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Belarus Ico Regulation, First Country To Legalize ICO

In this article, the Founder of Blockchain Law Lab and Founding Partner of Gurcan Partners,  Att. Bedrettin Gürcan will mention Belarus ICO Regulation, with all aspects.

Since 2009, the cryptocurrency market has increased effectually.  However, by 2018 Law Makers have waited to make a further step to regulate this market.

Some countries would like to enjoy the benefits of this massive market growth. Gibraltar and Belarus are willing to be the pioneers of the ICO market. The biggest tech park in Belarus, the name is Hi-Tech Park 2.0, often referred to as Belarusian Silicon Valley will enjoy the benefits of special regulations for taxation and legal regime.

There is an under-construction law, planning to finalize this spring (28 March 2018), Decree of the President (dd. 22.12.2018. No.: 8.), call the Digital Revolution.

The regulation will concern not the whole country, but a special economy park: “Veliky Kameny” only.

The groundbreaking Belarusian law is also known as “the decree on HTP version 2.0”. To enjoy the benefits of the new tax and legal regime a company has to be a resident of HTP.

The groundbreaking Belarusian law is also known as “the decree on HTP version 2.0”. To enjoy the benefits of the new tax and legal regime a company has to be a resident of HTP.

ICOs go legal in Belarus: what the Hi-Tech Park 2.0 can offer the IT industry

IT companies and blockchain enthusiasts are very welcome to Belarus in the scope of this law.

1. Contents

   • 1 What is Hı-Tech Park?
   • 2 What Do We Need It For Belarus Ico Regulation
   • 3     3.Cryptocurrencies And Blockchain Projects
   • 4 Tax Crypto-Holidays Until January 1, 2023
   • 5 Register Your Own Cryptocurrency Exchange In Belarus
   • 6 Structure Your Investments The Way You Used To
   • 7 7.Migrations Barriers Down

   What is Hı-Tech Park?

The High-Tech Park was established in 2005 as a state IT accelerator that provides substantial benefits for corporate and labour taxes in exchange for 1% of the revenue of its residents. Resident companies have the right to only perform types of activities stipulated by law.

There are several economic activities, including:

1. Software development
2. Production and sale of hi-tech hardware complexes
3. Creation and training of neural networks and other AI algorithms
4. Activities in the sphere of autonomous transportation
5. Mining of cryptocurrencies
6. and many, many others

2. What Do We Need It For Belarus Ico Regulation

Until January 1, 2049, the resident companies of the Hi-Tech Park are granted an astonishing packet of tax and regulatory benefits.

These benefits of the Digital Revolution of Belarus in the settled companies in the Hi-Tech Park:

1. Exemptionfrom a corporate profits tax (18%), VAT (20%) and offshore duty (15%)
2. Reduced income tax rate(9%) for the sale of shares
3. Reduced personal income tax (9% instead of the standard 13%) for the employees of the Hi-Tech Park resident companies
4. Exemption from income tax for individuals in relation to a sale of shares and securities in the Hi-Tech Park resident companies provided they owned the interest for at least 365 days prior to the sale
5. Exemption from a real estate tax, and a land tax for the period of construction (but not more than 3 years)
6. Exemption from the VAT for the sale of IP rights, advertising, web hosting, and other services to the Hi-Tech Park resident companies
7. Zero withholding tax for foreign companies when they provide advertising, data processing or web hosting services, or when they sell shares in a Hi-Tech Park resident company
8. Exemption from customs fees in case of import of technological equipment necessary for the implementation of an investment project in the IT sphere
9. And other incentives

    3.Cryptocurrencies And Blockchain Projects

The Decree introduces cryptocurrencies (tokens) and blockchain technology to the legal system of Belarus.

Individuals are guaranteed by law the right to own, mine, buy and sell, exchange, donate and inherit cryptocurrencies, with no need to declare tokens to the public authorities.

Business entities have a 100% legal right to own cryptocurrencies, buy, sell, create and offer their own tokens by running ICOs through cryptocurrency exchanges. What concerns mining, only the residents of the Hi-Tech Park are allowed to do so.

4. Tax Crypto-Holidays Until January 1, 2023

The Decree defines a 5-years tax-free treatment.

Resident companies of the Hi-Tech Park:

Turnovers and profits from mining, creation, purchase, and sale of tokens are exempted from VAT (20%) and a corporate profits tax (18%)

All other companies (including foreign-based):

1. Turnovers from the sale of tokens are exempted from VAT (20%)
2. Revenues and profits from an exchange of one token to another are exempted from the simplified tax (5%) and a corporate profits tax (18%)
3. Tokens, money, and cryptocurrency received investments during an ICO are not considered as revenues for tax purposes, therefore shall not be taxed

Individuals:

Income from mining, purchase, sale or exchange of tokens is exempted from a personal income tax (13%)

5. Register Your Own Cryptocurrency Exchange In Belarus

The new legal framework allows registering two types of crypto market players in Belarus:

1. Cryptocurrency exchange
2. Cryptocurrency ATM operator.

Having registered such entity as a resident of the Hi-Tech Park of Belarus and keeping in a Belarus-based bank BYN 1 mln. (512.500$) and BYN 200k (102.500$) respectively, you will be able to organize and operate ICOs and trade cryptocurrencies with local and foreign companies.

6. Structure Your Investments The Way You Used To

Investing your money in a Hi-Tech Park resident company will allow you to structure the deal the way each VC used to in the Valley. The Decree introduces such common legal concepts as:

1. Convertible loans
2. Stock option agreements
3. Indemnification agreements
4. Non-compete and non-solicitation agreements
5. Irrevocable power of attorney
6. Foreign-law governed shareholders agreements.

7.Migrations Barriers Down

Every foreigner who has ever worked in Belarus knows how inconvenient it is to obtain a special permit for employment and the one-year limit for a temporary residence permit.

The Decree cancels the requirement for the Hi-Tech Park resident companies to obtain permits for their foreign workers, and the temporary residence permit for a foreign worker will now be determined by the duration of the concluded employment contract plus two months after its termination. The icing on the cake, is a 180-day visa-free treatment is established for employees and proprietors of the Hi-Tech Park resident companies.

It is very clear that Belarus’s ICO Regulation will draw more attention to other countries.