The government of Belarus has used a very interesting strategy in order to make the popularity of Bitcoin grow in the country, which acted as a boost for its tech sector.
According to ZDNet, people who worked closely with the president of the country, Alexander Lukashenko, have affirmed that he drafted several pro-crypto laws in order to make foreign companies receive tax benefits.
This has been used as a bait to call companies to the country. A lawyer called Dennis Aleinikov, which helped the government to create some o the bills, has affirmed that the president wanted to boost the global presence of the local tech industry.
As he was not able to run a “viral campaign” due to a lack of budget, the decision to use the Bitcoin boom which was happening two years ago.
The idea was to use Bitcoin to promote the sector. Companies would have tax-free access to the country and 35 kinds of tech companies would be benefited from the measure
According to the press secretary Dmitry Titov, the measures would include zero percent VAT, zero percent profit tax from the corporations, taxes on salary shares, zero customs duty, etc. Companies would basically receive all possible tax benefits if they went to the country. These measures would last until 2049.
This was all being decided during December 2017, when cryptocurrencies were peaking in value. Even Initial Coin Offerings (ICOs) were quickly legalized in the country. Companies could issue tokens and trade cryptos free of taxes until 2023.
Basically, the master plan was to use Bitcoin as a marketing ploy that would attract new companies to the country, which could boost the economy of a country which was facing a hard time.
Shady Companies Used Belarus’ Good Will
Unfortunately, opening up the country to literally any eager company can obviously cause quite some trouble. What ended up happening is that several companies used the country to launch ICOs… and they utterly failed.
85% of the ICOs made in 2017 and 2018 failed. Most companies had big dreams and plans but no real idea of what they were doing. This is why global regulators are so afraid of ICOs. Most companies actually fail to provide even the minimum value.
A good example was Relex Development, a crypto company focused on the real estate market. The company received a license to operate in Belarus at the same time that it was being accused of insider trading by the community.
This way, Belarus could have turned into a haven of shady companies who used the goodwill of the country to set up fraudulent operations.
Despite All The Issues, It Worked
The most important point is that this has all actually worked pretty well in the end. Despite having some undeniably bad projects, the country has seen a boost in both its economy and has several interesting companies based on it.
For instance, Currency.com, a tokenized securities exchange, is set in the country and it seems to be doing fine for now. The company’s platform can be used to connect crypto investors to stocks.
Other companies like Intellectsoft, CopPay, OpenLedger DEX and Smartym Pro are all companies which are offering legal and solid services and are based in the country.
The friendly regulation strategy has attracted companies from other sectors as well and now Belarus has tech companies from the fields of robotics, space, telecom, machine learning and more. Over 260 companies have set up shop in the country last year, which made the country get a lot of money indirectly.