On November 1, 2021, Poland, following Estonia and Lithuania, introduced state regulation of entrepreneurship in the field of cryptocurrencies. By amending the anti-money laundering law, the government is seeking to prevent the use of virtual currency for criminal activities and increase the level of protection for consumers of cryptocurrency companies’ services.
Note! Poland is an attractive jurisdiction for starting a virtual currency business. The signed bilateral agreements on the avoidance of double taxation between Poland and more than 84 countries of the world make the jurisdiction one of the most favorable in terms of taxation. Now that the dots on the “i” in the legislative regulation of the cryptocurrency business have been dotted, a crypto company in Poland is a promising European platform that can be scaled at will.
A team of international law experts Lawrange is constantly monitoring virtual currency regulations and is continually exploring new jurisdictions in order to be able to offer clients working solutions, including – on company registration, taxation of transactions with virtual assets and business in general. If you decide to start a crypto business in Poland, please contact us – we will provide you with all the assistance you need!
Legislative innovations related to cryptocurrency business
Since November 2021, the conduct of activities in the field of virtual asset turnover has become a regulated business in Poland. Companies engaged in such activities must go through the state registration procedure in a separate register of cryptocurrency enterprises. Entrepreneurs are entered into the register if these persons comply with certain formal requirements. The registration procedure can be regarded as analogous to obtaining a license for activities related to cryptocurrencies.
For your information! Operations with cryptocurrency in Poland were de facto legal until November 2021, since there were no rules prohibiting the exchange and trade of cryptocurrencies. Following the entry into force of the amendments to the AML Law (“AML Law”) , the scope of responsibility of organizations involved in cryptocurrency trading has expanded. Significant changes include the registration of cryptocurrency transactions in order to counter the legalization (laundering) of income and the establishment of limits for cryptocurrency transactions.
In general, specific legislation regarding the regulation of cryptocurrencies and related activities is in Poland at the initial stage of implementation. Under the terms of the AML Law, virtual currency is defined as a digital expression of value that is not considered legal tender.
On March 1, 2018, the Polish Parliament adopted the Law on Combating Money Laundering and the Financing of Terrorism, in the framework of the implementation of the provisions of the so-called 4th EU Directive against money laundering. The solutions included in the directive serve to streamline the process of verifying suspicious cryptocurrency transactions and exchanging virtual currencies for fiat money. On March 30, 2021, parliamentarians adopted amendments to this Law, which entered into force on October 31, 2021.
The changes in the law are the result of the implementation of EU legislation and the recommendations of the Financial Action Task Force on Money Laundering (FATF). In particular, we are talking about the 5th AML Directive. In accordance with paragraph 1 of Article 1 5th Directive (EU) 2018/843 / EU of the European Parliament and of the Council of the European Union of 30 May 2018, Members must ensure that virtual currency service providers are licensed or registered . In particular, we are talking about providers of services such as the exchange of virtual currencies for fiat money, the provision of wallets for storing cryptocurrencies, and so on.
Likewise, member states can choose to implement the Directive’s requirement in one of 3 ways : 1) a cryptocurrency licensing procedure can be introduced; 2) it is possible to introduce a register of organizations doing business in the field of cryptocurrency; 3) you can choose to define virtual currency exchange services as a type of financial services, which will oblige the relevant organizations to obtain financial licenses.
The Polish parliament for a long time postponed the implementation of the requirements of the 5th Directive, and in Poland there was no procedure for registering cryptocurrency organizations and there was no obligation to obtain a license for activities related to virtual assets. At the same time, cryptocurrency exchange services were not classified as payment services, so there was no need to obtain any kind of financial license.
Reducing the limit on anonymous cryptocurrency transactions
Innovations in accordance with the “AML law” have affected the limit on anonymous transactions with cryptocurrency. A new KYC (Know Your Customer) threshold has been set for transactions with virtual currencies. If previously this threshold was 15,000 euros, then starting from 31.10.2021, customers must be identified in the event of “accidental” transactions over 1,000 euros.
Organizations that are engaged in cryptocurrency activities will have to apply financial security measures for one-time transactions in an amount equal to or exceeding 1000 euros. In other words, you cannot buy or sell cryptocurrency without passing verification if the transaction amount is 1000 euros or more.
Note! This change will mainly affect crypto ATMs. At the moment, anonymous withdrawals are only allowed for amounts up to EUR 1,000, whereas previously the amount was EUR 15,000.
Entry into the register of companies engaged in cryptocurrency activities
As explained earlier, a company does not need to obtain a crypto license in Poland for legal activities in the field of cryptocurrency, but registration in the appropriate state commercial register.
