When cryptocurrencies first appeared in the financial world, many were sceptical about them. Governments feel threatened primarily because digital currencies make central banks obsolete. A decade later, mainstream adoption of cryptocurrencies has come a long way. However, many jurisdictions remain hostile to digital currencies.
There is no denying that cryptocurrencies have several advantages, so many enthusiasts and investors have jumped in; however, for mainstream cryptocurrencies to be adopted globally, jurisdictions must accept new digital currencies and integrate them into everyday life.
However, the different crypto regulations in the region mean that some countries are more friendly than others. In this article, we will be exploring the top ten Crypto friendly countries in the world.
Top Ten (10) Crypto-Friendly Countries in the World
Slovenia
One of the factors that make the country crypto-friendly is the government reception. Slovenia tops the list regarding its tax regulations thanks to its government’s acceptance of digital currencies.
In Slovenia, the government treats cryptocurrencies as virtual currencies. Therefore, governments see cryptocurrencies as a medium for exchanging goods and services.
Additionally, cryptocurrency regulations do not tax trading earnings due to price fluctuations. Cryptocurrency mining is also not subject to Value Added Tax (VAT). Therefore, mining cryptocurrencies in the jurisdiction is profitable.
Czech
The Czech Republic is arguably one of the most crypto-friendly countries in the world. Prague, the Czech capital, is home to one of the world’s first Bitcoin-only cafes, Parelelní Polis. Prague is known for its advances in the daily use of cryptocurrencies, where people can go shopping, watch movies, and even pay their rent.
El Salvador
After becoming the first country in the world to treat bitcoin as legal tender, El Salvador wants to attract foreign investors and give them tax exemptions. The government is exempt from any capital gains or income tax on Bitcoin gains.
The world is still waiting for El Salvador’s legal framework to enforce these official declarations, but the crypto world is hailing it as one of the best crypto tax-exempt countries.
Japan
Japan is known for having some of the most advanced cryptocurrency regulations in the world. As a result, about 10% of all global crypto exchange traffic comes from Japan.
In 2017, the country recognised crypto assets as legal tender and established clear tax guidelines for investors. This is no small matter, as the reluctance of national tax authorities in many regions to issue detailed guidance on virtual assets is a concern for both individuals and companies.
The Japanese cryptocurrency industry has also been given space for compliant and adaptive self-government. The Japan Virtual Currency Exchange Association (JVCEA) consists of more than 20 organisations that authorise the adoption and enforcement of regulations and standards for cryptocurrency exchanges in Japan.
Portugal
Thanks to a reasonable tax structure, Portugal has attracted many individual crypto investors, different from other countries. Portuguese law does not impose a capital gains tax on individual investors who benefit from selling and purchasing cryptocurrencies. There are also no taxes when converting cryptocurrencies into other forms of money.
Another factor that makes Portugal attractive to crypto investors is that it is easier for foreigners to establish a base. In addition, some resident and citizen programs are open to crypto enthusiasts.
It is worth noting that Portugal is not precisely crypto-friendly for businesses. For example, corporations are subject to capital gains tax instead of individual investors, which is probably why not many crypto companies are investing in the region.
Switzerland
Switzerland is one of the most advanced countries in the world, especially in the financial sector. However, when it comes to digital currencies, things get a little more complicated.
The country is divided into 26 states, each with its own unique crypto regulations. For example, some states may tax cryptocurrencies while others do not. While it may not be accurate to conclude that the country is crypto-friendly on a national level, many states are.
Zurich, for example, exempts movable private assets from capital gains tax. Therefore, cryptocurrencies are tax-exempt under certain circumstances. The same applies to areas like Lucerne. However, other states such as Bern have stricter rules and activities such as mining and trading are considered regular income and are taxable.
Germany
One of the great things about Germany is that it doesn’t see digital currencies as legal tender but as private money. Long-term investors may find Germany to be paradise because of the German laws. However, if you’re looking to avoid taxes and don’t plan on keeping your investments, you might want to reconsider.
Regardless of their cryptocurrency value, you will not be taxed if you hold them for more than 18 months. The country is working hard to crack down on those trying to use the law to make big deals.
Singapore
As you probably already know, Singapore is perhaps the most developed and stable economy in the world right now. Many entrepreneurs go there to do business, but there is also a noticeable increase in crypto miners and traders.
The country is the technology hub of Southeast Asia, and cryptocurrencies are closely monitored to prevent illegal activities and money laundering. So if you want to grow your crypto business legally, it’s the perfect country if you need a balanced regulatory regime. Cryptocurrencies are used as experimental structures and will continue to grow here.
Switzerland
The country is known for its incredible banking standards. Some might also call it the finance space because this is the space where you can have low risk and high privacy. Additionally, the country’s regulations for digital currency traders and investors are also very lax.
Tax rules vary from state to state but are generally very friendly. If you want to start cloud mining, Switzerland is also a good place as it has a perfect cryptocurrency mining system. Even though you may be taxed on your mining earnings, you can make a lot of profit.
Malta
Due to its cryptocurrency-friendly nature, many blockchain projects and crypto exchanges take place in Malta. The small island has been on the radar of many investors in recent years. Binance gained popularity in Malta after Hong Kong tightened regulations.
Rumour has it that over $70 billion worth of cryptocurrencies has crossed the Maltese border in recent years. Some would argue that the country lacks some regulatory body, but given the number of traders and miners there, it’s hard to say anything wrong about it.
Conclusion
If you plan to invest in Bitcoin or use other cryptocurrencies, these crypto-friendly countries can help. So invest after careful consideration and leave no stone unturned to be on the safe side. Please also note that it is advisable to check for updated information before investing in any country, as regulations in cryptocurrency countries can change from time to time.
