Everything you need to know about IT-Outsourcing in Belarus

Not many people know a lot about Belarus but the East European country is fast becoming a new IT outsourcing hotspot thanks to its rich seam of talented software developers. This blog fills you in on all of the practical information you need if considering working with Belarussian IT specialists as well as some more general insight into this fascinating country.

IT OutsourcingUPDATED ON November 26, 2021

Even if Belarus does not receive unconditional positive international attention, there is one very promising aspect at least for the economy – Belarus is a booming nearshore IT outsourcing destination. Like most of the countries in East Europe, Belarus’s traditional educational strength in mathematics and engineering has seen it churn out a large number of accomplished software developers in recent years.

Belarus recognises the economic potential of its rich seam of programmers and despite its complicated political landscape, the country has maintained a consistent policy designed to attract foreign investment in its tech sector. The legislation and tax system are also advantageous in making Belarusian IT specialists attractive to international companies.

In an extension of a successful joint venture with a partner company in Belarus over the past couple of years, K&C recently officially opened a new office in the country and we are actively recruiting on the market. And we’ve seen more than enough to be convinced Belarus will see its reputation as an IT outsourcing destination grow over coming years.

As an IT outsourcing service provider and software development company based in Munich, Germany, K&C provides customised software development teams and team augmentation for clients mainly located in the D-A-CH region and Western Europe. Understandably, potential clients often have many questions about working with software developers and other IT specialists based in our offices in Eastern Europe, including Minsk, Belarus.

There are also often questions about the logistics of working with remote nearshore software development teams:

  • How easy is it for them to visit us on-site occasionally or for us to travel to the team? Is the level of English among Belarusian IT specialists generally high or often problematic?
  • Can we recruit developers cheaper and faster than in our home market, and are they as good as the local alternatives?

For others considering a stronger commitment to Belarus and its market for IT specialists and building a local business unit, many questions arise about the country’s tax system, digital infrastructure and political climate.

In this article, we will address, in the form of FAQs, all the questions we are regularly asked by clients and potential clients who are considering IT outsourcing in Belarus or setting up a technical centre in the country. As a bonus, we’ve included some interesting trivia to help you impress your hosts once you travel to Belarus yourself or chat with people onsite from afar.

If you have additional questions to those covered here, please email us to let us know what you would like to add, or ask us directly

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Belarus – Geography and Population

Population

9.35 million

Land area

207,595 km²

Borders

Russia, Ukraine, Poland, Latvia & Lithuania

Time zone

The time zone Belarus is in is UTC+03:00, which is three hours later than Coordinated Universal Time (UTC), where countries such as the UK and Iceland are located. It is also two hours later than Central European Time, which includes countries such as France, Germany and Poland, and one hour later than East European Standard Time, which includes Bulgaria, Ukraine and Finland. Belarus, together with western Russia, is the only country in this time zone. Nevertheless, it is still close enough for Central and Eastern Europe to be able to coordinate working times well.

Belarusian cities by population

By far the largest city in Belarus is the capital Minsk, located in the centre of the country, with about 1.98 million inhabitants. The second-largest city is Homel (also called Gomel) with about 530,000 inhabitants, located near the Ukrainian-Russian border in the southeast of the country. The following cities are: Mahilyou also called Mogilyov (380 thousand), Hrodna or Grodno (370 thousand) and Vizebsk or Vitebsk (370 thousand).

Ethnic groups

84% Belarusian, 8% Russian, 3% Polish, 1% Ukrainian and 4% other.

Religion

73.3% Eastern Orthodox, 14.8% non-believer (atheist or indifferent), 9.7% Catholic, 1.5% other Christian and 0.7% other.

Politics

Belarus, where Alyaksandr Lukashenka has ruled since 1994, is probably the last dictatorship in Europe. Since the presidential election at the end of 2010, when Lukashenka confirmed his autocracy, the Belarusian police and secret service have violently cracked down on the pro-democracy opposition. This approach was repeated during major protests against the regime in the 2015 and 2020 presidential elections, making peaceful democratic change even more distant. For more information, check out the website of the Federal Agency for Civic Education.

