Crypto-related Business Becomes Legal in Belarus

The former Soviet country aims to be an IT nation

by Marin Marinov
29 March • 3 min
In Regulation

Belarus, a former Soviet republic, legally-recognized the crypto-related business as president Alexander Lukashenko`s decree about digital economy took effect at midnight of March 28.

The decree legalizes transactions in cryptocurrencies, their exchange for fiat money, and altcoins trading at Belarussian exchanges that is exempt from income taxes and VAT till 2023.

The decree (available in Russian) also legalizes initial coin offerings (ICOs) and allows local IT companies to operate in part under English law the common legal system of England and Wales), mainly for registration regime. The ‘Law on digital economy’ hopes to attract foreign investors, however the English law-measure is an unusual step for Belarus as the country is a member of the Russian-led Eurasian Economic Union (EAEU).

Provisions

big table with persons sitting around including president Lukashenk
Belarusian President Alexander Lukashenko during a meeting with IT business, Minsk, December 2017/ Image`s source: www.president.by

President Alexander Lukashenko wants Belarus to become an ‘IT nation’, the head of state said when announcing the decree in December. Some of the main provisions in the legislation are:

· introduction of rules for tokens as objects of property rights;

· introduction of a special accounting framework for tokens. Last week, Belarus adopted crypto-accounting rules, including categorization of tokens received by organizations depending on their future usage;

· introduction of a legal definition for mining and smart contracts;

· allowing possession of tokens by any legal entities and citizens, including mining or ICO-related activities;

· establishing conditions for protection against unfair competition;

· definition of English law provision, including ability for appointment of arbitration to adjudicate disputes.

Minsk High Tech Park

The new law wants to make High Tech Park (HTP) of Minsk the main IT Hub in the region and therefore some of the new rules are allowed only for companies or individuals with HTP resident status. For example, tokens can be possessed by anyone, but transactions should be carried out through HTP residents.

sofa with big advertisement behind and flower in box on the left
Inside Minsk High Tech Park/ Image`s source: www.park.by

To become a HTP resident, a company should operate in one of the 38 spheres that the law recognizes as important for digital economy development, such as mining, ICO, altcoin trading, cryptocurrency investments, bio- and medical technologies, artificial intelligence, unmanned vehicle control systems, cybersports, etc.

Some Western companies have already opened offices in the park as the US-based EPAM Systems, founded by two Belarussians in 1993. Belarussian software engineers are behind the popular video game World of Tanks and message application Viber, controlled by Japanese Rakuten Inc. Belarus also wants to attract investments from its closest ally and neighbor Russia as well as its important trading partner Ukraine.