Poland’s Cryptocurrency License

Eastern European countries are quickly strengthening bitcoin laws, making them an attractive market for blockchain and non-fiat fund exchange operations. In 2014, the Polish government declined to recognize Bitcoin as a currency but stated that contracts based on its fundamental index were full-fledged financial products subject to standard regulations. Cryptocurrencies, while not officially defined, are not equated with fiat money and are lawfully circulated in the country. Mining, sales, and purchases of crypto instruments are not forbidden.

Entrepreneurs must be registered with government organizations and licensed in order to operate a digital exchange business. Since 2017, the state's public statistical office has equated cryptocurrency trading, cryptocurrency exchange companies, and mining to financial intermediation. Firms can formally operate the company, but they must get cryptocurrency licenses (its code is PKD 64.19.Z – Other financial intermediation). If the platform is designed for individual exchange transactions, it is not the same as exchanges or brokers. There is no need for any special license in the development of a cryptocurrency exchange company.

Crypto exchange license in Poland

Poland provides a controlled legal framework for virtual asset service provider (VASP) enterprises, with legislation in effect since November 2021. Warsaw, Poland's capital, is the seventh-most populated capital city in the European Union. In comparison to its neighboring crypto license destinations Estonia and Lithuania, Polish rules are more flexible in terms of the setup procedure and come at a cheaper ongoing cost because there is no special necessity for on-site compliance experts.

There are four different types of crypto authorizations available in Poland for VASP businesses using virtual currencies:

1. Providers of an exchange service: A) crypto vs fiat and vice versa; B) crypto versus crypto; and C) brokerage services for the former. Official activity authorization for services involving the exchange of fiat for crypto, crypto for fiat, and crypto for crypto. Such activity registration allows for the safe operation of a cryptocurrency exchange.
2. Service providers for virtual (crypto) currency wallets . The term "virtual currency wallet service" refers to a service that generates keys for consumers or stores their encrypted keys for the purpose of maintaining, storing, and transferring virtual currencies.

All four crypto activity registrations can be held by a single firm. It is crucial to highlight that, while the term "license" is commonly used to characterize the underlying capabilities of the law, Poland offers an activity registration to operate as a regulated VASP rather than a financial license per se. The usual time for a regulator to assess an application is 2-4 weeks, but the preparations for a successful submission should be expected to take a similar length of time.

Prerequisites for those planning cryptocurrency-related activity

According to the additional features included by the "AML Law," which went into force on November 1st, 2021.

There are two major conditions:

Competence and Credibility:

Anyone who desires to run a business in the field of virtual currency trading should be informed or have expertise in this industry. This criterion can be satisfied in two ways:

• Taking a course or receiving instruction on virtual currency's practical and legal challenges;
• Completing at least one year of employment, which is at least one year of involvement in virtual currency, as proven by the necessary documentation

No felony convictions:

The owners and managers of a cryptocurrency company in Poland must demonstrate that they do not have any criminal convictions in the categories of taxation, related to the work of local and state authorities in relation to justice, the credibility of documents, the flow of economic activity, the property interest, and cash flows. The individual in question must produce an official police certification.

General Requirements for registering the crypto company in Poland

• A minimum of one stakeholder (natural person or corporate entity). There are no limitations on citizenship or residency.
• At least one member of the management board (can be the same as the shareholder, but only a natural person). There are no limits on citizenship or residence for foreign residents. Professional knowledge in the field of virtual currency is required. PESEL and Trusted Profile are required.
• As a corporate location, a virtual office address is permitted. The identities of the beneficial owners are revealed to the authorities.

NOTE: Apostilled registration paperwork is available for an extra fee:

• An excerpt from the State Register in Polish with a 350 euro apostille
• A chart in Polish with an apostille for 350 euros.

How can I obtain a cryptocurrency license in Poland?