What is the business climate like? – The reliability as well as availability of financial information varies widely, and the general business environment is also mediocre. Institutionally, the system has some weaknesses, which makes the environment unstable and sometimes inefficient, and transactions between companies risky. In addition, the collection of debts can sometimes be difficult.

Language

The official languages in Belarus are Belarusian (or Belarussian) and Russian. Although Belarusian became more important after independence in 1991, Russian dominates people’s public life, especially in the big cities. About 75% of Belarusians say they use Russian as their main language of communication, even if it is not their mother tongue. Only just under 12% state Belarusian as their main language of communication, which is mainly in the rural regions.

There is also an oral hybrid of the two languages called Trasyanka, which is used throughout the country. In addition, due to historical ties with Poland, Polish is spoken in a few parts of western Belarus.

Business travel from and to Belarus

The trend towards remote working in the IT and software industry has accelerated greatly, especially after the outbreak of the Covid 19 pandemic. As a result, many teams could only meet online, regardless of their location. It didn’t matter whether the teams usually came from the same city or were dispersed internationally. During the Corona period, remote work was a reality for everyone.

Under normal circumstances, regular physical team meetings were a necessary measure for many development teams. However, the last months have shown that, at least for a while, physical meetings are not always necessary for successful project implementation if strong frameworks for remote work are in place.

However, physical meetings are possible again with the Belarusian border open to travellers from most European countries and business relations can be refreshed in person. Belarus is quite convenient for particularly Europe-wide business due to the country’s location at its northeastern fringes, as well as its border with Poland.

How long does it take to travel to Belarus from major European cities?

Since Belarus adjusted the general visa regulations for most Western countries in 2017, it has become much easier for citizens of countries such as the UK or EU member states to enter and leave the country. However, although the number of flight connections to the capital Minsk has increased, they do not come close to the connections that other nearshore outsourcing hotspots in the region like Lviv or Kyiv in Ukraine can offer.

Many major cities such as Berlin, Amsterdam, Frankfurt or Vienna have direct flight connections to Minsk and allow travel times of 1:50 h to 2:30 h to the Belarusian capital. Nevertheless, for meetings that are not flexible in terms of time, flight changes can be necessary.

How much does it cost to travel to Belarus from the main European cities?

For Belarus, the easiest way to travel is definitely by plane. Of course, the cost of flying can vary greatly, especially if flights with connections and stopovers have to be used. For example, the cost of a return ticket booked 2 to 4 weeks in advance can cost between €300 and €600.

As an EU, EEA or UK citizen, do I need a visa to enter Belarus?

Belarus has long been a blank spot in Eastern Europe for many Europeans, which is a shame. However, this has changed somewhat since around February 2017. Among other things, this is because Belarus has lifted the previous visa requirement for 80 countries, including the United Kingdom, Germany, France and many other mainly Western countries.

Following these changes, citizens of EU countries as well as Switzerland, Norway, Great Britain, Iceland and Liechtenstein, among others, benefit from visa-free stays of a maximum of 30 days, provided that they enter via the international airport in Minsk (Minsk International Airport).

Can Belarusian IT professionals travel to EU countries, the UK, Switzerland or Norway?

Belarusian citizens cannot travel to EU countries, the UK, Switzerland, Norway or Iceland without a visa. Belarusian developers and IT professionals have to apply for national visas before they can make site visits to clients in West Europe.

As a rule, the visas to be applied for and the associated visa requirements differ depending on the motive and length of stay of the Belarusian IT professionals. The visa that is sufficient for entry to all of the above-mentioned countries is the well-known Schengen visa, which allows Belarusians to enter all states of the Schengen area for up to 90 days over a period of 180 days.

However, visa requirements for stays at the national level may differ. For example, the Polish government supports Belarusian IT professionals with visas for the possibility to work in Poland through the “Business Harbor” programme. Ukraine and Lithuania have also introduced simplified visa requirements for IT professionals from Belarus.

