The crypto space is still fairly new to the world. As a result, there is not a lot of regulation at this moment in time. Various countries all have different approaches. Most importantly, taxes are a delicate topic.
As a crypto investor, where is the best place in the world to live? We will take you on a tour around the world and show you some crypto tax friendly countries.
Who Are the Most Crypto Friendly Countries?
Some countries have harsh crypto tax laws, like India. Currently, up to 30%. On the other hand, we also have countries that embrace crypto. These are the countries that we will investigate and talk about.
Portugal
Portugal is currently the most crypto friendly country in the world. Your earnings in crypto trades are not subject to taxation. To clarify, no personal income tax on trades in this country. However, this changes when you trade at professional level. April 2020 saw the start of their ‘digital transition action plan’. This covers various areas. For example, an e-residency.
Holders of an EU passport can just hop on a plane and go and live there. Other nationalities might enjoy their ‘Golden Visa’ scheme. To be eligible for citizenship, you need to invest 500,000 Euros over 5 years in Portugal. As an added bonus, you only need to spend 7 days per year in-country!
Furthermore, Portugal has a mild and friendly climate. The food is good, and the local people are, in general, nice. Plus, the costs of living are low compared to other Western countries. Lisbon, Porto, or the countryside. Pick your fave.
Source: Portuguese government website
Bermuda
In short, Bermuda doesn’t have income tax. This means that there is also no capital gains tax. It’s a haven for crypto investors and businesses alike.
To give a sample, Bermuda granted a Bitcoin ETF in 2020. In the US, they tried for years to get this sorted. However, the Bermuda stock exchange thought differently. The Hashdex Nasdaq crypto ETF was the result.
On the residency side, it’s a bit trickier. You get a residency in return for a $2.5 million investment. A donation of this grandeur might also get you the passport.
Source: Hashdex
Germany
Germany may be an unexpected pick. However, during Q1, 2022, they surfaced as the most crypto friendly country. We wrote an article about this. For example, only the US has more crypto nodes.
In Germany, crypto is tax-free, if you hodl it for at least one year. Funds traded, and not exceeding €600 in a fiscal year, are also tax-exempt. Germany also created a fund for institutionals only. Up to 20% of their investments can be in crypto. Furthermore, the German stock exchange made headlines. They added more than 20 crypto exchange-traded products. They did this on Xetra, their digital exchange. Germany treats crypto as private money. They don’t consider it legal tender.
EU citizens have no problems settling in Germany. Other countries could get a residence permit if they lived and worked for 5 years in Germany.
Source: Pixabay pdz51
Singapore
Singapore has a reputation for being business-friendly. On top of that, they are also considered to be crypto-friendly. They are the fintech hub of Asia, after all. The MAS, or Monetary Authority of Singapore, keeps an eye out for money laundering. Especially the crypto space!
However, residents don’t have to pay capital gains taxes. Companies are exempt as well. On the other hand, the MAS does tax crypto exchanges residing in Singapore.
Residency is easy to get if you study there. After just two years, you can apply if you pass a government exam. As an investor, it will be not as easy. You face a 2.5 million Singaporean Dollar investment. In other words, that’s $1.8 million.
Switzerland
The Swiss have invented the cheese fondue. On top of that, they were also the first country whose banks offered crypto accounts. That was in 2018 and only to crypto firms. Looking at their financial history, no surprise there. However, all 26 cantons have different crypto tax laws.
So, before you settle in Switzerland, make sure to study canton differences. However, getting residency is not easy at all. One of the restrictions is age related. You need to be below 55 years of age. Another issue is that you have to invest at least 1 million Swiss francs. Yet Crypto Valley in Zug is one of the world’s leading places for blockchain project development.
El Salvador
What is there to say? The first country in the world that has Bitcoin as legal tender. Their president, Nayib Bukele, has exciting plans. He wants to build the first crypto city in the world. He also filled the countries’ treasury with 1,800 BTC. There are plans that allow you to buy yourself a second passport. With crypto, of course. The country has no tax on Bitcoin.
Malta
Malta has a crypto friendly face. The archipelago hosts many crypto exchanges. Many blockchain projects also make it their home. For example, Binance found refuge here when Hong Kong tightened the screws. Furthermore, it’s part of the EU. This fact alone has many advantages. The well-off crypto investors can get citizenship for €1.5 million or $1.78 million. Not too shabby for the current easy-going tax laws. Traders are facing a 35% tax, but long-term holders go tax-free.
Conclusion
Each country in the world has its own view on crypto and its tax. Most importantly, the way how they regulate it! We have compiled this list of the current state of affairs for crypto friendly countries. If you have the desire to look up one of these countries, make sure to do your due diligence. Doing your own research is important, since the clock ticks different for each person. Enjoy your research, though, and send us a postcard once you find your place in crypto paradise.
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