REVIEW - Russian Entrepreneurs Suggest Creating Offshore 'Crypto Valley' In Country

REVIEW - Russian Entrepreneurs Suggest Creating Offshore 'Crypto Valley' in Country

The Russian business community has proposed creating offshore cryptocurrency centers in Russia, with the first two "crypto valleys" to be potentially based in the Kaliningrad Region and Primorsky Territory, where people who engage in economic activities could be exempt from paying taxes for three years.

MOSCOW (Pakistan Point News / Sputnik - 21st August, 2018) The Russian business community has proposed creating offshore cryptocurrency centers in Russia, with the first two "crypto valleys" to be potentially based in the Kaliningrad Region and Primorsky Territory, where people who engage in economic activities could be exempt from paying taxes for three years.

"It is necessary to use all the advantages that new technological solutions give us in all spheres of our states life as quickly as possible ... We propose to create a unique economic platform on the territory of the Russian Federation � the so-called Crypto Valley ... [and] experimental legislation will apply on this territory," so-called business patriotism association Avanti said in an address to senior Russian government officials, speakers of the Russian parliament's upper house and State Duma, the governor of the Kaliningrad Region and the acting governor of the Russian Far Eastern Primorsky Territory.

According to the entrepreneurs, a unique ecosystem would be created on the territory of this Crypto Valley that would help bring global experience in innovation to Russia within a short period of time.

"The best projects and their teams will come to us. Substantial funds will be poured into the economy and they will be invested in development and will return in the form of new jobs and taxes," the head of Avanti, Rakhman Yansukov, said in the document.

"The laws inside the Crypto Valley will be as loyal as possible, and within a few years we will be able to transfer a decision-making center on all matters of the technology development to the territory of Russia," the document stressed.

In addition, in order to stimulate the development of the domestic digital economy, the authors of the project proposed lifting all taxes on operations with cryptocurrencies and tokens, including their mining and exchange. They also proposed exemptions from income tax, value added tax and profits tax for all individuals and entities carrying out operations with cryptocurrencies and tokens in the Crypto Valley.

These tax and financial "vacations" are expected to be in place for three years, which would not only stimulate the development of cryptocurrencies and blockchain in Russia, but also help to shift the domestic economy toward innovative development approaches, including the expansion of human resource potential and becoming an investment magnet, the association noted.

"At the same time, the economics of projects that will have tax immunity must be built in a way to stimulate public revenue by attracting investments and taxes payments made by project partners � for example, banks or investment funds," the entrepreneurs explained.

KALININGRAD REGION AND PRIMORSKY TERRITORY

With regard to where the first potential area where the Crypto Valley could be located, businessmen have offered two administrative regions: the Kaliningrad Region and the Primorsky Territory. These regions were not chosen at random, since earlier in August, Russian President Vladimir Putin signed a package of laws on "domestic offshore centers" that gave them a preferential tax regime and special working conditions for foreign companies.

"The creation of the Crypto Valley in the Kaliningrad Region and Primorsky Territory ... will be a logical extension of our state leaderships activities dealing with foreign partners in an unstable geopolitical situation," the association stated.

According to the business community, the implementation of its innovative initiative would immediately move Russia into the ranks of the top countries for innovation, despite the presence of several prototypes in a number of other countries worldwide. The association recalled that in December 2017, entrepreneurs also proposed creating a national cryptocurrency, something which resulted in changes to Russian law.

The authors of the appeal also believed that the proposed new ecosystem would help to improve technology in Russia under the supervision and direction of the state.

"There is no common opinion about the role and status of the cryptocurrency in Russia today. On the one hand, the only legal tender for all transactions in the country is the ruble. However this does not prevent cryptocurrency exchange platforms from freely operating and having stable relationships with banks," the document said.

It seems that, in order to achieve a qualitative change in this situation, "tough, urgent measures are needed to create conditions for carrying out operations with cryptocurrencies for individuals and entities and conducting business using blockchain," the business community stated.

The authors of the proposal also said they felt that their plan would attract leading international experts and large-scale foreign investments, as well as ensure the advanced development of domestic information technologies.

"Active work in this direction will make it possible to turn Russia into the leading world power in the field of IT in the next 10 years," the businessmen reiterated.

The association said it was also ready to take an active part in the development of the relevant legal framework.