The digital economy in Belarus – FAQ

The Belarusian IT and software industry is on the rise. The Belarusian capital Minsk, which was once the centre of the IT industry in the Soviet Union, is proving its potential as a modern IT and software sector hub. Mathematics and IT have a long tradition in East Europe, including in Belarus, which has a comparatively good education system, especially in the technical fields, despite the poor economic and political situation.

In 2016, for example, the IT and software companies based in the Hi-Tech Park initiated a project in cooperation with the Ministry of Education to teach the programming language Scratch to primary school students in second to sixth grade. Today, thousands Belarusian pupils learn this programming language in schools, so young Belarusians come into contact with software development and information technology at an early age.

Are there enough IT specialists in Belarus?

Belarus has good foundations for the continued growth of a vibrant IT labour market. So it is not surprising that the state universities, which in the Soviet era were supposed to promote the arms race, today train numerous programmers who are on average not at all inferior in quality to their Western peers. Universities such as the Belarusian National Technical University (BNTU) or the Belarusian State University of Informatics and Radioelectronics (BSUIR) train numerous highly qualified software developers and IT specialists every year.

Belarus is one of the most concentrated talent pools for software developers in the region of Central and Eastern Europe. With about 70,000 developers among 9.5 million inhabitants, Belarus has an even higher rate of software developers per capita than the hugely popular IT outsourcing destination Ukraine, which has about 220,000 developers from a population of 41.8 million inhabitants.

Source: Statista

How good are Belarusian IT professionals?

The Belarusian education system and its universities are comparatively good. Belarus finally joined the “Bologna Process – the European Higher Education Area”, which is supposed to make the level of education at universities comparable across Europe. So the general level of education seems to be OK.

But can the software developers and IT specialists really keep up with those from Germany, Poland or the USA? – As a rule, yes, Belarusian programmers have a relatively good reputation within the IT scene. Even though they are not even listed in some programming rankings, those where they are listed, such as in the TopCoder ranking, often place them in the top 10, ahead of Poland and Switzerland.

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IT infrastructure: How is the internet in Belarus?

Digital infrastructure is an important component of the digital economy, which is largely dependent on it. Belarus does not have the infrastructure one is used to in developed economies, so the country-wide internet is also below average in European comparison. However, internet speeds in Minsk are good. Broadbandspeedchecker.co.uk estimates the average download speed in Minsk at 25.63 MB/s and upload speed at 26.4 MS/s.

Because the IT industry is mainly based in Minsk, the country’s average internet is irrelevant. The government has launched a pilot project aimed at the successful development of tech companies. The Hi-Tech Park, established in 2005, convinces with good IT infrastructure, lower taxes as well as legal privileges and is supposed to support the development of local tech companies in the IT and software industry.

Doing business in Belarus: Salaries, overheads and taxes in Belarus – FAQ

Belarus is considered the last dictatorship in Europe. Nevertheless, in recent years there have been some relaxations that mean international organisations can do business with companies in Belarus, as well as tap into the country’s IT and software development talent.

The number of IT graduates is steadily increasing, partly because a career in IT is one of the few alternatives to working for the state for young Belarusians. Indeed, the presence of international IT and software companies on the Belarus market means young IT talents can earn salaries of at least three times higher than most other jobs available to them, with additional compensation for inflation.

The IT and software market is regulated somewhat differently than many other markets in Belarus. It seems that the state is not yet sure how to treat the market and its IT companies. Nevertheless, the strategy of doing nothing seems to be a good one for now. Not only foreign companies like K&C, which recently opened an IT ousourcing office in Minsk, are benefiting from the “free market economy on trial”, but local companies are also enjoying their first international successes.

