Belarus continues to be a favorable destination for the over-the-counter (OTC) foreign exchange industry, with the President of the country signing a document that will allow clients to trade FX without being taxed.
Specifically, Alexander Lukashenko, the President of the country, signed the Decree No. 503 “On Taxation,” which removes the ability to tax people trading forex indefinitely. The decree exempts individuals from paying income tax received from transactions with non-deliverable OTC financial instruments.
In March of 2016, the abolition of income tax for individual customers was proposed. Since then, the measure has been in place. However, it was only in a temporary capacity and renewed each year.
Speaking to Finance Magnates, Andrei Dziarnovich, the CEO RoboForex BY, said: “All market players are very receptive to a full cancellation of charging income tax from clients of forex companies. This suggests that the regulator is interested in developing this field and implementing the best global practices.
“The OTC Forex market has grown significantly recently. The number of licensed companies has more than doubled over the last three years and now equals 14. The speed of client base increase is more than 300% annually. The sum of their deposits has grown by 20 times over the same 3 years. The volume of their trading operations is also expanding: it has gone up by more than 10 times since 2016…
“This introduced regulation will allow us to execute earlier developed business plans to offer new products to the Company’s clients. In addition to that, we hope that all these factors taken together will make the Belarus jurisdiction more attractive to traders.”
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Brokers continue to head to Belarus
As Finance Magnates reported, more and more brokers are flocking to Belarus, particularly after Russia started to crack down on foreign brokers in the country. The attractiveness of Belarus stems from its close proximity to Russia but its more friendly regulation towards FX.
Commenting on the development, Alpari Eurasia Director Evgeny Novik said [translated]: “This initiative, of course, makes the Belarusian jurisdiction even more attractive for traders and investors from other countries of the world.”
“According to the data for the middle of the fourth quarter of 2019, the number of clients of the Belarusian jurisdiction has exceeded 23 thousand, and the number of non-residents in the total number of clients of forex companies was 64%.”
“With a high probability, according to the results of the past 2019, the number of clients on the Forex market in Belarus will confidently overcome the mark of 25 thousand people and will demonstrate more than one hundred percent growth compared to 2018.”
In addition, setting up shop in Belarus is considerably simpler than getting regulated somewhere in Europe. Still, it’s not as easy as opening a company in certain offshore destinations such as St Vincent and the Grenadines.
“This is a very important step towards the interests of traders, which speaks of a deep understanding of the market and the progressiveness of the tax system,” added Novik.
“As a result, the Belarusian jurisdiction continues to collect the best international experience and put it into practice – to combine high customer protection, favorable transaction conditions, and also take into account business interests. Thus, the Forex market in Belarus continues its successful, legitimate development and offers world-class services.”