Top 6 crypto-friendly countries
cryptofriendly

Top 6 crypto-friendly countries

By savanluffy | cryptogeneral | 24 Feb 2020


Regulations: One of the things in crypto where opinions go their separate ways. While proponents of regulations support the idea of having clear guidelines, adversaries see regulation as an obstacle to use blockchain the way as it was originally planned: decentralized, trust-less and anonymous. And altough "anti regulators" deserve credit for protecting blockchains primitive idea, we have to face reality. Whether it's about taxation, anti-money laundering or KYC procedures, nothing will bypass goverment rules. Regulations don't have to be necessary a bad thing. They are here for a reason: Protection. Unfortunately, crypto regulations become an issue when countless guidelines are to harsh that innovation has to be stopped.  Tough regulations are mainly due to one thing: lawmakers themselves as most often they are boomers who don't understand the internet properly and yet they try regulating a technology they don't have a clue about.

Having said that, here is a good example demonstrating the current lawmakers knowledge about the internet:

 

Surprisingly, not every country see cryptocurrencies as an evil technology that will expropriate their power but more as a technology that can change the world for better. In this post, we will take a look at 6 countries that are open minded towards blockchain technology and co.

 

6. Estonia

Let's start of with a small country located in eastern europe: Estonia. Although Estonia has a population of 1.3 million, it is a role model when it comes to blockchain mass adoption. Estonia is embracing blockchain technology by aiming to build a futuristic digital society. In fact, they are planning to make their own cryptocurrency called "Estcoin" with the hopes of providing easier, faster and safer payment processing. Unfortunately, as Estonia is part of the EU, they had to step back of creating their own blockchain based currency since members of the european union introducing their own cryptocurrency is not in the EUs best interest. Nevertheless, that does not stop Estonia bringing jobs, businesses and innovation to their country. When it comes to real life implementation, they already have stored their medical records on the blockchain. Furthermore, they are famous for their "e-Residency" program. The "e-Residency" program allows foreigners to easier start a business in estonia with friendlier regulations and to welcome ICO's onto the shore back when ICO's were booming. Basically, the programs idea is that the Estonian government would do the hard job of vetting blockchain entrepreneurs and businness people so they run their business while also being safe and less chance of scams. If you are a trader or investor that is looking to minimize taxation, in estonia profits are subject to capital gains tax (of around 25%) but exempt from VAT (20%).

estonia

5. Singapore

Moving from Europe to the Asian side: The next country is Singapore, a small country right under Malaysia. Singapore gained some mainstream media attention after being able to bring a lot of crypto businesses to move over shores there. What makes Singapore so unique is there conducive regulatory environment with clear-cut frameworks for crypto businesses to operate in. The government regulators have shown that they're well informed, transparent and also friendly to innovation in the space. The MAS (Monetary Authority of Singapore) has written out a clear-cut guideline to allow crypto businesses and companies to operate without being in the dark and wondering if they're going to get sued later for example. Also, it is worth mentioning that cryptocurrencies are viewed as goods and not as currencies. Therefore, companies that are dealing with cryptocurrencies are required to pay GST (Goods and Services Tax) when trading Bitcoin or using it for purchases. Also, Singapore has NO capital gains tax system (as of 2020) in place, making it a dream place when planning to invest long-term into Bitcoin and co.

singapore

4. Japan

Another Asian country that is working towards a digitized future is Japan. The country with 126.8 million residents  is not only known for anime and good ramen but also for being a leader in the crypto industry. Since 2017, Bitcoin is considered in Japan as a legal tender under the payment services act. The act would also eliminate consumption tax and crypto as well as make it easier for businesses to accept payments made with digital assets. Some other key facts that should not be forgotten is that japan is often considered one of the nations at the forefront in crypto trading volumes. Reason being is that many of the japanese exchanges offer zero free trading that can lead to greatly inflated volumes. Concerning the tax situation, anyone who is making a profit in excess of 1840 USD is eligible for tax. In other words, HODLERS are not taxed, only those who sell their tokens with the profit exceeding the free limit or using cryptocurrencies for purchasing goods and services. Before moving to the next country, here is a fun fact: Satoshi Nakamoto, the founder of bitcoin, has even a japanese alias.