Important! The regulation of virtual currencies in Poland has a registration form, not a licensing form. For in order to get into the register, a cryptocurrency entrepreneur must meet certain formal conditions.
At the same time, not every organization specializing in cryptocurrencies is obliged to comply with the AML rules. For example, websites with educational information on cryptocurrencies or consulting companies are not subject to the new registry requirements.
Attention! Requirements for mandatory registration in a special register apply to crypto companies in Poland providing the following services:
- exchange of virtual currencies for fiat money (exchangers, cryptocurrency exchanges);
- exchange of virtual currencies one for another;
- provision and maintenance of accounts for virtual currencies (wallets);
- intermediation (brokerage) for the exchange of virtual currencies.
Important! The register will be maintained and controlled by the Ministry of Finance of Poland. For conducting activities in the field of virtual currencies without an entry in the register, a fine of up to PLN 100,000 is provided.
The registry was activated on November 1, 2021. However, entrepreneurs who have been operating in the field of virtual currencies in Poland before November 1 have an additional 6 months to adapt the business to the new requirements and to register an entry in the register.
In other words, new crypto companies in Poland that will be registered after November 1, 2021, must go through the registry entry procedure before starting operations </ span >. Entrepreneurs registered in accordance with the requirements of the current legislation and operating in the field of virtual currencies before November 1, 2021, must register in the register by May 1, 2022.
Taxation in Poland
Companies and individuals in Poland are required to pay the following taxes:
- CIT (Corporate Incom Tax), corporate income tax – 9% if sales in the current year do not exceed the equivalent of 2 million euros, and 19 % – if sales are higher.
- VAT (Value Added Tax) – 23% basic rate.
- PIT (Personal Income Tax), personal income tax – 17%, 19%, 32% depending on the form of taxation and profit in the financial year.
- Dividend TAX, dividend tax – 19% for residents, in the case of non-residents, see Tax Treaties, the existence of tax agreements between countries.
- Withholding Tax, income repatriation tax – 0% – 20%.
Important! When officially hiring employees in the company, the employer is obliged to make the following contributions to them: social insurance and health insurance, as well as to the pension fund, which is about 64% of the amount net.
In Poland, it is imperative to keep accounting records and submit tax returns: VAT reporting is submitted monthly or quarterly, CIT declaration – once a year. Advance tax payments are made monthly or quarterly. Financial statements are submitted once a year. In general, accounting services for a company in Poland cost from 150 EUR per month.
Taxation of transactions with virtual currencies
Since January 2019, virtual currencies in Poland are subject to corporate tax (capital gains tax) at a rate of 19%, although taxation is possible at a preferential rate of 15%. Income tax on exchanging virtual currency for virtual or fiat currency ranges from 17% to 32% in accordance with a progressive tax scale.
Requirements for persons planning cryptocurrency activities
According to the innovations of the “AML law”, which began to operate on November 1, 2021, there are two main such requirements.
No criminal record.
The managers and beneficial owners of a cryptocurrency company in Poland must prove that they have no criminal record in the following types of crimes: tax, in relation to the activities of state bodies and local authorities, against justice, reliability of documents, free economic circulation, property interests and cash flow. The persons concerned must present a certificate issued by the law enforcement authorities.
Competence and reputation.
Individuals who decide to conduct a business in the area of virtual currency trading should have knowledge or experience in this area. The requirement can be fulfilled in two ways:
- taking a training or course covering legal and practical issues related to virtual currency activities;
- carrying out at least one year of activity in the field of virtual currencies, confirmed by the relevant documents.
Required documents for registering a crypto company in Poland
To start with the registration of a cryptocurrency project in Poland, you will need the following documents:
- power of attorney for the lawyers of Lawrange JSC to register a company (in case of remote registration) – we undertake the issuance of the power of attorney;
- a notarized copy of the national passport and foreign passport of the director / founder of the company with an apostille;
- registration documents – we undertake preparation.
The client will also need several options for the name of the company – we will check the registry if the names provided are free.
*** Note: Apostilled registration documents are prepared for an additional fee:
- an extract from the state register in Polish with apostille – 350 euros;
- charter in Polish with apostille – 350 euros.
Stages of crypto authorization (obtaining a crypto license) in Poland
1. Preparation and submission of documents for registration of a company in Poland.
The cost of services of JSC Lawrange specialists includes:
- preparing documents for remote registration;
- two electronic signatures (an EDS will be required for each of the founders / directors, an additional EDS – 250 euros).
