Crypto license in Poland
Due to the growing popularity of virtual currencies, Poland has become a favourable jurisdiction in terms of taxation of cryptocurrency business and fast legalisation. Gofaizen & Sherle provides professional support in remote obtainment of a Poland crypto license with a turnkey contract guarantee in less than 4 weeks and offers ready-made solution
According to the National Bank and the KNF Financial Supervision Authority, anyone who has registered and operated a cryptocurrency business before 1 November 2021 needs to get on the register by 1 May 2022. Moreover, the Polish government has considered taxing profits from digital assets from the beginning of 2022. A declaration on the creation of the European Blockchain Partnership (EBP) was signed. However, after signing bilateral agreements between the Polish government and state representatives of 84 world countries, on avoiding double taxation, the country confirmed the status of a favorable jurisdiction for crypto-business from a taxation perspective.
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Currently, there is no authority in Poland issuing a license for the exchange and custody of cryptocurrencies. In order to be compliant with Polish legislation as a virtual asset service provider (VASP), it is required to register a limited liability company (Sp. z o.o.) within the trade register as VASP, pay the share capital of PLN 5000 (approximately EUR 1100), submit AML procedural rules, and appoint an AML officer in charge. The aforementioned actions will allow the company to perform the following activities:
- The exchange between virtual currencies and fiat money (for example EUR to BTC or BTC to USD);
- The exchange between virtual currencies (for example BTC to ETH);
- Custody services (keeping private keys on behalf of third parties).
Crypto companies in Poland have to comply with generally accepted European regulatory standards based on AMLD: the impeccable reputation of company owners and directors, regular verification of the company's customers (KYC), revealing suspicious and non-standard transactions, and reporting to regulatory authorities.
Persons who deal with virtual currencies and representatives of Polish cryptocurrency companies must have knowledge or experience related to activities in this field. If requested by the regulatory authority, proof of this requirement should be provided.
Requirements for a Crypto License in Poland
The following requirements are some of the most important traits that must be fulfilled by a Polish Company that wishes to offer services in the crypto sector:
- Establishment of internal policies (AML/KYC), as well as internal control policies,
- Appointment of a qualified employee responsible for fulfillment of AML/CTF obligations as specified in the Act on Counteracting Money Laundering and Terrorist Financing,
- Creation of necessary procedures for the establishment and monitoring of business relationship and identification of customers that benefits from the services of the company,
- Implementation of necessary procedures for fulfillment of international sanctions,
- Installment of necessary infrastructure for the safe storage of customers’ data,
- Outlying necessary procedures for reporting suspicious transactions and other operations,
- Ensuring the company's shareholders and senior management have a good business reputation and clear criminal record,
- Implement risk-based approach in the course of licensed virtual asset related activity, taking into account the risks identified through relevant risk assessments.
Procedure for obtaining a Crypto license in Poland
After 7-9 weeks company will be fully registered as a Virtual Asset Service Provider and 3-4 weeks will be required extra to become fully operative and open a Bank account
Stage 1
GATHERING DOCUMENTS FROM THE CLIENT TO START THE PROCESS
Result: Gathering basic information from the client; providing a preliminary package of documents for further execution of the power of attorney (PoA); clarity of project scope and budgets.
- Analysis of the project
- Collection of necessary documents for the KYC purposes and the description of the desired business
- Preparation of power of attorney for notarization and legalization
- Verification of the name chosen for the business
- Collection of data related to shareholders and the criminal record of the director
- Documents receiving at our office in Poland
Stage 2
REGISTRATION OF A LIMITED LIABILITY COMPANY (SP. Z.O.O. or SA)
Result: The company is registered in Commercial Register with the desired name; the company is ready for registering their crypto related activities in cryptocurrency business register with the Tax Administration Chamber.
- Conducting sworn translation of power of attorney and certificate of criminal records in Polish
- Carrying out the notarial deed for company registration
- Entry of company data into the commercial register and business register
- Preparation for the acquisition of Polish Tax Number (PESEL)
Stage 3
Crypto Licensing Process in Poland
Result: The company has registered its activities related to the field of crypto assets and it is ready for operations.
- Collecting additional information about the client’s business (identifying risk appetites, geographical location of the desired customers, nature of the business and other details) and drafting of AML/KYC policies tailored to the needs of client company's cryptocurrency operations
- Submitting application and other necessary documents for registering business activity to the Polish Authorities and communication in the course of registration process
- Hiring and training an AML officer for the company and adapting their skills to the company's operations, in accordance with the Polish Law. Instructing the officer on regulatory requirements and their obligations
- Appointment of the qualified employee as an AML Officer
- Translation of internal documents to Polish
Stage 4
CORPORATE ACCOUNT OPENING AND ACCOUNTING
Result: The company is fully operational; the corporate account is open and the organization meets the requirements of the tax authorities (accountant integrated) as well as the supervisory authority as a virtual asset service provider.
