Strong governmental support and highly qualified human resources have made Belarus very attractive for outsourcing software production.
Over the past ten years, Belarus software export is growing about 20% per year. Particularly in 2015, according to national statistic data, the total export of Belarusian software products and services amounted $818.3 million (+18.5% to previous year result).
Actually, some analysts estimate the real export income of Belarusian IT sector at least twice more – at about $2 billion per year. The most software companies of the republic established offices abroad and accumulate revenues there, in Europe, North America, etc. So the national statistic data and real company income are pretty different. Anyway, Belarus became a major regional software provider and has the highest software production per capita compared with other countries of the former Soviet Union. This is an objective fact.
What’s in the base?
Since the days of the Soviet Union, Belarus became the centre of radio- and microelectronics production which initially was adapted for military purposes. The sector was provided with the best finance, technologies, materials and of course with the best skilled human resources. Being founded in 1964 Minsk Radio Engineering Institute (MREI) became the reliable supplier of frames for IT industry.
The Soviet Union collapsed in the early 90s of the 20th century and the army lost the role of the main software consumer, but the Belarusian IT sector continued to develop, replacing the product line and markets.
MREI adjusted the specialization of educational programs and change the name to Belarusian State University of Informatics and Radioelectronics (BSUIR). In addition, several more Belarusian universities have organized training of programmers. Many software companies opened the training centres and cooperated in educational process with the world leaders such as IBM, SAP, Oracle, Microsoft, etc.
Nowadays, the Belarusian IT sector has more than 30 thousand highly trained programmers which involved in software development, website and apps creation, information systems implementation and support, IT consulting and audit.
IT education evolution is still in progress in Belarus. Year by year the specialized centres, colleges and universities expand the range of applicants for programmers training. So the total number of skilled programmers in republic annually increases for about 3-4 thousand people. This creates the basis for further growth in the IT sector.
Plenty of benefits
Since 2005, the software industry received strong governmental support and became one of the top-priority economic sectors to develop. The Hi-Tech Park (HTP) was set up by the special Law in Minsk. HTP resident-companies got significant tax benefits. In particular, they are exempt from corporate taxes, including VAT, profit, real estate and land taxes. There are benefits for corporate payments in pension insurance. Individual income tax for HTP companies employees has reduced a rate of 9% (for other employees in Belarus this tax has the rate of 13%).
Encouraged by tax-incentives and high-qualified workforce over 150 companies have become residences of HTP. By the way, 35% of HTP residences are enterprises with 100% foreign investments, 24% are joint ventures. The fact shows the confidence of foreign investors to Hi-Tech Park.
HTP residences got a success in a worldwide selling. 91.5% of their software sold for export, including to the European countries (46.7%), the United States and Canada (40.2%), Russia and CIS countries (10.7%). Many companies specialize as engineering outsourcing services providers.
The labour cost of Belarusian programmers is still lower than their counterparts in Western Europe and America have. So, relatively inexpensive labour force coupled with tax incentives help to achieve low net cost in the production of software in Belarus. Placing orders in Belarus, customers and investors receive a high-quality product at a price much lower than in other regions of the world, for example, in Western Europe or the US.
Doing business in Belarusian IT sector companies-contractors get a chance to generate additional revenue and improve their competitiveness in the global software market.