Crypto License in Poland

Obtaining a cryptocurrency license in Poland combines regulatory compliance with access to an expanding market and supportive environment, allowing licensed companies to successfully grow in the changing world of cryptocurrencies.

The main benefits of obtaining a cryptocurrency license in Poland:

Regulatory clarity
Although Poland’s cryptocurrency laws are still evolving, obtaining a cryptocurrency license provides clarity and legitimacy for cryptocurrency companies. This helps ensure compliance with applicable laws and regulations regarding virtual assets.

Access to the European market
As a member of the European Union (EU), Poland provides companies with access to the wider EU market. A cryptocurrency license from Poland can serve as an entry point for cryptocurrency transactions across the EU.

Relatively favorable legislation
Compared to some other EU countries, Poland’s cryptocurrency legislation is considered relatively friendly and flexible. The process of obtaining a license can be simpler and less stringent in terms of operational requirements and costs.

Lack of tax on cryptocurrency
There is no specific tax in Poland that applies exclusively to cryptocurrencies. Cryptocurrency companies operating in Poland are only required to pay already existing taxes depending on their legal structure. Also, Poland has double tax treaties with more than 80 countries.

The low corporate tax rate
The corporate income tax rate in Poland is 19%, but if annual income does not exceed €2 million, a rate of 9% applies

Ecosystem support
Poland is actively developing its fintech and cryptocurrency ecosystem, with increasing support from authorities and institutions. This emerging ecosystem can provide networking, collaboration, and partnership opportunities for licensed cryptocurrency companies.

Innovation and growth
The regulatory environment in Poland supports innovation in the cryptocurrency sector. Licensed companies can use this environment to stimulate growth, develop new products (services), and participate in the overall development of the cryptocurrency industry.

Attractiveness for investors
Having a cryptocurrency license can make companies more attractive to investors who value legal and regulatory compliance. It demonstrates a willingness to operate within legal structures, which can attract investment to expand and grow a business.

The basic requirements for obtaining a crypto license in Poland include:

Registering a legal entity in Poland

To obtain a Polish crypto license to provide cryptocurrency exchange and/or wallet services, a company (most commonly a limited liability company, Sp. z o.o.) must be established. The minimum authorized capital for a cryptocurrency company is 5,000 PLN (approximately $1,236).

Company registration can be done completely remotely, without personal presence. The process usually takes about 10 working days from the date of receipt of all required original documents. Information about the beneficial owners will be provided to the authorities.

Registered office or branch in Poland

A physical office is not required to operate legally. A company may have a virtual office address, which will be considered as its legal address.

Documented organizational structure

Currently, the minimum requirement for the company structure is one person who can simultaneously act as a shareholder, chairman of the board, and AML compliance officer.

Staff with the necessary knowledge and experience in virtual assets

Directors and founders must demonstrate that they have at least 1 year of experience in dealing with virtual currencies. If this requirement cannot be met, a course covering the legal and practical aspects of the virtual currencies business is required.

No criminal record of the company’s management

The absence of criminal records of the company’s management is confirmed by the issuance of a certificate by law enforcement agencies. This certificate certifies that the directors and founders have never been convicted of criminal or tax violations involving offenses against state and local government agencies, forgery, fraud, securities transactions, real estate violations, or any other crime committed for personal or financial gain.

Recruiting staffing for AML/CTF compliance requirements

Appropriate professional experience is required. We recommend utilizing third-party service providers for AML and related reporting requirements, such as hiring an AML Compliance Officer (MLCO) and an Anti-Money Laundering Reporting Officer (MLRO).

Implementation of internal procedures on risk management, AML/CTF, data protection

A company holding a crypto license in Poland is obliged to verify in detail and systematically all customers and transactions by AML/KYC regulations. The regulator has the right to request information about the company’s activities, especially in the context of compliance with pre-established AML/KYC policies. In case certain transaction thresholds are exceeded, the regulator must be additionally notified.