- Analysis of the most suitable Banks/EMIs, comparison of the risk appetite of the bank in relation to the risk appetite of the Client based on previously prepared AML policies
- Collection of necessary documents from the Client side to initiate the process (flow of funds, source of wealth, description of the purpose of opening an account, key partners, company website, utility bill, etc.)
- Initiation of the onboarding procedure simultaneously in 2-3 crypto friendly EMI's
- Guiding the Client's company through the entire process of opening an account
- Development of accounting rules for the client's crypto company
- Integration of an accountant and preliminary consultation on the conduct of activities within the framework of crypto accounting
Types of Poland crypto licenses
Since 31 October 2021, all crypto related activities has become regulated activities, thus the law started to impose additional obligations to the entities and required them to acquire necessary licenses by registering in the cryptocurrency business register with The Tax Administration Chamber in Katowice through e-PUAP system.
However, as per Article 2.1 of Polish Act on Counteracting Money Laundering and Terrorist Financing, the Polish Law recognizes Virtual Asset Service Providers as Obliged Entity, and the law makes certain distinctions between the service types that can be offered by them. While also imposing different obligations on these entities, depending on the activities they offer, it also requires them to acquire relevant license through registration to the cryptocurrency business registry:
Exchange between virtual currencies and means of payment
Exchange between virtual currencies
Intermediation in the exchanges referred to above
Keeping accounts ensuring that authorized persons can use units virtual currencies, including their exchange transactions (custodian wallet service)
Explore other Crypto Licences
CRYPTO ACTIVITIES IN POLAND
The following activities are acknowledged as crypto activities in Poland.
Asset Exchange
Services providing possibility of interchanging virtual assets or purchase of virtual assets with fiat currencies from the service provider is categorized under this activity. Usually, the service provider offers a list of assets that is accepted by them, and only allows exchanges to be done between them and their customer. The customers can exchange one type of virtual asset to another or purchase the virtual asset with depositing fiat currency to the account of the service provider. Companies that offer asset exchange services may or may not allow transfers to the third parties, meaning the virtual assets acquired by the customers cannot be used as a tool to transfer value to third parties and the acquired virtual assets can be only used by them for investment purposes.
Asset Transfers
If a service provider allows exchange of virtual assets between third parties, their activity will be categorized as an asset transfer. Asset transfer services allows their customers to use the virtual assets to be used as a means of payment or transfer of value. The company may be a close circuit service provider, where only internally purchased virtual assets can be transferred between third parties, or it can be an open circuit and allow movement of funds acquired from third parties. In both cases, the service provider becomes subject to Financial Market Supervision and Payment Services Act and obtains further obligations at top of existing obligations for being an obliged entity under the Act on Counteracting Money Laundering and Terrorist Financing.
Marketplaces, Intermediary Services for Sale or Trade
Any intermediary service facilitates exchange, trade or transfer of virtual assets are categorized under this activity. In order to be an intermediary, a company must offer a service which allows execution of financial operations by the will of its customers which does not require their involvement. Usually, the assets in circulation are not under the possession of the company that is offering these services. This means that the company provide a marketplace that facilitates the exchange between crypto to crypto, fiat, or any other asset between third-parties.
Custodian Wallet Service
Custodian Wallet Service is the practice of safe keeping and the virtual assets of a customer in a corporate owned electronic storage system. This service is usually given directly by the service provider or through a third-party solution provider which provides infrastructure for the service. As a general practice, usually, the private key of the wallet is held securely by the service provider and only the public key is given to the customer. The customers of the service providers would require their assistance for the execution of transfers to third-parties, which can be done through direct requests, phone applications, or widgets provided.
OTHER CRYPTO ACTIVITIES
The Polish Legal System does not have a comprehensive structure that is regulating the crypto related affairs. This means that virtual currencies are not observed as a type of money, and from mining to the purchase, and sale of these assets are recognized as activities that is not prohibited by the law. However, considering the overlaps between certain Acts, The Polish Financial Services Authority has published a statement in 2020 which has resulted with classification of virtual currencies under 3 categories, briefly, they are:
- Payment Tokens: These tokens are also known as Currency Tokens or Exchange Tokens. For a token to be classified under this category, it must possess an Issuer and tokens must represent a fixed value in fiat currency, fitting to the electronic currency described in Payment Services Act.
- Utility Tokens: This is the category of token which has been created for a specific functional purpose. The owners of these tokens are granted specific features that cannot be accessed without holding the token in question.
- Security Tokens: Polish law observes security tokens in different perspectives because they are seen as candidates to be governed under both Act on Trading in Financial Instruments and Act on Alternative Investment Fund Management since these tokens has the potential to provide incorporate rights similar to traditional securities or provide participation rights in investment related actions of the company and classified under this category.
As well as the type of service, it is also important to correctly identify the category of token before an application is made for licensing as it also determines all of the obligations that will be imposed on your company. If you are unsure which category your project falls under, our lawyers will assist you with its correct classification.
