Crypto Friendly Countries:

Apart from attracting non-EU citizens with its Golden Visa program, Portugal also attracts crypto traders and investors from all over the globe. The European country sets itself apart in the crypto space by making crypto profits and individual income non-taxable. Unless you’re a certified cryptocurrency business in Portugal, you don’t have to pay VAT or income taxes on crypto.

So far, these favorable regulations have made Portugal a hotspot for crypto traders and investors from all over the world. However, in May 2022, the country’s finance minister announced that Portugal would review this area. They may target the legal loophole preventing the taxation of crypto. The authorities plan to release a new legal framework that balances tax fairness and Portugal’s competitiveness in the crypto space.

Panama has earned quite a reputation for being a tax haven and now, some lawmakers want to turn it into a crypto haven as well. In April 2022, Panama’s National Assembly passed a bill that will regulate the usage of cryptocurrencies in the country. The bill permits citizens, banks, and legal entities to use Bitcoin and eight other cryptocurrencies as payment in civil and commercial areas.

While the bill has been approved by the National Assembly, it awaits the signature of President Laurentino Cortizo as of May 2022. Unlike El Salvador, Panama isn’t making it obligatory to accept crypto, meaning that crypto isn’t declared a legal tender in Panama. The country also plans to launch an official digital wallet to enable safe coin transactions.

Crypto investors and traders living in Germany don’t enjoy tax-free trading or income, but they do benefit from some unusual tax rules.

In Germany, the government classifies cryptocurrencies as private money instead of capital assets. So, if you intend to hold onto your crypto for more than a year, you will not be taxed when you sell or spend it. Crypto that’s been held for less than a year is subject to taxes unless the profits are less than €600. This is a unique regulatory approach in Europe.

If you’ve staked your crypto, it will be taxed unless you’ve held it for ten years before you sell it. If you intend to hold on for dear life (HODL), you can enjoy the privileges of tax-free crypto in Germany.

However, it’s important to remember that Germany imposes income tax on crypto mining, staking, payments, and selling/swapping/spending under the aforementioned conditions. There’s also an unfavorable tax law shared by EU countries that puts a stop to all crypto derivatives trading.

Malta, also known as the ‘blockchain island,’ is considered a crypto tax haven that’s particularly favorable for holders. That’s because the country recognizes cryptocurrencies as a “unit of account, medium of exchange or a store of value.” As long as it’s a ‘store of value’, individuals are not subjected to capital gains taxes on the long-term profits it generates.

On the other hand, the government does apply a business income tax of up to 35% on all day trader’s profits. The income taxes depend upon factors including your income bracket, residency, etc. If the factors are in your favor, you can expect to pay little to no taxes (0% to 5%) on your crypto profits.

Apart from being one of our top 10 best countries to live in, Singapore is also one of the most crypto-friendly countries in the world. The country is known to be a Fintech hotspot due to its dedication to encouraging innovation. But what truly attracts crypto investors and businesses to this South East Asian country are the favorable tax requirements.

Singapore does not impose a capital gains tax on crypto. This means that you’re not liable to pay any taxes from the profit generated by trading or selling crypto. The country does not tax cryptocurrency funds held by corporations and individuals. However, Singapore-based crypto trading companies or businesses that accept crypto as payment are subject to income tax.

If you’re an individual investor looking for crypto-friendly countries in Asia, Singapore is one crypto haven worth considering.

El Salvador became the first country to recognize Bitcoin as a legal tender in 2021. This was a real victory for El Salvador in terms of crypto friendliness, making it one of the best countries for crypto traders. You can easily use Bitcoin to pay for goods and services in the country and there’s no income or capital gains tax for foreign investors.

Through these crypto-friendly measures, El Salvador hopes to encourage foreign investment in the economy.

Puerto Rico may be an unincorporated US territory, but it doesn’t share USA’s federal income tax laws. Residents of Puerto Rico are taxed separately and enjoy zero capital gains tax for cryptocurrency bought as a resident. However, the IRS will still tax any crypto bought before becoming a resident.

Argentina has the world’s sixth-highest crypto adoption rate. Statista predicted that 21% of Argentines would have owned or used crypto by 2021. For such a crypto-forward population, Argentina isn’t considered to be the friendliest country for crypto ownership. However, that may change soon as Argentina’s largest banks, Banco Galicia and Brubank, are now allowing customers to buy crypto.

Recently, the mayor of Buenos Aires announced that the public financial services would soon accept crypto as payment.

