Jurisdictions in Eastern and Central Europe are quickly enhancing the sector of FinTech, thus possessing themselves as a bright marketplace for the virtual assets’ exchange companies. Almost a decade ago, in 2014, the Polish government rejected the recognition of Bitcoin as a currency but stated that contracts on the grounds of its index were completely developed monetary tools, under the regulation. Crypto coins, though not formally determined, are not deemed equivalent to fiat currency, but their circulation is legally allowed in Poland. Hence, mining and selling-buying crypto tools are deemed as a non-restricted type of operation. This is the reason why cryptocurrency exchange companies in Poland is increasingly growing.
Overview of Polish regulatory framework
To establish a crypto exchange in Poland, business persons should pass a registration procedure with agencies and obtain a license for operation. In 2017, crypto coins trading, exchanging, and mining were regarded as identical to financial intermediation – a set of operations in which an agent incurs responsibility on its account for the purpose of acquiring assets by participating in payments on the market; a financial intermediary directs funds from sellers to buyers. Entities can legally conduct their activities, however, they are obliged to acquire licenses for crypto dealing (the Polish PKD code is 64.19.Z – Other financial intermediation).
Licensing a virtual currency business in Poland
As Poland is an EU state, aside from the state regulative framework, applicable are also EU obligations. The jurisdiction belongs to the Schengen zone, that`s why being compliant with the EU Directive obligations will be mandatory to capture the share of the EU market. Hence, to obtain legal permission for dealing with virtual currency, a crypto exchange in Poland must do the following:
- to form a company with a correct organizational and legal form – a closed and open LLC, Sp. Z o. o. (Spółka z ograniczoną odpowiedzialnością) and S.A. (Spółka Akcyjna) will be a perfect fit for non-residents subject to the spectra of intended operations;
- to set up a commercial account in a Polish bank and contribute an initial capital – it is required that at the time of forming an entity pays a complete sum – 100%;
- to hire personnel and senior management with relevant expertise and education in the economical sector;
- to develop policies and procedures for executing AML obligations, Know Your Client requirements, etc;
- to draw up a plan for the coming few years, and prepare documents on all operational structures applied for exchange activities.
In a brief – it is mandatory to create a clearly defined framework for the crypto exchange company’s activity to evidence its good conduct and duly organized operations. It should be taken into account that there is also a plethora of local aspects that are also essential to be learned. For example, authorities necessitate that businesses and holders declare crypto-related incomes apart from other incomes.
Support of Eternity Law International at all stages of setting up a business
Lawyers of Eternity Law International will assist with the opening of an company in Poland and acquiring a license for dealing with cryptocoins. The company provides clients with legal and organizational support, offers advisory services, chooses the best-working option of operation, and a beneficial taxation model. Our lawyers will ensure the package of documents for registration and licensing as well as related formal papers are well-prepared and ready for the application to authorities. Please contact us for obtaining more explicit recommendations and options for your business purposes.
If you have any questions or intend to open crypto company in this jurisdiction, contact us. Our experts have a huge expertise in buying and selling businesses, as well as licensing.
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