What are some of the world’s most crypto-friendly countries? The crypto world, on the other hand, is both exciting and dynamic. It offers a new form of individual empowerment that is not subject to the control or oversight of central authorities.
This does, however, imply that those who participate in the crypto space are subject to different regulations depending on their country’s stance on digital assets. In some countries, cryptocurrency use is outright prohibited, whereas, in others, it is a thriving industry that the authorities have embraced.
This article lists ten countries where Bitcoin and other cryptocurrencies are accepted as payment or have lax regulatory oversight for investors. Continue reading!
1. El Salvador
El Salvador has become the world’s first country to accept Bitcoin as legal tender. El Salvador’s government claims that the move will provide many of the country’s citizens with access to banking services for the first time. Furthermore, trading in cryptocurrency will save the country approximately $400 million in fees levied by banks and financial institutions on money sent home by expats.
El Salvador’s president announced that the country had purchased its first 400 Bitcoins. The Bitcoins were purchased in two tranches of 200 each. President has even promised that more cryptocurrency will be introduced into the country.
Switzerland is Europe’s crypto-valley and an innovation hotspot. In terms of taxation, the Swiss Federal Tax Administration considers cryptocurrency transactions to be the same as traditional fiat transactions and exempts them from tax reporting.
Cryptocurrency investors prefer Switzerland because of the lack of taxation on profits from crypto trading. Ethereum, Tezos, and the Diem Association are among the major crypto foundations that have chosen Switzerland as their home.
However, profits from crypto businesses and professional trading are subject to income taxation, which varies by region, as well as an annual wealth tax.
Germany is one of the most crypto-friendly countries in the world, as it is one of the few crypto-tax-free jurisdictions. In contrast to the EU, Germany has a unique approach to crypto taxation that encourages individual investors. The laws exempt bitcoin and other cryptocurrencies from capital gains tax if held for more than a year. If you exchange the funds for fiat or other cryptos within one year, you are still exempt from paying tax if your profit is less than €600 ( $700). Investors must report their income for tax purposes if their gains exceed the limit. Businesses, on the other hand, must report and pay corporate income taxes on crypto gains, and it works in the same way as any other asset.
Singapore, known as one of the world’s most developed economies, is also one of the best places to do business. The country is very pro-crypto and has passed a number of laws to support it. As a result, Singapore continues to attract cryptocurrency organizations and investors.
Singapore has no capital gains tax. Individual and corporate cryptocurrency funds are not subject to taxation. However, if a Singapore-based company operates as a crypto trading company or accepts crypto payments, it is subject to income tax.
Bitcoin is classified as intangible property rather than legal tender. The laws regard cryptocurrency payments as barter trades. It levies taxes on goods and services but not on payment tokens.
The famous blockchain island of Europe, which is home to many crypto and blockchain companies, has many laws that favor crypto investors and entrepreneurs.
Overseas companies operating in Malta, as well as foreign residents, benefit from a number of advantages. Long-term investments in digital currencies are exempt from income and capital gains tax in Malta.
Crypto trades, on the other hand, are taxed at 35% because they are legally defined as stock trading. This, too, can be reduced to 0–5% if you take advantage of the country’s financial system’s structuring options. Bitcoin and other financial tokens are regarded as distinct assets in Malta. Financial tokens can be dividends, interest, or premiums, and they are subject to regular income tax.
We can’t discuss crypto-friendly countries without mentioning Portugal.
The tax authorities in Portugal have chosen to take a softer stance on cryptocurrency investment. The Portuguese legal system is well-known for being cryptocurrency-friendly. Individuals in Portugal who profit from the purchase and sale of cryptocurrency do not pay capital gains tax. Furthermore, the exchange of cryptocurrency for other currencies is tax-free.
Slovenia is another small European country with an appealing digital asset taxation system. The country’s legislators are still working on a legal framework that will make tax law clear to all individuals and businesses interested in doing business there.
Slovenia exempts individuals from capital gains tax when they sell bitcoin because the gains are not considered income. Companies that receive cryptocurrency payments are subject to corporate income tax. ICOs are subject to taxation as well. Slovenia does not permit businesses to conduct solely cryptocurrency transactions, such as accepting bitcoin as the only form of payment.
Other commercial activities involving cryptocurrency, such as cryptocurrency mining, are subject to a 25% income tax.
Bermuda is a popular destination for cryptocurrency holders because it has comparatively favorable standards in comparison to other financial regimes around the world. Bermuda issued the Digital Asset Business Act in 2018, which serves as the country’s digital asset regulations. Bermuda is well-known for its lack of income and capital gains taxes, and crypto transactions are no exception.
Bermuda is a popular destination for cryptocurrency investors because it was the first country in the world to accept taxes and fees in cryptocurrency. Bermuda accepts USD Coin payments for governmental services as of October 2019.
Belarus’ president, Alexander Lukashenko, wishes to transform the country into a crypto-based digital economy. As a result, he signed a new law legalizing cryptocurrencies in 2017. The same decree exempts companies and individuals from cryptocurrency taxes until 2023 when the law will be reviewed.
Mining and cryptocurrency investments are exempt from income and capital gains taxes. Belarus wants to boost technological innovation, and it is one of the world’s most crypto-friendly countries in terms of the legal framework and crypto trading.
The country has taken a welcoming and progressive stance on digital currency, making it a hotbed for Bitcoin miners. The Georgian government recognizes cryptocurrency as property rather than legal tender but encourages its citizens to use blockchain technology because they believe it will lead to economic prosperity in the future.
The Ministry of Finance even offers preferential tax rates in order to entice more investors to enter their borders.
To summarise, there are many Bitcoin-friendly countries around the world where you can consider investing your money if you want to use this financial technology – but not all of them will be ideal for every individual or company.
Before deciding how to invest in cryptocurrencies, it is critical to conduct thorough research because each country has different regulations on trading crypto assets, which affect how it interacts with fiat currencies such as USD, EUR, and GBP.