While blockchain technology is gaining traction around the world, some countries are more accepting of it than others. Below is our list of the top 20 crypto-friendly countries for investors, traders, and blockchain-driven businesses.
Malta is positioning itself to be one of the most crypto-friendly countries in Europe. The world’s largest crypto exchange by volume, Binance, recently announced that it’s moving its headquarters to the Mediterranean country. What’s more, due to Malta’s flexible immigration policy, it’s expected to become a top country for blockchain startups and crypto-aligned businesses.
- Malta has some of the most relaxed tax laws regarding cryptocurrency. Foreign residents don’t pay income tax on foreign capital gains, even when that money is stored in Maltese bank accounts. Unless this law changes in the future, this includes cryptocurrency earnings as well.
- The government-backed Malta Digital Innovation Authority aims to regulate cryptocurrency and blockchain businesses in a way that’s favorable to all parties. This framework also aims to improve security and the verification process for all crypto users.
- The country’s Prime Minister recognizes blockchain technology’s potential and has welcomed the industry, citing Malta as becoming the “global trailblazer” in the regulation of blockchain business and fintech.
- Bittrex’s international platform based in Malta will give all countries except the United States access to international markets.
Poised to become the “Blockchain Island,” Malta has already attracted a number of investors and companies looking to gain a foothold in its crypto-friendly economy. As Malta continues to position itself as the country for cryptocurrency, the amount of blockchain businesses is expected to increase over time.
Thanks to its favorable tax laws and island lifestyle, Bermuda has attracted wealthy individuals and enterprise-level corporations from around the world, including Google. This is a trend that doesn’t seem to change with the introduction of the blockchain industry.
- Low taxes. No VAT and no capital gains, income, and corporate taxes. Payroll tax is also low, capping out around 10%.
- Bermuda’s relaxed taxation policy also applies to cryptocurrencies, which are currently tax-free because they’re not recognized as legal tender.
- The Bermuda Monetary Authority (BMA) has announced a plan to regulate virtual currencies in its whitepaper, the Virtual Currency Business Act (VCBA). This move aims to reduce money laundering while creating a friendly environment for cryptocurrency businesses and startups.
- Bermudan companies launching ICOs will receive special attention from the Minister of Finance and will have to require prior approval before operating in the country. They’ll also be required to implement mandatory KYC measures.
- Binance invested $15 million in Bermuda in 2018.
Bermuda is clearly interested in capitalizing on blockchain technology by making the country a welcoming place for new and established businesses. With that said, participating companies will be required to work with the government in order to operate in the country.
Switzerland is another country that appears interested in embracing blockchain technology and cryptocurrency, but it’s not a tax-free haven like Bermuda. While Swiss investors and traders are required to declare their crypto holdings and are subject to the country’s tax laws, only professional traders are required to pay capital gains tax on cryptocurrency. What’s more, miners and employees paid in cryptocurrency are required to pay income taxes on their holdings.
- ICOs in Switzerland are regarded as securities and regulated by the Swiss Financial Market Supervisory Authority.
- Companies operating with cryptocurrency are required to comply with the country’s anti-money laundering laws.
- In 2017, the online bank, Swissquote, launched a financial platform allowing users to store money in USD and Bitcoin. Around the same time, Falcon Private Bank and Bank Frick also announced they’ll be trading cryptocurrency for fiat.
- Several other major Swiss financial institutions have also committed to offering cryptocurrency options to their users.
In short, Switzerland’s financial sector doesn’t only see the value in cryptocurrency, they actively embrace it. Since positioning themselves as a crypto-friendly country, more than 200 blockchain companies have registered in Switzerland. Only 18 of those countries failed to raise the funds needed to operate in the country.
Since 2011, Gibraltar has had a 10% corporate tax rate that’s attracted a number of companies. The country is currently working on legislation surrounding cryptocurrency businesses in hopes of clearing up any confusion and hopefully attracting more tech-driven businesses.
- In January 2018, Gibraltar started issuing licenses to crypto companies operating in the region.
- The government and the University of Gibraltar have partnered to create an advisory group that focuses on the development of blockchain technology. This initiative is called the New Technologies in Education (NTiE) and has been working with leading fintech companies with blockchain coding, smart contracts, and more.