RESPONSIBILITIES OF VASPS
Despite the Polish Laws does not directly regulate the virtual asset related affairs, it regulates the entities that is involved with the virtual assets. Obligations do vary depending on the service and category of virtual currency that is offered by the entity, however a Polish VASP is required to only conduct the activity that it is registered for in the register and take necessary precautions for the type of virtual currency they are involved with. Failure the comply with these requirements will result with a punishment up to PLN 100.000 and other administrative punishments depending on the severity of the offense.
Moreover, without making distinctions on the type of the service or the activity conducted by the entity, a Polish VASP also has the obligation to take necessary precautions against illicit use of their services, record the personal information about their clients, and take extra measures for the transfers exceeding €1000. If the VASP does not comply with these obligations it may be subject to administrative penalites and €5 Million or %10 of turnover.
TAXATION OF CRYPTO COMPANIES AND CRYPTO TRANSACTIONS IN POLAND
Just like the legal landscape surrounding virtual assets in Poland, the taxation scheme is also beneficial for the businesses that wishes to introduce themselves to this sector. The Polish Legal System does not consider virtual assets as a currency unit or a payment instrument, the profits from virtual assets are either classified under personal income tax (as income from cash capital) or as profits from business activities (as capital gains). In both cases a progressive tax scheme is available, while the private persons benefit from a rate between %18-%32, the businesses benefits from the rate of 15% or 19% depending on their size.
As of March 2023, Polish Companies are liable with paying the following tax rates:
- Corporate Income Taxes (CIT) - 19%
- Taxes on profits (BT) - 19%
- Capital Gains Taxes (WCL) - 19%
- Value Added Tax (VAT) - the basic rate of 23%
- Social Security (SVP) – 19.48% to 22.14% (of gross salary)
- Health insurance (SA) - 9%
LEGAL ACTS APPLICABLE TO CRYPTO COMPANIES
In the course of crypto-relate activity in Poland, the following legal acts shall be taken into account:
- Act on Counteracting Money Laundering and Terrorist Financing – laws establishing the grounds of AML/CTF and Sanctions framework in Poland, as well as obligations imposed on the entities involved with virtual currencies
- Act on Financial Market Supervision – rules established for the activities performed by the entities providing financial services,
- Act on Financial Instruments – regulates the financial instruments offered by companies in Poland,
- Act on Investment Funds and Management of Alternative Investment Funds – provides the rules on investment funds and management of their alternatives,
- Payment Services Act and relevant amendments– describing the requirements and obligations imposed on entities that provides payment solutions or related services, including e-money institutions,
- Polish Penal Code– providing information on criminal offences and related penalties, as well as activities involving money laundering and terrorist financing,
- Cooperative Law– establishing the rules on incorporation, management, and general functioning of the companies in Poland.
- UN Sanctions (Resolution 1267 of 1999, Resolution 1988 of 2011) and EU Sanctions (Council Regulation No 2580/2001, Regulation No 881/2002, Regulation No 753/2011) – imposing restrictive measures against certain persons and entities.
FAQ about crypto license in Poland
Does Poland grant a license for crypto activities?
What types of commercial activities can be conducted under the obtained crypto license in Poland?
The AML Act outlines four types of services related to virtual currency activities: exchanges between virtual currencies and fiat means of payment, exchanges between virtual currencies, intermediation of exchanges as described in a or b, and maintenance of electronic identification data accounts that allow authorized individuals to use virtual currency units, including conducting exchange transactions (wallets).
As for the background of cryptocurrency licensing in Poland, anyone who wants to engage in virtual currency activities, as defined by the AML Act, is required to obtain a Polish VASP license. This includes both Polish and foreign entities. The process for the cryptocurrency license in Poland involves applying to the competent authority, which then evaluates the application and approves or denies the license.
How do I get a crypto license in Poland?
To become registered as a virtual asset service provider in Poland, a company must complete the following steps:
- Register a physical office address in Poland.
- Submit copies of documents for company owners, directors, and senior managers that demonstrate an impeccable reputation and no convictions for law violations.
- Deposit the minimum required authorized capital.
- Establish clear rules for risk management and develop AML/KYC policies.
- Identify and verify clients before setting up business relationships or for transactions exceeding a certain amount.
- Prepare and submit activity reports to the regulatory authority.
Is it necessary to contact the local tax authority in crypto activities on behalf of a Polish company?
How long does it take to obtain a cryptocurrency license in Poland?
What is the cost of obtaining a cryptocurrency license in Poland?
What is the minimum authorized capital for a virtual currency service provider?
Is it possible to deposit authorized capital in cryptocurrency?
When do you need to deposit capital to open a company and obtain a crypto license in Poland?
What are the penalties for operating a cryptocurrency business without a license in Poland?
Does a Polish crypto company have to appoint an AML Officer?
If a company conducts hundreds of transactions, the corresponding reporting requirements imposed on the company will also require a separate AML officer, Polish resident, and native speaker.
Due to the need for intensive interaction with the Polish Department of Financial Information (GIFI), such a person will be provided with access to the internal governmental system through which the submission of suspicious and non-standard reports will be conducted.
In case a company is not active or conducts 10-50 transactions per month, reports could be submitted in the English language by email and a separately designated person in Poland is not needed.
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