Trusted Legal Expertise in Procuring Crypto License in Poland

Crypto-authorization process in the Poland Virtual Currency Registry

Getting a company listed in the national Polish Register of Activities in the Scope of Virtual Currencies requires following an authorization process, that we can break down into a few steps:

• Incorporation of a company
• Set-up of compliance (AML-CFT) systems, processes and policies
• Application for a VASP license with the Polish regulator
• Granting of the Polish crypto license

The process is nowadays streamlined, thanks to the comprehensiveness of the Polish laws and regulations. Especially for crafting all the necessary documentation pertaining to monitoring and reporting suspicious transactions.

The registration of Poland Company in Register of crypto currency companies

The crypto licensing process into the Poland Crypto Register is usually conducted with the assistance of legal experts having knowledge and experience of the regulations in place. As a reminder, the registration into the Register has the main purpose of ensuring that all companies dealing with cryptocurrencies are compliant with anti money laundering laws and procedures.

The Polish crypto registration process is a verification that everything is set in place for transaction monitoring. In other words, to overlook client activity and be able to identify a suspicious transaction. These systems shall not be based on human appreciation only, but also on available data.

Once identified, the applicant for the Polish crypto license has to be able to report the suspicious transactions to the competent authority.

Governmental Statements on Crypto in Poland

Polish institutions have officially expressed themselves on the subject of cryptocurrencies for the first time with the earlier mentioned AML Act (Polish only - reach out to us for a translation). It built the basis for companies and individuals willing to engage in crypto activities, as it defined the conditions and requirements to be met for companies willing to provide virtual assets services.

The Polish Financial Supervisory Authority issued its position on the issuance and trading of crypto assets in December 2020. This statement from the Ministry of Finance reinforced the basis provided by the AML law, as it further classifies crypto assets and how they shall be considered and regulated in the eyes of the regulator.

These two governmental statements, publicly available and unofficially translated to English (reach out to us for a translation), show the willingness of the Polish regulatory authorities to enable and encourage crypto activities. As long, of course, as it is operated in compliance with the necessary due diligence.

Requirements for companies engaged in crypto activities in Poland

Companies willing to successfully register as a provider of crypto asset services in Poland are expected to meet the following requirements:

• The activity is conducted by individuals who have not been sentenced for criminal charges (especially financial, fiscal and administrative offenses);
• The activity is conducted by individuals with knowledge or experience related to the virtual currency business;
• Systems and procedures in line with the AML Act, for identifying clients and monitoring transactions;
• Internal procedures in line with the AML Act;
• Policies and training material for employees in line with the AML Act;
• Appointment of a designated responsible person, whose duty is to implement all the elements listed above.

Naturally, the registration is also subject to more basic and general requirements, such as the need to have the ultimate beneficial owner of the company duly identified, to provide company documents (the company shall be of limited liability form), etc.

The process of setting up a company for a cryptocurrency business in Poland

Forming a company in Poland is a straightforward process. As Poland is one of the most liberal European economies, the formation of legal entities is very standard and usually doesn’t take more than a couple of weeks.

This means that the individuals or legal entities willing to incorporate a company in Poland shall prepare articles of incorporation, articles of association, provide identification documents, precise the legal address of the company and submit for creation.

It is not mandatory to incorporate a company in Poland to apply for a crypto currency license. What matters most, is that the requirements described in the paragraph above are respected.

Therefore, the Polish crypto license can be granted to a company registered in another country. Even though this is not something that is practiced very often we have experience in this. This is a theoretical statement though, as it may be virtually impossible for example to receive a license for a company registered in a tax haven jurisdiction. We recommend that if you wish to do so to do it only for a crypto company registered in the EU.

Taxation for cryptocurrency companies in Poland

The Polish Ministry of Finance distinguishes between two types of tax-generating activities, in the scope of cryptocurrency companies.

The corporate income tax applied to exchange services is the standard condition applied to limited liability companies. This is a two-leveled system:

• 9% for companies with revenue under 2 millions EUR (for the first two years of the company only);
• 19% as the standard corporate income tax.

Companies engaging in buying and selling of crypto assets are subject to a 19% income tax on interest generated by the disposal of cryptocurrencies for fiat. Note that financial services are not subject to VAT (Value Added Tax) in Poland.

Obligations for crypto companies in Poland

Once a company successfully registers as a cryptocurrency business, it is liable to answer to a few obligations. These mandatory ongoing requirements are in line with what is expected by the company, upon application to the crypto license in Poland.

The most important obligation is the appointment of a qualified AML officer, in a managerial position, whose role can be summarized to the conduct of the monitoring and reporting of suspicious transactions, as well as communication with the Polish authorities (GIIF).

The AML officer of the Polish licensed crypto company is therefore watching over the other obligatory requirements to operate within the law:

• Identification of the clients (so called KYC and KYB);
• Conduction of enhanced due diligence when required;
• Risk assessment;
• Reporting to the GIIF;
• Applying specific restrictive measures when relevant;
• Storage and protection of consumer data (as per GDPR);
• Training of all employees and board members on AML topics;
• Employee protection and privacy regarding transaction reporting.

As for any limited liability company in Poland, crypto businesses are liable to hold books and file monthly reports. In that regard, working with an accountant competent in the field of cryptocurrency is very important for proper bookkeeping and filing.

Sanctions for violating the obligations of a Polish crypto licensed company

It is naturally forbidden to conduct a crypto business in Poland without being properly registered. Any company undertaking an activity related to virtual assets without registration will be subject to a significant fine.

If a company is registered as a crypto licensed business in Poland, but fails to meet with the obligations described in the previous chapter, sanctions can arise up to 5.000.000 EUR or 10% of the company turnover.