If you want to do business in the cryptocurrency industry, you must register your company as a virtual asset service provider, which is its principal business activity. To finish the process of registering your firm, you must accomplish the following:

• Establish a physical address in the country;
• Send in the necessary documents for the company as well as important staff.
• Place the company's permitted capital in the corporate bank account;
• Create AML and KYC regulations, as well as explicit standards for risk assessment and management.

When doing business in the country, you must also retain and verify customer IDs and submit reports to the appropriate regulatory organizations.

How to register a Cryptocurrency Company in Poland?

• A unique name must be registered for the new business.
• The firm must be registered with the CEIDG (Central Register of Economic Activity) and the KRS (National Court Register).
• For various legal and organizational forms of business, rules are set on the minimum permissible capital and the management structure.
• If you register on the internet, your signature must be electronically signed, and you must also have a trusted profile on the ePUAP's government services.
• In the near future, electronic identification will be required to enable remote administration of duties including coordinating correspondence with state administrative officers like the tax office and ZUS (Social Security Administration).
• A limited liability company is the best business structure for foreigners in Poland. Other types of identification are not available to all foreigners.
• It is required to appropriately determine the codes of activities according to the classifier - PKD (Polska Klasyfikacja Dziaalnoci) when forming a firm.
• The memorandum of association might specify any number of different categories of activity (analog of the charter). In the future, you must choose 10 of the codes given in the KRS company registry.
• The minimum allowable capital for an LLC in Poland is PLN 5,000. In Poland, the authorized capital of an LLC is regarded to be constituted at the time of signing the memorandum of association.
• After registering a company, it is important to create a bank account for it.
• Within seven working days after registration, information on the final beneficiaries must be submitted to a special registry. Failure to comply with this requirement may result in a punishment of up to PLN 1 million.
• Within twenty-one days from the date of registration, the completed NIP-8 form should be given to the tax office at the location of registration, which contains information about the bank account and accounting of the firm.

Poland's taxation system

In Poland, businesses and individuals must pay the following taxes:

• CIT (Company Incom Tax), corporate income tax - 9% if current year sales do not exceed the equivalent of 2 million euros, and 19% if sales are greater.
• VAT (Value Added Tax) - the base rate of 23%.
• PIT (Personal Income Tax), depending on the method of taxation and earnings in the fiscal year, personal income tax is 17%, 19%, or 32%.
• Dividend TAX, dividend tax - 19% for residents, and non-residents, see Tax Treaties, the existence of tax treaties between nations.
• Withholding tax and income repatriation tax range from 0% to 20%.

When legally recruiting employees in the firm, the employer is required to pay the following payments to health and social insurance, as well as the pension fund, totaling 60% of the total net.

In Poland, it is critical to preserve accounting records and file tax returns: VAT returns are due either monthly or quarterly. The CIT declaration is made once a year. Tax payments for advance are done monthly or quarterly.

Every year, financial statements are distributed. The normal guideline is that accounts payable services to a company in Poland begin at 150 EUR per month.

Benefits of Crypto Company in Poland

• Poland is establishing cryptocurrency businesses more quickly than other EU countries.
• It is simpler to obtain a Polish cryptocurrency license, avoiding more complicated licensing procedures in other EU member states.
• Poland has dual tax arrangements with many countries. For international investors, building a branch in Poland promises huge rewards.
• Poland has an extremely low corporation tax rate.
• You can create a bank account with your Polish crypto firm using the banking services supplied by any bank or EMI registered in the EEA.
• The minimal capital needed is merely PLN 5,000. (approximately EUR 1,100). Currently, cryptocurrency enterprises are not now part of the regulated financial markets, they are not subject to routine financial monitoring or audits.

Winding Up

Poland is currently one of the countries where legal restrictions on cryptocurrency-related activities are in place.

While Poland does not currently grant cryptocurrency licenses, the procedure known as crypto-authorization, which registers a company in a separate register of businesses that deal with virtual currency, can be used to substitute them.

If you still have questions about how to get a crypto license in Poland, you can approach a cryptocurrency exchange development company that is here to assist you at every stage of the process.