For example, the company “Viaden Media”, which was founded in Minsk and is still managed from Minsk, is an independent company that specialises in the development of apps. For example, Viaden Media has programmed a third of the top 50 most successful fitness apps in the German App Store. And sold more than 2.5 million apps in total. Although such companies often take the opportunity to relocate abroad, Viaden Media decided to stay in Minsk to take advantage of the highly skilled and very affordable IT staff.

Below are some frequently asked questions about taxes, salaries and overhead costs in Belarus.

Salaries in Belarus: What are the salaries for IT professionals in Belarus?

The demand for software developers and IT experts is huge everywhere. However, Western Europe in particular seems to be suffering a major IT skills shortage. In Germany alone, for example, there are tens of thousands of vacant IT positions, which makes it necessary for some companies to outsource IT tasks. Belarus is not necessarily the first country that comes to mind due to political and economic tensions. Nevertheless, the potential is great. The developers are highly qualified, the skilled labour market is comparatively acceptable, and wages are still relatively low.

Due to the hardship caused by the Covid-19 in most European countries, the openness of many entrepreneurs to hire remote workers from abroad increased. This has inevitably led to software developers becoming more comparable across the world, with developers at the lower end of the salary range benefiting most.

Belarusian software developers and IT professionals have also benefited, but not as much as many other developers from other Eastern European countries such as Poland or Ukraine. This is because, due to the political uncertainty in the country, Belarusian companies are less trusted than comparable companies from Ukraine or EU countries.

However, these concerns are generally unfounded and should not be applied to the entire IT sector in the country. For example, companies such as ours have opened an office in Minsk with great success.

Belarusian software developers earn between 20-50% less than comparable developers from Germany, England, or France. How high the savings are depends on the technology stack as well as a developer’s professional experience. For example, the difference between comparable senior software developers is not as high as the difference between two mid- or junior-level developers.

Wages are also increasing very rapidly in the IT and software industry in Belarus. Nevertheless, a saving of about 30% of the absolute development costs is quite realistic. This makes a huge difference in the budget of large corporate projects. Even in small development projects, this can have a positive impact. Due to the high motivation of Belarusian developers to work for foreign companies and to receive wages many times higher than those usually paid in Belarus, this leads to an enormous incentive, which in turn has a further positive effect on the implementation of the software project.

Recruitment in Belarus: How difficult / easy is it to recruit IT professionals in Belarus?

The recruitment process and average time it takes to recruit specialists is often important to software development projects. Glassdoor’s 2015 recruitment survey states that it takes approximately 35 days to hire a software developer. A similar prediction is also published by other organisations and may have been correct in 2015.

In 2021, the situation is different and 35 days is too optimistic for an average hiring cycle. IT professionals are in short supply, and notice periods of several weeks to two to three months are not uncommon either.

Companies that need to implement IT projects to a tight schedule should therefore start recruiting suitable IT professionals early. IT outsourcing companies can usually shorten the recruitment process by quite a bit. If they have suitable developers on hold, the positions can often be filled within one to two weeks.

Income tax in Belarus: How much net remains of gross salaries in Belarus?

It is worth mentioning that tax regulations change relatively often in Belarus. The local government reviews the laws and implements changes in tax policy if necessary. This does not mean that the percentage tax rate changes every year, but rather that strategic consideration is given to tax relief in certain areas to support economic growth. For example, income tax for non-residents in Belarus could be lowered to encourage foreign investment.

However, the current income tax is the same for non-residents and resident employees in Belarus. This also applies to all income brackets. Thus, the levies for “low and high earners” remain the same in percentage terms. Currently, the income tax rate is 13%, with no further levies on the employee.

The following example calculation shows what this means for an income of about 140,000 BYN which equals about 49,600 € on the day of the blog article (inflation can be quite strong, so the euro amount can vary a lot). As you can see, Belarusian high earners are already not affected by extra tax rates, which is what one is used to in many Western European countries. Accordingly, Belarusian software developers have a comparatively much higher net income than workers with the same gross income in Germany, Poland or Ukraine.