The government recently launched the Gibraltar Associations for New Technologies (GANT), which is in charge of promoting blockchain adoption across the entire country. Overall, Gibraltar’s official stance on blockchain and cryptocurrency is positive and sets the country up to become a major player in the industry. With that said, there’s also a degree of uncertainty surrounding Gibraltar’s future as the nation will also leave the EU if Brexit finalizes.
Cryptocurrencies in Slovenia are classified as virtual currencies. As such, they’re not taxed as money or as a security. Bitcoin trading isn’t taxed under income tax laws, but businesses paid in cryptocurrency and miners are required to pay income tax on their earnings. Moreover, cryptocurrency is exempt from capital gains tax, but crypto companies are required to pay corporate tax.
- Slovenia’s Prime Minister has launched a campaign to make the country more blockchain friendly, turning Slovenia into the “most recognized blockchain destination in the European Union.”
- Not only is the government working with private businesses to expand the application of blockchain technology, they’re also looking at how it can be used in the private sector.
Slovenia also launched the Blockchain Think Tank, part of their Digital Coalition, to help the country become more familiar with blockchain technology and its applications.
Singapore has announced that long-term Bitcoin investments aren’t subject to capital gains tax. What’s more, the government is looking regulate Bitcoin the same as it does other monetary services.
- The Singaporean government has announced financial incentives to companies that help grow the domestic blockchain ecosystem.
Essentially, Singapore is interested in growing its blockchain community. As such, the government is offering businesses in Media and Information and Communications Technology (ICT) seed funding for meeting government expansion goals and connecting Singapore with tech communities around the world.
Estonia has been a popular tech haven for some time, and cryptocurrency is no different. Because crypto is seen as an alternative currency and not a security, it’s classified as property and isn’t subject to VAT. With that said, crypto holdings are subject to income tax and might also be subject to capital gains and social tax in some situations as well.
Still, Estonia has become a popular crypto country for a number of reasons.
- Estonia’s e-residency scheme makes it easy for foreign nationals to bank in the country and throughout Europe.
- Its crypto-friendly attitude makes Estonia a great entry point into the European market.
- The cost of opening a Bitcoin-based business in the country is cheap, costing roughly €8,000.
Moreover, Estonia’s banking sector has also embraced cryptocurrency and has even issued blockchain-based wallets for specific tokens.
Georgia is a favorite thanks to low taxes and the government’s friendly stance towards cryptocurrency, which aims to attract investors. According to the co-founder of Spotcoin, a local crypto business, Georgia will likely regulate cryptocurrency in a way that many expect to benefit the industry.
- The government has a close relationship with Bitfury, a large group of Bitcoin miners.
- The Georgian government was the first national government to ever use Bitcoin to validate and secure official actions. This comes after a program to use blockchain for buying and selling land in the country.
Georgia has also started using blockchain to secure and track government records more efficiently, covering everything from mortgages, notary services, and land titles.
Belarus has waived taxes on all transactions using cryptocurrency and crypto-based income until January 2023. That means individuals mining, trading crypto, and using crypto to buy good and services aren’t subject to taxation. This also applies to gifts and inheritances using cryptocurrency, and this major tax break applies to businesses as well as individuals.
- Cryptocurrency isn’t regarded as legal tender.
- Foreign IT specialists are granted 180 days visa-free.
- The country’s national bank gave local banks the authority to use blockchain for recording agreements between banks and the state.
- Belarus’ central bank is currently exploring ways to use blockchain to manage its currency and stock exchanges.
Belarus is also home to the first-ever fully-functional platform for trading tokenized securities, which was launched by Currency.com—a blockchain tech company located in Belarus. Moreover, in June 2018, the country’s President, Alexander Lukashenko, signed a landmark bill making Belarus the first country with a comprehensive framework regulating blockchain businesses.
10. Hong Kong
The Hong Kong government is exploring ways to integrate blockchain technology into trade financing systems. Moreover, Secretary for Financial Services and Treasury, James Henry Lau, recently expressed interest in using blockchain to reduce some of the burden and resources associated with trade and financing.
- Hong Kong is described as having reliable, hands-off cryptocurrency regulations that are clear and easy to understand.
- The government is currently exploring a number of blockchain-driven finance projects. One of its latest projects uses blockchain to digitize contracts and minimize fraud.
- Hong Kong has partnered with Singapore to expand blockchain-based projects between the two countries’ financial institutions.
