Belarus: Contemporary History of ICO and Cryptocurrency
March 2017 – President of Belarus Alexander Lukashenko is holding the first public meetings with businessmen and owners of IT companies in order to discuss the strategy of building a large IT incubator in the country.
July 2017 – The draft bill on regulating blockchain, crypto, AI and self-driving cars is published.
September 13 – First transaction of Belarusian national cryptocurrency Taler is made.
October, 2017 – Official launch of the first national Belarusian cryptocurrency Taler which was built on blockchain and enhanced SoW algorithm.
December 21 – The Decree "On Digital Economy Development" is signed. Cryptocurrency mining, blockchain, crypto exchanges activity and other cryptocurrency business become legal.
February, 2018 – Prime minister Andrey Kobyakov declares that cryptocurrencies will not be traded on the domestic market but will only circulate within the Belarus High Technologies Park.
March 28 – The Decree "On Digital Economy Development" comes into force. According to this decree, legal entities and individuals will be granted substantial tax privileges when dealing with tokens and cryptocurrencies until January 1, 2023.
August 19 – One of the Taler founders, Denis Lavnikevich, together with the TalerTeam publishes a request to review the roadmap and restructure the project due to the low coin price and lack of its implementation across the country. Lavnikevich proposed to find a solution for current problems by voting which should be done before September, 2018.
Cryptocurrencies are legal in Belarus. This country was one of the first to establish regulation in this industry. According to the decree "On Digital Economy Development", until January 1, 2023 legal entities and individuals who deal with cryptocurrencies and mining will be granted substantial tax privileges. The decree has already come into force and the new regulation has been working for several months.
All legal actions related to blockchain which include ICO, exchanges, smart contracts etc. are now considered legial. Foreign companies can benefit from Belarusian favorable treatment and register their companies in Belarus. IT specialists from all over the world can also stay in Belarus without having to apply for special visa.
ICO in Belarus: risks and opportunities
According to the Decree of the President of the Republic of Belarus (dd. 22.12.2018. No.: 8) "On Digital Economy Development" ICOs are legal in Belarus. But in order to use the opportunities of crypto business, you need to join the High-Tech Park, a special economic zone for IT companies. High-Tech Park was founded in 2005 and it currently has 237 residents. The main difference between the park and its foreign analogues is its extraterritorial nature. This means that the resident company is not tied to a specific territory and can work in any part of Belarus.
Investors and companies often think about the advantages of launching an ICO in Belarus. Here are the main advantages:
1) Centralized legal regulation of ICO
With centralized regulation, there can’t be different approach used by different state bodies to determine the degree of legality of a particular project.
2) The prestige of Belarus as a jurisdiction
The Republic of Belarus is not under the economic sanctions of the international community, nor does it have any territorial armed conflicts. Also, Belarus is not considered as an offshore jurisdiction and has a large number of agreements on avoidance of double taxation.
3) Comparatively inexpensive accommodation
The cost of living here, in comparison with other IT-hubs, is extremely low. Especially when compared with countries such as Switzerland or Japan. Minsk has all the necessary conditions for wealthy life. This is important for businessmen who intend to control the management of their business personally.
4) A stable banking system
The Belarusian banking system is not super-conservative. If there are clear regulations on the ICO in Belarus, companies will be able to open accounts in Belarusian banks, independently of the type of activity. Although this does not mean that there will be no complete control over the operations of ICO companies.
5) Tax benefits
There are zero tax and no restrictions for mining, the creation, acquisition and alienations of tokens until year 2023. In addition, there are certain preferential zones (ITboxes), such as the High-Tech Park. IT companies may become residents of such zones.
It is important to understand that there are also risks of conducting an ICO in Belarus:
1) Criminal risk
It is very important to realize that Belarus is not going to become a "laundry" for companies wishing to earn money illegally. The ICO in Belarus is open only for projects that involve the real use of invested funds to generate profit. Projects must be legal.
2) The invested project must operate within the country
There is no restrictions on the use of funds raised through the ICO in Belarus to issue loans to foreign companies, if the company complies with the norms of the currency legislation of the Republic of Belarus. But it is important to note that Decree No. 8 was based on the idea to attract investment in local companies. Therefore, you shouldn’t rely on the automatic transfer of funds abroad. However, these shortcomings are not obstacles for investors, but only facts that should be taken into an account.
ICO in Belarus requires starting an actual, functioning business entity in one of the country’s regions but not just registering a nominal legal address and a fake CEO. At the same time, there are no problems with deduction of dividends received from investments. Cryptocurrency market regulation in Belarus protects crypto investors and miners from losses more effectively than in other jurisdictions. Moreover, dividing market into legal and illegal can put crypto activity to order. Apart from that, Belarusian policy can sift and separate companies that are aiming to just attract investors money and scam users. This will result in more transparency of crypto market.