japan

3. Gibratal

Number 3 of most crypto-friendly countries goes to Gibratal. Gibratal is a British overseas territory located at the southern tip of the Iberian Peninsula with the aim of becoming the largest mediterranean blockchain spot. They've since created laws called the distributed ledger technology framework or DLT framework. What makes Gibratal so attractive is their low regulation towards online gambling and financial services. Thus, many banks, insurance firms and other financial institutions are headquartered in Gibratal. When it comes to taxation, the corporate tax rate has been fixed at 1ß% since 2011, but as of 2018, the government is in the process of formulating a legal framework for cryptocurrency businesses, which should bring further clarity on taxation issues. The new framework will be based on 9 pillars given below:

  • Honesty and integrity.
  • Fairness and clarity.
  • Maintenance of adequate financial and non-financial resources.
  • Risk management practices.
  • Protection of clients’ assets.
  • Corporate governance arrangements.
  • Secure systems and protocols.
  • Prevention of financial crime risks.
  • Contingency plans for winding down of business. 

gibratal

2. Switzerland

Continuing with Switzerland, a beautiful country in europe encased by mountains and alps. A city in Switzerland called Zug is known for being called the "crypto valley". The small city near Zürich is the FIRST in the world to start accepting Bitcoin payments for local taxes. A lot of people credit Switzerlands openness towards cryptocurrency to the fact that it isn't part of the EU. The EU has always been open about its stance on cryptocurrency and since Switzerland isn't part of any of it, it's been extremely welcoming to cryptocurrencies. It's even home to one of the best cryptocurrencies and blockchain companies around the globe which can be seen in the image below.

pl

Reasons why companies such as tezos, lisk or the etherium foundation decide moving to the city is on the one hand the low corporate tax amount but on the other hand it's also because they have clear guidelines about how to treat cryptocurrencies and companies dealing with such. It's crusial to mention that even some traditional fintech companies are also located in Zug so there so a lot of mutual collaboration going on because of that. Also, because they are such a hotbed for many crypto companies based there, Zug has a pretty famous conference every year called the "Crypto Valley Conference of blockchain technology". A lot of crypto enthusiasts attend the crypto conference to converge on the small town during that time. If you are planning to tax your crypto holdings in switzerland, it's key to know that they are subject to wealth taxes. Unless you are not a professional trader, you should not be worried about losses as capital gains taxes affect only those who trade professionally.

switzerland_zug

1. Malta

It's safe to say that Malta, a small island in the Mediterranean sea between Tunisia and Italy, has fully embraced bitcoin and blockchain technology. You might have also heard of it by its nickname before called blockchain island since on semptember 27, 2018 malta's prime minister proclaimed that malta will become the "first blockchain island". His full support for virtual currencies has since been an iconic moment for cryptocurrency enthusiasts around the globe. It's pretty famous because a lot of large exchanges like Binance and OKEx have moved on to it's shores. Just like Gibratal, they've gotten a lot of success in therms of rising their GDP and increasing their country's revenue by welcoming online gambling, cryptocurencies and other unregulated industries. Especially online gambling, as it is responsible for 13% of the whole islands GDP's. Thus, they're also changing their gaze onto a new up-and-coming industry: blockchain and cryptocurrency. In order to give companies an incentive to come to the island, they offer some very lucrative offers. One of them being very low taxation. Secondly, they write out really clear and friendly crypto regulations so there aren't a lot of question marks about if something can be done or how to it in a legal and regulated way. Last but not least, they have a lot of government incentives to get these companies onto shore and help them spin up their business really easily and run smoothly so that everyone is happy. One of many real life adoptions that we can already see in Malta is the first-ever decentralized bank, which was created under the collaboration with Neufund, a company that's driven to provide open finance. One downside as far as payment goes, virtual currencies aren't quite legal tender just yet but they're recognized as mediums of exchange.

malta

 

Conclusion

As the crypto-market evolves, we see more and more countries taking this industry seriously and trying to become one of the nations at the forefront when it comes adopting blockchain technology. Although many countries are critical adjusted when it comes to bitcoin, all of them will have to become crypto-friendly if they don't want to risk native companies and businesses moving off-shores.


savanluffy
savanluffy

20 year old who loves football. Programmer. Suffering from mentall illness but trying to make the world a better place


cryptogeneral
cryptogeneral

Adressing generell cryptotopics und cryptocurrencies including politics and economy

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