Hong Kong is also home to various offices of top crypto exchanges, including BitMEX and the local exchange, Coinsuper. Widely regarded as a top Asian financial hub, Hong Kong is a very attractive location for blockchain companies.
Japan is currently in the top-three largest Bitcoin economies, and is one of the global leaders in cryptocurrency acceptance and regulation. Due to its optimistic nature with technology, Japan is regarded to be a top country for crypto acceptance.
- Crypto transactions are taxed only when buying and selling goods, or selling cryptocurrency for profit.
- Bitcoin was declared legal tender in 2017, and no longer faced as consumption tax as a result.
- Japan’s Virtual Currency Act was launched in 2017 as a way to govern security and capital requirements on exchanges.
- Japan’s largest bank, MUFG, is working to launch its own cryptocurrency exchange.
More than 3.5 million individuals in Japan are currently trading and using cryptocurrency in their everyday lives.
Germany has been a crypto-friendly country since 2013, when it classified Bitcoin as a “unit of account,” which recognized Bitcoin and other cryptocurrencies as legitimate currency for taxation and trading. What’s more, in 2018, the country’s National Tourist Board went as far as to approve Bitcoin as an acceptable method of payment.
- No capital gain tax for investors who hold cryptocurrency for a year or longer before selling.
- The German securities bank partnered with Solaris Bank to launch a cryptocurrency trading platform.
- A new German online banking service named Bitbond is currently being developed. It will use Bitcoin for international P2P lending.
- Most of Germany’s top banks have adopted a crypto-friendly stance.
- Germany (Especially Berlin) is home to dozens of top blockchain projects, including IOTA, Ethcore, and Electrum.
- German energy producers Vattenfalls and RWE AG have announced blockchain-based platforms for trading energy throughout the European Union.
In Liechtenstein, sales using cryptocurrency are exempt from VAT. Moreover, speculative gains acquired from trading cryptocurrency are tax-free in Liechtenstein and do not have to be declared as income.
- While Liechtenstein regulates digital assets, the country has not made any efforts to regulate actual cryptocurrencies and services who use blockchain technology.
- Blockchain projects engaging in an ICO are required to provide prospective investors with an in-depth overview of the token. They also have to register with the country’s Financial Market Authority (FMA) and ensure there are measures in place to protect investors.
Overall, Liechtenstein has taken a very friendly stance towards cryptocurrency, with even the country’s Crown Prince supporting crypto investing and blockchain technology. This, combined with the country’s low tax rate, makes Liechtenstein a top place for emerging FinTech businesses.
Australia is another country that’s welcomed Bitcoin as a viable alternative to fiat. While they haven’t implemented extensive blockchain-friendly initiatives to attract businesses like some of the other countries on this list, they have taken a pro-crypto stance.
- Australia was the second country after Japan to declare Bitcoin and other cryptocurrencies as legal tender.
- Australia ended double taxation on cryptocurrency in 2017, following Japan’s lead.
- The Australian government added cryptocurrency into AUSTRAC’s responsibilities. As such, the government agency is in charge of regulating and monitoring cryptocurrency, so that investors, businesses, and consumers are able to benefit from the technology in a safe environment.
15. Dubai (The United Arab Emirates)
Both the UAE and Saudi Arabia have made plans to implement their own cryptocurrencies that will be used and regulated in the region.
- The Dubai Financial Services Authority stated that regulations don’t apply to Bitcoin and other cryptocurrencies.
- The government is investing in top talent who can address and integrate virtual currencies into the country’s existing framework.
- Sheikh Hamdan, the Crown Prince of Dubai, launched the Dubai Blockchain Strategy. This initiative is designed to deliver safety and efficiency. It also provides a roadmap for integrating blockchain technology into government services, which will save Dubai an estimated 5.5 billion in dirhams ($1.5 billion USD) annually.
Dubai is committed to becoming the region’s teach leader. As such, the Emirate has adopted a blockchain-friendly approach for startups and individuals alike.
Mauritius’ low startup costs make it a great country for new businesses using blockchain technology. It only takes €17,000 to start a business in the country, but some have reported difficulties obtaining a forex license, which is needed for professional traders.
- The country is committed to becoming an African leader in technology. The government is creating an Artificial Intelligence Council to explore how technology can be used to enhance the country.
