure, such as splitting operations between several legal entities.
Continuing to operate in the HTP while adjusting the business model to meet residency requirements.
Relocating part of the activities to other jurisdictions or economic zones with special conditions.
Conclusion
Exiting the High Technology Park is a serious strategic decision that may significantly affect the company’s further development. Regardless of whether the exit is initiated by the company itself or is made by the decision of the HTP Supervisory Board, this process requires thorough preparation, careful compliance with all legal procedures and consideration of possible consequences.
A company that decides to exit needs to assess changes in its tax burden, revise its business strategy and prepare all necessary documents in advance. It is also important to analyze the impact of the exit on relations with customers, partners and employees, and, if necessary, adjust contractual obligations.
Compliance with all stages of the exit procedure, competent planning and legal support will help minimize risks and adapt to new business conditions. If the company is not sure about the expediency of exit, it is worth considering possible alternatives, including changing the business model or searching for other forms of state support.
Thus, the process of withdrawal from the HTP should not be perceived as a simple administrative step. It is an important stage in business development that requires a responsible approach and balanced decisions. Companies that have gone through this process with proper preparation will be able to maintain the sustainability of their business and successfully adapt to new market conditions.
How to contact us
For more information or consultation on matters related to HTP withdrawal, do not hesitate to contact us. We are here to help and support you.
Phone and email communication options are available for your convenience:
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