In Belarus, a new law was passed, on December 21st, 2017, which authorized the transactions, ICOs and smart contracts of cryptocurrency this coming March. Aimed at attracting bigger tech companies to the area, the new legislation also provides tax exemptions for all revenue generated through cryptocurrency trading or mining until the year 2023.
The law was passed to help develop a digital economy and was enacted in hopes of attracting more tech companies and bringing in more foreign capital to Belarus. The legislation, which is mostly aimed at legalizing cryptocurrencies in the country, will come into effect this March and will allow businesses who reside in the HTP or High Technology Park to make payments and perform transactions using digital currency.
Like Silicon Valley in the US, HTP provides special tax benefits in Belarus. And now, thanks to the new legislation, residents of HTP will be able to act as private companies to invest and make transactions with cryptocurrency. The law will also allow the exchange of smart contracts or futures contracts on cryptocurrency against traditional currencies.
This new legislation was introduced as an effort to help revive the national economy following its 2015/2016 recession and will also allow entrepreneurs in the field to bring in foreign capital.
Currently, HTP hosts about 192 companies and has customers in 67 countries around the world. 35% of those countries rely entirely on foreign investments, which could be a great advantage to Belarus. The country’s tech sector is booming and has an average salary about 5 times higher than other averages.
In addition, several large tech companies, namely Viber and World on Tank have already decided to move their offices to Minsk. With the new legislation, the country hopes to attract even more high-tech companies in the future.
Major Tax Breaks
One of the best things about the new legislation is that it provides absolutely no restrictions or taxation on revenue generated through cryptocurrency for the next 5 years. Both, mining activities and the transaction of digital currencies will not need to be declared until 2023. To allow for more flexibility in its interpretation, the legislation gave a broad definition of cryptocurrency and smart contracts. Today, thanks to the new law, Belarus is the first country in the world to fully legalize the use of smart contracts.
Despite drops in the price of Bitcoin last December, Minsk still believes in the future of Blockchain technology and is encouraging companies to develop new forms of digital currency. With the enactment of the legislation, the President, Alexander Lukashenko, is hoping his country will become a paradise for tech companies.
Anton Myakishev, Director of Microsoft’s head of office in Belarus, has expressed his excitement about the new law saying that it is a big step forward for the country and that it is sure to help draw in more tech companies and foreign investments.
Although Bitcoin continues to decrease in value and has now dropped below the $10,000 mark, Belarus seems confident in the future of cryptocurrency. Coming into effect in March, we will soon see the country start to develop their own digital economy.