Poland has yet to implement a robust cryptocurrency licensing procedure with licensing and supervisory fees. Instead, the Chamber of Tax Administration continues to issue a Polish cryptocurrency permit, which is equivalent to a cryptocurrency license. The Polish cryptocurrency license confirms your business’ compliance with the AML/KYC requirements outlined in the Anti-Money Laundering Act of 2018. A company that plans to engage in economic activities related to cryptocurrency is required by law to register with the Registry of Virtual Currencies.

Four types of crypto-authorization are available in Poland for VASP companies dealing with virtual currencies:

• exchange of fiat currencies for cryptocurrencies;
• exchange of different cryptocurrencies among themselves;
• performing cryptocurrency exchange brokerage activities;
• provision and maintenance of cryptocurrency wallets.

The same company can obtain all four types of crypto-activity registration.

It is important to note that while the term “license” is often used to describe the underlying regulatory mechanisms, Poland provides an activity registration to operate as a regulated VASP, rather than a financial license in the usual sense.

Companies that fail to register before commencing their cryptocurrency activities can be fined 100,000 PLN (approximately $24,720). Before proceeding with the mandatory crypto-authorization procedure, cryptocurrency companies must ensure that they meet specific legal requirements. For more information, please consult Fast Offshore Licenses’ lawyers.

Before starting operations in Poland, each cryptocurrency company must undergo a crypto authorization procedure to register with the Registry of Virtual Currencies.

The application should be submitted exclusively in electronic format via the Electronic Public Administration Services Platform (ePUAP). It must be accurate and contain all necessary documentation. If all conditions are met, the Tax Administration Chamber will enter the company in the Register of Virtual Currencies within 14 days of receipt of the application. If errors are found, it is allowed to apply correction, but this may slow down the review process.

The main steps in applying for entry in the Registry are:

• receipt of the application;
• verification of data;
• entry in the Register or issuance of a refusal decision.

The list of documents to apply for the entry of a cryptocurrency company in the Registry of Virtual Currencies in Poland includes:

• company documents (extract from the register of companies or constituent documents confirming the company’s right to operate);
• documents of directors and founders (copies of passports or identity cards of directors and founders, as well as documents confirming the absence of criminal records);
• documents on the financial condition of the company (financial statements or other documents confirming the financial stability of the company);
• documents on the company’s activities (description of the company’s activities, including information on what cryptocurrency exchange or cryptocurrency wallet services it provides);
• documents confirming compliance with AML/KYC requirements.

You can check the full list of documents with Fast Offshore Licenses lawyers.

The main stages of the application process:

• preparation by the applicant of documentation confirming compliance with legal requirements for conducting activities in the field of virtual currencies.
• preparation of documentation by the applicant in the absence of a criminal record.
• filling in and applying the ePUAP electronic platform.
• payment of stamp duty of PLN 606 (approximately $150) at the time of application (proof of payment must be attached to the application).

The decision to refuse to include an entry in the Register of Virtual Currencies cannot be challenged, but a new application can be submitted for reconsideration.

To date, the Polish regulator has not established the need to pay regular supervision fees for companies dealing with virtual currencies in Poland.

The Polish Financial Supervision Authority (PUF) plays a crucial role in maintaining the stability and prosperity of the Polish financial market. PUF supervises the activities of financial institutions such as banks, insurance companies, and investment funds to ensure their compliance with applicable legislation and consumer protection. In addition, the Authority drafts and adopts regulations governing the activities of financial institutions and the market as a whole, and protects investors’ rights through monitoring the activities of financial institutions and investigating fraud or unfair practices.

Today, the cryptocurrency business is officially categorized as a separate regulated area, which is overseen by the Chamber of Tax Administration. This organization maintains a registry of cryptocurrency activities called the Registry of Virtual Currencies.

