With the recent surge in Bitcoin prices (as well as wavering faith in the US dollar) many people are starting to once again buy into cryptocurrencies. In the previous blog post, it was discussed which countries are vehemently against Bitcoin, so for those of you looking to invest in this rising market you’re probably now wondering just which countries are happy about and promote Bitcoin and other cryptocurrencies.
Many countries actually have favorable laws when it comes to cryptocurrencies, but none so favorable as the island nation of Malta. Unlike most countries, neither citizens nor residents of Malta are taxed on foreign investments, which at the writing of this article, extends to cryptocurrencies—making earning money with crypto in Malta tax free. Yes, you read that right, tax free. Not only that, but the Maltese government has embraced cryptocurrency technology with open arms, starting many programs to improve the verification processes used by crypto platforms.
This open arms acceptance of these new technologies has greatly benefited the island as the major company Binance announced in 2018 that they planned to relocate their headquarters there. But before you begin to pack your bags and head to Malta, be aware it is one of the most densely populated countries in the world, making it also one of the most expensive. While you may be saving money on the taxes you would have had to pay on your cryptocurrency earnings, you’ll be putting that money straight towards your insurmountable cost of living.
Bermuda is an island located in the Caribbean also known for its favorable tax laws and tenancy to attract high net worth individuals. While the government of Bermuda did release a statement stating that they hope to attract as many cryptocurrency businesses as possible, crypto isn’t technically isn’t considered legal tender. Which while this may sound counterproductive, it actually serves a purpose as the fact that it isn’t considered currency means that all earnings from crypto holdings are tax free. But once again, don’t get too excited, as Bermuda has very high import taxes, making the cost of every day goods very expensive, and while the cost of living doesn’t quite top that of Malta, it will cost you a pretty penny to live there.
Third on our list is probably one of the least surprising, as Switzerland has long been known as a country to be favorable to both neutral and private banking. Not only are the banks favorable to some investments other countries would balk at, but Switzerland is so accepting of cryptocurrency, citizens can even pay their utility bills with Bitcoin. Unlike Bermuda and Malta, cryptocurrency holdings must be declared—and you guessed it—you do have to pay taxes on anything you may earn. While this may not seem like the best (Switzerland does have high taxes) there are many benefits to living in a country where Bitcoin is so accepted, besides just paying utility bills as mentioned above, trading cryptocurrencies is considered a legitimate job (hello income tax), and Bitcoin can even be used to purchase some goods on the Swiss stock exchange. Similarly, to our first two countries on the list, Switzerland is not cheap, and it is quite difficult to immigrate to, so it may not work out for those of you looking for an inexpensive retirement haven.
Just like Switzerland, Gibraltar has long been known for its favorable banking policies. Located to the south of Spain, Gibraltar is a tiny country home to just about 33,000 people but also to a large number of online gaming and financial services. The government of Gibraltar embraces cryptocurrencies and ICO’s, even laying out a legal framework for their operation. Cryptocurrency holdings are taxed, but at a flat rate of 10%, which to anyone who has paid capital gains taxes, is quite the discount. The government of this tiny nation is so excited about the future of crypto, they even made an ETI which can be publicly traded on their stock exchange. However, you will not be surprised to find out that just like the other countries on this list, great benefits come at a great expense, and living in Gibraltar is certainly not cheap.
The next country on our list is perhaps one of the most affordable. Located in eastern Europe, Slovenia is known for its affordable cost of living while also avoiding some of the major social problems which plague neighboring eastern European states. Slovenia quickly embraced the technology of Bitcoin as it emerged, even becoming the first country to erect a monument to Bitcoin in March 2018. The banking side of cryptocurrencies in Slovenia is perhaps the friendliest of all the countries previously listed as they allow their banks to sell Bitcoin, as well as dispense them from branch ATMs. This isn’t without its caveats however. While banks are accepting of cryptocurrencies, it has been declared illegal for a company to operate solely in Bitcoin and all businesses must also hold a cash account in the local currency at the bank.
Heading back to the expensive side, we come to perhaps one of the most famous places on our list. Singapore has long been renowned for its unique laws when dealing with everything from car registrations to chewing gum, so it should come as no surprise that they have a unique view on cryptocurrency as well. Unlike most countries, Singapore sees cryptocurrency as goods rather than currency, and thus they are taxed as such—at a rate much smaller than they would be taxed if they were considered capital gains. In fact, you’ll be surprised to know Singapore currently doesn’t have any capital gains taxes in place—making it an excellent place to run a business! Although the tax situation in Singapore is favorable, this doesn’t mean the government in the country is necessarily pro cryptocurrency, it’s actually slightly opposite. The Singaporean government considers cryptocurrency a great experiment while also warning citizens that it could be a Ponzi scheme. So, while moving to Singapore is great for someone who trades cryptocurrency for a living, it’s not a great place to start a business based around it.
After reading this article, if you’re a serious crypto enthusiast, you’re probably wondering if you should make a move to another country to better your investment. And while that isn’t exactly a bad idea, as mentioned numerous times, many of the places with favorable views on Bitcoin also have other highly sought-after favorable regulations—making most of them very expensive places to live. So, it you’re a serious crypto trader, maybe it is worth the move to save and add value to your investment, but if you’re an everyday investor just doing it for fun, well, you might find a move isn’t worth the cost after all.