Belarus officially legalizes cryptocurrency, mining and trading are tax-free

Belarus, which once had a bad reputation in the West, seems to want to change the Western business community's mind. On Wednesday, Moscow's close friend, also known as Europe's last dictatorship, became a leader in Europe, at least in terms of cryptocurrency freedom. Full regulation and legalization of the cryptocurrency sector has been achieved here.

Presidential Decree No. 8, signed by Belarusian President Alexander Lukashenko in December last year, came into effect on March 28, creating conditions for the development of the digital economy. Cryptocurrency business activities have thus been legalized, including exchange services, ICOs, mining and smart contracts. The document does not restrict the issuance, storage and trading of digital tokens. Independent entrepreneurs and companies in the cryptocurrency industry can conduct business around the world, provided that they register as residents of the Belarusian High-Tech Park (HTP).

Lukashenko's presidential decree provides favorable tax policies and financial subsidies for cryptocurrency companies, which can be enjoyed by January 1, 2023. Companies involved in mining and the issuance and layout of digital tokens do not have to pay taxes. This also applies to individuals who earn income from cryptocurrency activities, such as mining and cryptocurrency trading. For the next five years, cryptocurrency companies registered in Belarus will not have to pay taxes even if they operate abroad.

The new regulation simplifies the process of forex trading and hiring foreign employees in HTPs. HTP employees and investors do not need to apply for work permits. They will also benefit from a special visa exemption system and obtain temporary residence status in Belarus.

Comprehensive supervision

In addition to the presidential decree, there are other legal changes. This week, Belarus adopted a new standard that aims to adjust its accounting rules for cryptocurrencies. The new regulations define cryptocurrencies as "digital tokens" based on how they are acquired and their intended use. The authorities also clarified the information that cryptocurrency companies and entrepreneurs need to share. The state's account books have also been changed accordingly.

The Belarusian central bank has also taken action. They have begun to strengthen supervision of commercial banks and other financial institutions and have put forward new requirements for their internal management processes. According to the government announcement, the new regulations will legalize the prevention of illegal income, terrorist financing, and the proliferation of weapons of mass destruction. Officials said that the supervision is to improve anti-money laundering measures and network security mechanisms.

Taking into account all the upcoming challenges, Minsk (the capital of Belarus) decided to set up a special committee for the development of the digital economy. Its responsibility is to coordinate the digitalization process and development in the field of information and communications. The chairman of the committee is Prime Minister Andrei Kobyakov. In addition, President Lukashenko is also considering the establishment of a Ministry of Digital Economy, and this new state department is likely to be officially established this year.

Belarus makes the most of everything

Lukashenko has repeatedly mentioned that Belarus needs to learn how to profit from the development of information and communication technologies. In December last year, the leader said that the country's IT industry needs new impetus. He insisted that Belarus needs to attract more talents and successful companies. He believes that Belarus has all the resources to develop AI (artificial intelligence), big data and blockchain technologies.

Lukashenko said he had no intention of hindering the process, but he reminded entrepreneurs not to forget Belarus and the interests of the country. He promised, "Let us fight for this land together. I can guarantee that your work will be stable and undisturbed."

Since the signing of Presidential Decree No. 8, Belarusian authorities have received a large number of registration applications from cryptocurrency companies. The Minsk government announced that the number of residents registered with HTP has increased by nearly a quarter this year, and residents are currently scattered in 67 markets around the world.

Although the new regulations create favorable conditions for overseas investment and technological development, critics point out that Belarus may become another "going overseas zone" and a cryptocurrency-friendly region.