Legal framework for blockchain technology in Belarus

Presidential Decree no 8 of December 21, 2017 “On development of the digital economy” introduces significant improvements for development of the IT industry in Belarus.

The Decree allows legal entities to store tokens (cryptocurrencies) in digital wallets, to create and place tokens in Belarus and abroad through residents of High Tech Parks (HTP), to buy and sell tokens for Belarusian rubles, foreign currency and electronic money, to perform other transactions with tokens via crypto platform operators and crypto exchange operators – HTP-residents.

Activity by natural persons in mining, storage, exchange and sale of tokens is not recognized as a business activity (if carried out independently without involving other persons under labour or civil law contracts) and need not be declared.

Decree no 8 establishes additional preferences for those involved in relations connected with use of modern technologies (tax exemptions, non-application of currency restrictions until 2023).

Tokens mined during the mining process are considered as assets for accounting purposes. In general, Decree no 8 creates only framework conditions for the legal regulation of blockchain technology, though improving legal acts are expected over time.

In addition, a number of new legal institutions are introduced for HTP residents, e.g.:
– the option to conclude convertible loan contracts, where the lender provides money to the borrower, and the borrower transfers shares (stakes) to the lender in the borrower’s statutory fund instead of repaying the loan as specified in the contract;
– deals through smart-contracts;
– contracts to reimburse property losses (the option to agree to distribute risks of losses);
– non-competition agreements with employees;
– non-solicitation agreements.

We should remember that the High-Tech Park in Belarus was established in 2005 and provides tax plus other benefits and preferences for residents. The new Decree extends this special regime until January 1, 2049, and introduces additional simplifications. In particular:

– non-application of legislation on control of foreign trade transactions;

– the option to process foreign economic transactions in non-documentary form (e.g. an offer – in the form of a program code, an electronic message without a signature, or without an electronic digital signature, acceptance – by acting in accordance with the terms of an agreement); a bilateral acceptance certificate is also not required.

The decree enters into force on March 28, 2018.

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