Decree 'On Digitalization of the Economy'. Belarus among the first countries to legalize cryptocurrencies and blockchain projects
On December 21, 2017 President Alexander Lukashenko signed into law the new Decree 'On Digitalization of the Economy' that sets out numerous regulatory breakthroughs and will allow cryptocurrency-related companies to operate in the Belarusian High-Tech Park, a privileged regime zone for IT-companies.
The Decree lays down foundations for transforming the soviet heavy machinery driven economy into a modern digital and decentralized one, and is expected to give a positive boost to the industry in the country where each school kid’s dream is to become a software developer.
High-Tech Park, or HTP, is a kind of privileged regime provided by the Republic of Belarus to companies conducting their business in IT sphere. The Park was founded in 2005. It is aimed at increasing the competitive capacity of the national economy through developing the information and communication technology (ICT). Decree No.8 'On digital economy development' (Decree No.8) dated 21.12.2017 has extended the duration of the Park's special legal regime till January 1, 2049.
The Belarusian Park's main feature (as compared to most similar foreign high-tech parks) is its principle of exterritoriality. That is, any legal entity meeting HTP requirements may become an HTP resident and make use of the respective benefits, re- gardless of its location in Belarus.
192 companies are registered in HTP as of January 1, 2018: 2 companies from Brest, 2 from Mogilev, 3 from Gomel, 3 from Grodno, but the vast majority of the companies (181 resident) are located in Minsk.
6 HTP resident companies, according to IAOP, are among 100 best outsourcing companies worldwide — The Global Outsourcing 100®.
Companies from 67 countries around the globe are HTP's cus- tomers: 91% of software pro- duced by HTP will be exported — 43.2% to the USA, 49.1% — to Western Europe, and 5.3% — to Russia and CIS.
New opportunities for companies
— Implementation of standard legal institutes for M&A and attracting investment, non- competition.
— Legalisation of activities related to blockchain and cryptocurrency, including mining. Tax holidays till 2023.
— New business units: crypto-exchangers, crypto- exchanges, ICO operators.
— High-tech companies engaged in a wide variety of activities may join the HTP.
— HTP offers one of the most attractive tax regimes in the world.
— No requirements for paper document flow, currency control and external economic activity.
— Simplified migration rules.
Cryptocurrency and blockchain regulation
Belarus is one of the first countries to have to legislated the legal framework for cryptocurrencies, ICOs and blockchain projects. The next activities have become possible:
— Attracting investment through ICO — 'autonomous' and 'turn-key' ICO models are possible
— Mining — natural persons and HTP residents may do mining, which is not subject to taxation. According to the Decree, mining by natural persons, acquisition, or alienation without engaging other natural persons under labour/civil agreements, is not 'entrepreneurial activity'.
— Earning on buying/selling cryptos — both natural and legal persons have the opportunity to profit from buying/selling tokens. Natural persons are not liable for any taxes; Legal entities pay no taxes until they have transformed assets into fiat money; HTP resident are not liable for any taxes.
— Crypto-exchange / crypto-exchanger — activities of crypto-platform operator, crypto-exchange operator, or other activities with use of tokens become legal and are not deemed 'bank activities'
— Crypto-fund — Now there is an opportunity to make investments in cryptocurrencies (to buy and sell tokens).
Legal products arising out of the Decree
— Preparing draft documents on new legal institutes
— Complex support in attracting investment under new instruments
— Preparing company/group for M&A / attracting investor
— Conducting external legal due diligence of projects related to blockchain
— Complex support of ICO
— Preparing policies for crypto-exchanges, operators
— Legal due diligence of smart-contracts and establishing specifications for them
— Support during HTP entry and support of activities of HTP resident companies