- payment of all state fees associated with the registration of a legal entity;
- preparation of initial declarations to the tax office and to the register of beneficiaries;
- service of renting a legal address and mailbox for 1 year.
*** Note: Remote receipt of an EDS is possible through certification at the Polish consulate of the signature.
2. Obtaining a Polish tax number PESEL.
You will need a Polish tax number to submit an electronic application through the ePUAP government services platform.
If we are talking about remote receipt of PESEL, then the procedure includes:
- translation of a certified copy of the director’s passport under an apostille (if the document is certified by a foreign notary, and not at the Polish consulate) – performed in Poland;
- courier dispatch of a document confirming receipt of the PESEL tax number to the client.
The terms for receiving PESEL are up to 30 days from the moment the client provides the original documents + translations.
Next, you need to appear at the Polish consulate in order to activate ePUAP. You should take your passport and confirmation of receipt of the PESEL tax number with you. Upon activation, we send a registration application to the Registry of companies working in the field of cryptocurrencies.
In the case of a personal visit to Poland, obtaining a PESEL tax number in terms of time is significantly accelerated, and is only one working day.
3. Registration of the company in the register of organizations working in the field of cryptocurrencies.
At this stage, the following steps are carried out:
- preparation of documents for entering the company into the register of organizations working in the field of cryptocurrencies;
- payment of state fees related to this;
- AML procedure in Polish.
The deadline for making an entry about the crypto company in the registry is 14 days from the date the director of the company signs the application through ePUAP. In case of any questions from the registrar, these terms can be extended for another 14 days from the moment the letter is sent by the registrar to the client’s ePUAP mailbox.
The cost of the service “ cryptocurrency license in Poland ” from JSC Lawrange on a turnkey basis is 9900 EUR.
It includes all the above procedures.
Registration of a crypto company in Poland
Registering a company in Poland, subject to the established rules, is not as difficult as in many other European countries. And this is for both local and foreign investors. The process of setting up a Polish company for cryptocurrency companies is the same as for any other corporate structure.
For your information! The entire registration procedure can take from two weeks to a month, depending on the chosen organizational and legal form of the company. Registration can be done in two ways: online or physically at a notary office. The experts of JSC Lawrange offer the option of remote registration as a matter of priority.
This is the so-called registration in the S24 system . This online system is regulated by the Ministerstwo Sprawiedliwości (Ministry of Justice) of Poland. In it, you can register and make changes about any legal entity, use ready-made document templates, submit annual reports, sign documents using a trusted profile.
Key points of business registration:
- The new company must have an original name.
- The business entity must be registered with the CEIDG (Central Register of Economic Activities) or the KRS (National Court Register).
- For different organizational and legal forms of business, requirements are imposed on the minimum authorized capital and management structure.
- If registration is carried out online, then an electronic signature and a trusted profile on the ePUAP government services are required.
- Electronic identification will be required in the future for remote management of activities, including – conducting correspondence with state administrative authorities, including the tax office and the ZUS (Social Security Administration).
- If there are more than 5 employees on the staff, electronic correspondence with government services is required.
- The optimal form of business for foreigners in Poland is a limited liability company (spółka z ograniczoną odpowiedzialnością or Sp.z o.o.). Other forms are not available to all foreigners.
- When registering a company, it is necessary to correctly determine the codes of activities according to the classifier – PKD (Polska Klasyfikacja Działalności).
- Any number of types of activity can be specified in the memorandum of association (analogue of the charter). In the future, you need to select 10 codes that are displayed in the KRS business register.
- The minimum authorized capital for an LLC in Poland is PLN 5,000. The authorized capital of an LLC in Poland is considered to be formed at the moment of signing the memorandum of association (umowa spółki).
- After registering a company, it is necessary to open a bank account for it.
- Within seven working days from the date of registration, it is necessary to submit information on the ultimate beneficiaries to a special register. Failure to comply with this requirement is subject to a fine of up to PLN 1 million.
- Within twenty-one days from the date of registration, the completed NIP-8 form should be sent to the tax office at the place of registration, which contains information about the bank account and accounting of the company.
From now on, Poland can be classified as one of the states where cryptocurrency activities are regulated at the legislative level. Although a license for cryptocurrencies in Poland is not issued, it is replaced by the so-called crypto-authorization procedure – making an entry about the company in a separate register of organizations that operate in the field of virtual currencies.
We are currently actively testing the cryptoauthorization procedure. As our client, you can get a good head start among competitors in the market by registering a crypto company in Poland under the new procedures among the first.