- Along with the AI Council are various laws and policies designed to regulate and roadmap technology, as well as offer incentives to entrepreneurs working in the industry.
Additionally, the Ministry of Technology, Communication and Innovation is collaborating with various tech leaders in private and public sectors, where they’re exploring blockchain’s functionality in contemporary society.
17. Czech Republic
The Czech Republic, and more specifically, Prague, is home to a number of cryptocurrency and blockchain-powered businesses and organizations. Among those groups is Paralelni Polis, a crypto-anarchy event hosted by the Ztohoven artist group which explores everything from hackathons to 3D printing.
- Cryptocurrency transactions aren’t licensed and surtaxed, but profits are taxed and must be declared.
- Natural persons and entrepreneurs pay 15% capital gains tax, juristic persons pay 19%.
- The Czech Republic is home to dozens of blockchain-based businesses, as well as 30.6% of the world’s cryptocurrency ATMs.
The Czech Republic’s tech-friendly stance brings in big businesses and startups alike, and it’s not by coincidence. The Central European country actively embraces cryptocurrency and blockchain, and is one of the easiest places to purchase goods and services using Bitcoin and other cryptocurrencies.
Lithuania is one of the first countries in the EU to develop guidelines to ensure safety and transparency with regards to ICO projects. As a result, the government has successfully made the Baltic country a safe and attractive choice for FinTech and blockchain businesses looking to gain a foothold in the region. While the ICO market isn’t regulated at the moment, analysts believe Lithuania has the potential to become one of the region’s leading blockchain-friendly countries.
- There’ve been countless ICOs and blockchain projects developed by Lithuanians since 2017, garnering more than €400 million in worldwide investments. That’s approximately 10% of the world market.
- Income and profits received from virtual currencies is taxed at a fixed 15%, which is the standard income tax rate. With regards to VAT, cryptocurrency is viewed as the same as fiat.
- The Bank of Lithuania determines whether a token is recognized as a security token or not, but becoming a security token doesn’t necessarily change tax implications.
Lithuania recently created the Virtual Limited Liability Companies (VLLCs), a plan for companies that use blockchain technology. This plan, which is endorsed by the Bank of Lithuania, aims to create an innovation-friendly space for blockchain-based companies.
Considered to be one of the most crypto-friendly countries worldwide, Denmark has a 0% tax on cryptocurrency. They also don’t consider cryptocurrency to be legal tender, and aren’t regulated by the National Bank of Denmark as a result.
- Launched the TechPlomacy Initiative with the aim of becoming the next Silicon Valley, but with a global objective. The goal of this initiative is to help set foreign and domestic policy regarding technology, including blockchain.
- Denmark hosted the ICO & Cryptocurrency Roundtable Discussion in April 2018, in conjunction with the Danish Bankers and Mortgage Association and the Financial Services Union Denmark. The aim of this discussion was to map out a successful way to tackle ICOs in a way that increases security and benefits the industry.
Ultimately, it’s Denmark’s stance on technology which makes them a great country for cryptocurrency—or any tech, for that matter. Both the private and public sectors take a keen interest in exploring the limits of new tech and how it can be used to improve the day-to-day lives of Danish citizens.
20. The Netherlands
In the Netherlands, crypto is taxed one of two ways: income tax or net capital tax.
For miners and professional traders, cryptocurrency is usually seen as a source of income. As such, it’s taxed at income. Investors, on the other hand, are taxed on their yearly assumed return on investment, which is determined every year on January 1st, at a rate of 30%.
But if it’s not the tax laws that make the Netherlands a friendly country for cryptocurrency, what is it?
- Top financial institutions in the Netherlands are experimenting with blockchain tech and how it can be used in their day-to-day operations.
- Amsterdam is a global leader in cryptocurrency adoption and is home to a Bitcoin Embassy, where people active in the crypto community can come together and work on promoting Bitcoin.
- More than 40 merchants in Amsterdam accept Bitcoin, and that number is constantly growing.
Amsterdam is also home to a number of crypto startups, and is even considered to be one of the best European cities to launch a tech startup. Even the Royal family, through the involvement of Prince Constantijn, are involved in blockchain initiatives throughout the country.
There you have it, 20 of the most crypto-friendly countries in the world. Sometime to consider if you’re looking to launch a blockchain-driven business.
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