Belarusians still have a full 87% of the gross income, i.e. about 121,800 BYN (~43,200 €). For comparison, in Ukraine it would be just under 40,000 €, in Poland about 34,000 € and in Germany only 30,300 €.

What is the corporate income tax in Belarus?

The standard rate of corporate income tax in Belarus is 18%. However, you only have to worry about it if you earn income in the country or directly account for it from a Belarusian legal entity. If you outsource IT functions to Belarus, you may only have expenses in the country or no taxable profit. It should be added, however, that corporate income tax may differ for different industries. For example, the corporate tax rate for banks and insurance companies is 25%, and due to the Covid-19 situation, the corporate tax rate for mobile operators and microcredit providers has been set at 30%.

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Trivia – A handful of facts about Belarus

Now that we have answered the most frequently asked questions about IT outsourcing in Belarus, here are some interesting facts about Belarus. You can use them to impress your work colleagues during one of your next coffee breaks, at a shared after-work beer or, of course, over a glass of vodka.

Nobel laureate from Belarus

Simon Kuznets was the first Belarusian to win a Nobel Prize. He received the Nobel Prize in Economics in 1971. There are a total of five Nobel Prize winners from the country, including Simon Kuznets, Svetlana Alexievich, Zhores Ivanovich Alferov, Shimon Peres and Menachem Begin.

Nature in Belarus

Belarus is a rare European country where untouched wilderness still makes up a large part of its 207,600 km² total area. . About 40% of the country is forested, which is reflected by the green stripe in the official Belarusian flag. In addition, Belarus is home to the largest and oldest forest in Europe – the Białowieża Forest. The Białowieża Forest is also home to around 800 European bison, the heaviest land animals in Europe.

Belarus’ Two Flags – Political Controversy

Belarus’s official national flag is red and green with a red and white strip to the left.

However, if you visit Minsk the chances are you will see another flag much more prominently displayed around the city – one that is white with a thick red strip through its middle.

 

Why are Belarusians not united on their flag? The Guardian newspaper explains:

“The red-green flag, which has an embroidered pattern along one side, was introduced in 1951, when Belarus won a seat at the UN despite still being part of the Soviet Union. “Red was the colour of revolution and green was for nature and life. They picked a folk ornament because the Soviets saw Belarus as a nation of peasants,” said the Belarusian historian Aliaksandr Bystryk.”

“The red-white flag has a longer history, introduced as the flag of the short-lived Belarusian National Republic in 1918. When Belarus won independence from the Soviet Union in 1991, it was readopted, but shortly after Lukashenko came to power in 1994, he held a referendum on returning to the old, Soviet flag in a slightly modified form, without hammer and sickle.”

The official flag is widely seen as the symbol of Lukashenko and the state and the red and white alternative, positioned as the Belarussian people’s flag, adopted by those who would like to see political change.

Eastern Europe’s Las Vegas

Belarus has a lot of casinos. Since casinos were banned pretty much everywhere in Russia in 2009, many casinos have been opened in Belarus. This is one of the reasons why so many Russians come to Belarus.

However, becoming a millionaire in Belarus is not necessarily difficult, even without risking the family home at a roulette table. Due to the strong inflation, exchange rates of over 30,000 BYR to one euro are possible. In the meantime, the “new” Belarusian rouble BYN has been introduced, which makes it easier to convert. However, high inflation rates still occur, which is why many items, including the salaries of IT specialists, are denominated  in USD.

The world’s heaviest dump truck comes from Belarus!

The BelAZ-75710 large dump truck manufactured by the Belarusian company BelAZ is the heaviest series-produced dump truck in the world, with a payload of 450 t and a total mass of 810 t. The dump truck, which was introduced in 2013, is still manufactured by the vehicle manufacturer BelAZ, which has its headquarters in Schodsina, Belarus. With over 10,000 employees and customers worldwide, the company is an important source of income for Lukashenka’s regime. Due to its strong ties to the Belarusian ruler, the company has been sanctioned by the EU since June 2021. Switzerland and Canada have also listed the company among the sanctioned companies.

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