Prime Minister Phillip Davis declared, “The Bahamas is open for business and it’s serious about becoming a major player in the digital asset space.” This signal plus regulatory changes have pushed the Bahamas up the list of crypto-friendly countries. The country aims to be one of the first to launch a central bank digital currency (CBDC) after the Sand Dollar was launched in 2020. Crypto exchange FTX moved from Hong Kong to Nassau in September 2021, and other blockchain businesses are expected to follow. Bahama’s long association with global financial systems and its low-taxation ethos make it a great fit.

The country is known for its incredible banking standards. Some may also refer to it as the realm of finance since this is where you can have low levels of risk and high levels of privacy. Additionally, the country has very lenient regulations for digital currency traders and as well as investors.

The tax rules will differ from canton to canton, but they are usually quite friendly. Switzerland is also a great place if you want to start cloud mining, as it has a perfect system for the crypto mining industry. Even though you will probably be taxed on your mining gains, you can profit a lot.

The small Alpine country has the highest market capitalization of blockchain projects per capita, even though ICOs are subject to taxation.

Furthermore, Slovenian tax residents have to pay a 25% income tax on mining but no capital gains tax.

The Netherlands follows the standards of the international Financial Action Task Force, or FATF, not adding any unnecessarily burdensome regulations against cryptocurrency. This makes it one of the friendliest countries when it comes to cryptocurrency, which is currently regulated by De Nederlandsche Bank NV (Dutch National Bank).

Authorities hold a lenient attitude toward crypto, believing that it has the potential to boost the country’s economy. Because of this, the population uses cryptocurrency with confidence.

The government is not only taking a largely hands-off approach, but is actively supporting blockchain projects with a special research unit designed to determine if blockchain technology could be made more sustainable from an environmental point of view. This makes the Netherlands one of the more advanced countries when it comes to attitudes toward cryptocurrency. Such behavior positions them as a leader in the field, and makes them one of the most crypto-friendly countries.

In 2018, Cyprus — along with seven other members of the European Union — signed a declaration to collaborate and promote blockchain technology. Since then, the little island nation in the Mediterranean has been recognized as one of the most crypto-friendly countries in the world, and has made great leaps in the realm of Bitcoin-legal countries.

Although it doesn’t regulate cryptocurrency, the Central Bank of Cyprus has issued a series of official guidelines intended to protect investors and minimize the risk of losses associated with fraudulent activity.

Furthermore, the Cyprus Securities and Exchange Commission has established an Innovation Hub to promote and maintain the open sharing of knowledge.

Currently, funds earned through initial coin offerings are taxed as income, but Cyprus' corporate tax rate is comparatively low. Furthermore, the country has no mining restrictions, reporting requirements or burdensome legalities for cryptocurrency estates, making it an attractive country for cryptocurrency holders and users and earning it a spot on our list of best countries for lower crypto taxes.

This little island-state in the Pacific has a well-deserved spot on our list of Bitcoin-friendly countries after its recent unveiling of Satoshi Island, a private crypto utopia. As the first country that will accept Bitcoin payments for issuing citizenship, Vanuatu foresees Satoshi Island as a vibrant tourism opportunity, allowing it to attract new people and investments to their country.

Satoshi Island will not only become a tourist hot spot, but a place to live with sustainably built homes and NFT-represented ownership. This undoubtedly puts Vanuatu on our list of the most crypto-friendly countries. However, the country is largely keeping its plans under wraps until its government is ready to unveil their vision for a crypto tax-free paradise.

The Cayman Islands are notorious for being tax havens and that extends to the realm of crypto as well. The tax authority of the country imposes zero taxes on capital gains or income on its residents. Unlike many other countries, the Cayman Islands doesn’t even have a corporate tax for businesses.

Crypto business owners and individual investors will find the Cayman Islands to be a nice tax-free zone. It should be noted that the annual income requirement for the Cayman Islands is $150,000. In short, the cost of living in this luxurious tax haven is exceptionally high.

Bermuda is another Caribbean Island state with promising tax-free crypto regulations. The country doesn’t impose capital gains or income taxes on crypto and crypto transactions are also tax-free.

Of course, much like the Cayman Islands, minimizing taxes comes at a huge price. As compared to other countries like Panama, the cost of living in Bermuda is quite steep as well.

In 2018, Belarus made the sensational decision to legalize crypto and remove crypto taxes for businesses and individuals until 2023. This means that activities like mining, staking, trading, and holding crypto are not subjected to capital gains or income taxes. By implementing this law, the government aims to encourage more digital investments in the country. So, until 2023, Belarus is a tax-free zone for crypto investors and traders.

Note: As a non-democratic dictatorship, be aware that the situation in Belarus can shift dramatically. The US state department warns against travel with risks including “arbitrary enforcement of laws and the risk of detention”.