Cryptocurrency companies operating in Poland are supported through the following initiatives:

1. Chamber of Commerce of Blockchain and New Technologies, which represents the interests of the industry by the current Polish legislation.
2. Innovation Center. In the Innovation Center, the supervisory authority advises fintech companies and provides virtual platforms for the development of new startups in the field.

The main piece of legislation regulating anti-money laundering and countering the financing of terrorism in the Polish cryptocurrency and other financial markets is the Act of March 1, 2018, on Combating Money Laundering and Financing of Terrorism, also known as the Polish AML Law. This law is one of the first in Poland to define the specific term “virtual currencies” in the context of anti-money laundering and to establish their regulation in the country.

Under this law, virtual currency activities do not require a special permit or license, as may be the case in other European Union countries, where a lengthy licensing process is required. Instead, Poland must notify and record such activities in the register of virtual currency activities. The Polish VASP license is not a license in the usual sense, but a notification and entry procedure in the relevant register.

According to Polish law, no specific rules for the protection of cryptocurrency consumers have yet been established, nor has the regulation of competition about cryptocurrencies. However, like other market participants, businesses dealing with cryptocurrency are obliged to comply with general legislation:

• Law of May 30, 2014, on consumer rights;
• Law of February 16, 2007, on competition and consumer protection;
• Law of August 23, 2007, against unfair commercial practices;
• Law of April 16, 1993, on combating unfair competition.

For example, this means that businesses dealing with cryptocurrency must take into account a consumer’s right to withdraw from a contract in cases under the Consumer Rights Act.

Cryptocurrency regulation is actively developing in the European Union, including Poland. It is therefore crucial to keep abreast of the rapidly evolving European legal framework that is emerging to regulate cryptocurrency business in the EU and beyond.

For example, in 2022, the Committee on Economic and Monetary Affairs adopted the Markets in Cryptoassets Regulation (MiCA) for a vote of the European Parliament and EU members. The MiCA regulation aims to prevent market abuse and prohibits and regulates market manipulation, illegal disclosure of insider information, and insider trading. The European Commission is currently drafting new KYC requirements for crypto businesses that would restrict virtual currency companies from conducting transactions with unmanaged wallets without first verifying the identity of their owners. The Commission has also proposed to abolish the current 1,000 euro (about $1,070) threshold, meaning that all crypto transfers will be subject to KYC procedures in the future.

In Poland, there is no specific tax applicable exclusively to cryptocurrencies. However, cryptocurrency companies operating in the country are obliged to pay various already existing taxes depending on their legal structure. In some cases, a company may be exempted from paying certain taxes thanks to double tax treaties in force between Poland and more than 80 other countries.

The main taxes that apply to a limited liability company in Poland include:

• corporate income tax, the rate of which is 19%, but if annual income does not exceed €2 million, a rate of 9% applies;
• personal income tax – rates vary from 17% to 32% depending on the level of taxable income;
  VAT – 23%;
• dividend tax – 19%.

In addition, like any other employer, a VC company is obliged to pay social security and health insurance contributions to the Polish government when employing individuals.

The following points should be considered when paying corporate income tax in Poland:

1. Income derived from the exchange of virtual currency for legal tender, goods, services, or property rights that are distinct from virtual currency, or the fulfillment of other obligations using virtual currency, is treated as income from capital gains.
2. The value of virtual currency received as a result of an exchange for another virtual currency is not considered revenue.
3. Costs associated with the exchange of virtual currency for another virtual currency are not considered to be revenue expenditures, nor are revenues from such transactions considered to be revenue.
4. Income from the transfer of virtual currencies is defined as the difference between the total income received from the reimbursable transfer of virtual currencies and the cost of generating this income in the current tax year.
5. To benefit from a preferential tax rate or exemption from tax under the relevant double tax treaty, documentary evidence of the taxpayer’s location for tax purposes in the form of a residence certificate issued by the tax authority must be provided.

At the end of the tax year corresponding to the calendar year, the taxpayer should include in the tax return the income received for that tax year from the transfer of virtual currencies and calculate the relevant income tax.