Crypto-Friendly Countries: Top 10
Crypto is international by nature, but some countries are friendlier to it than others. The good news is that really crypto-hostile states are rare and in most cases are easy to avoid. Many governments are still thinking about how they should approach crypto use and lack clear and decisive legislation here.
Thus, if you are about to start your own blockchain-based business, you might be interested in the list of places that are ready to embrace crypto right now, for one reason or another. Some seek to be at the forefront of the financial progress, others see blockchain as the perfect solution for their own problems.
In this article, we suggest the best states to start a new crypto business, with a short summary for each.
Malta is seen by many as a country with the brightest future for crypto business. Behance, the biggest cryptocurrency exchange in the world is going to relocate its headquarters from Hong Kong to this island state. Malta offers to the companies, operating with cryptocurrencies, such important things as legal clarity, a competitive tax regime and well-established business infrastructure.
The country aims to create a friendly business environment for crypto businesses and stimulate cooperation between them and local financial institutions.
Malta has already made a lot of legislative work in this direction. They are determined to become the “Blockchain island’ and have a clear roadmap for this destination.
This small Caribbean Island used to be a British colony and still remains the part of the Commonwealth. Many financial organizations and major corporations operate from here, as the state features very attractive tax rates, apart from the pleasant climate and lifestyle. The number of companies registered in Bermuda (with no physical presence of the employees) exceeds 15 000.
The relaxed taxation extends to Bitcoin and other cryptocurrencies. The Island state has officially announced that it seeks to attract crypto business but will develop the laws to prevent criminal activities like money-laundering. The Bermuda Financial Authority (BFA) has recently published a paper named the Virtual Currency Business Act (VCBA) suggesting regulatory measures. In general, the island intends to develop a friendly and predictable environment for decent cryptocurrency companies — with transparent and non-prohibitive rules. The local banks are expected to welcome the new governmental policy.
This central European country has always been a synonym for political neutrality, high living standards, and banking confidence. One of its cantons, Zug has rightfully nicknamed Crypto Valley as it has passed several really progressive laws regulating crypto use and related businesses. Other regions take over from it.
The country, in general, encourages crypto use (the Swiss state railway even accepts BTC for ticket payments) and boasts clear legislation and favorable tax policy in regard to cryptocurrencies.
Switzerland is determined to become the major crypto-nation, according to the Swiss economic minister. It may help to recover the reputation for financial privacy that has somewhat degraded lately.
Slovenia is the richest Slavic nation with advanced economic views. The government here is very welcoming towards crypto use and serious about making the country one of the major EU blockchain hubs. The legislation regulating crypto operations is rather clear and favorable, making things easier for people involved in this kind of business.
As a result, Slovenia hosts a lot of blockchain startups, being a popular location for various kinds of ICOs. General crypto acceptance is increasing with every year, too. In some big shopping malls, you can already buy yourself a coffee for BTC. Say nothing of the monument to Bitcoin, erected in the very center of the city of Kranj.
This Southeastern country features a highly-developed economy and is famous as a tax haven, making it home to many financial institutions. Singapore also has the well-deserved reputation of one of the most technologically advanced, innovation-friendly and corruption-free nations in the world. No wonder, it is also very crypto-friendly.
Bitcoins and other cryptocurrencies are seen by the local legal authorities as goods and not as money. In practice, it means that any company, operating with BTC or altcoins pays a tax of just 7%.
One one hand, the country’s commitment to the development of blockchain technology has attracted a lot of related startups. On the other hand, the lack of restrictions in this field has led to increasing volume of scam activities. Currently, the prime minister and his cabinet are determined to prevent those dubious business schemes and clean up the mess.
Estonia is a small but technologically advanced Baltic state that features high rate of economic freedom and ease of doing business. Estonian government is considering creating the state-owned cryptocurrency, Estacion. The country is one of the most attractive locations for crypto startups due to the favorable legislative framework. Estonia is also the pioneer of e-residency initiative that lets crypto entrepreneurs become digital citizens. Among other things, it means zero incorporations tax on undistributed properties and online cross-border management. A digital citizen can safely link their virtual citizen profile to their crypto wallets — the innovation, that may help recover lost tokens in case of need.
The supposed birthplace of Satoshi Nakamoto, Japan is currently at the forefront of crypto adoption and integration. Japan was the first state to approve BTC as legal tender, and it also features one of the largest crypto communities in the world. The crypto-defensive attitude of the Chinese government contributed greatly to the growth of Japanese crypto market.
Unlike some other crypto-friendly states, Japan prefers strict but fair regulation, and increasingly controls all active participants of the crypto market, with special attention to exchanges.
Thus, the country is attractive for those who want to operate with cryptocurrencies under clear conditions and seeks confidence and stability of a well-developed ecosystem.
Hong Kong economy has been rated as the freest in the world since 1995, and the wealth of this state is largely based in trade and finance. The Bitcoin association experts define the region as ‘a reliable and predictable non-interventionist regulator’, where ‘most rules are clearly laid out and easy to comprehend and follow for people with little legal training’.
Here Bitcoin is exempt both from VAT and capital gain taxes and seen as a digital commodity rather than currency. BTC trading is not regulated by any official financial authorities — the legislation of commerce in the ‘free port’ is traditionally light. The situation might change due to increasing Chinese influence — recently Hong Kong government has been urged to pass stricter laws to regulate Bitcoin. Nevertheless, the Hong Kong Financial Services and the Treasury agency’s report denies that Bitcoin and other cryptos have played a visible role in money laundering and other criminal activities.
Arab Emirate of Dubai is planning to launch Encash, the national digital currency. Everyone living there will soon be able to pay for goods and services with digital currencies. It includes in-store purchases, education fees, and utility bills.
It may be considered a big step to making Dubai one of the blockchain capitals, a real Smart City.
The land registry has been running on blockchain for more than a year here, and the plans are big. By 2020 most government documents are expected to be blockchain-managed. There has been a number of blockchain startups, too.
Obviously, Dubai is opening doors to international crypto investment that China, India and other crypto-hostile countries are missing out on. The US fintech company Ripple has already announced that they will open an office in Dubai, as they see the Middle East as their ‘fastest growing market’.
The tiny state located to south of Spain is an attractive spot for doing business — many companies, including blockchain-based ones, have their headquarters here.
Gibraltar is currently formulating the legal framework for crypto business that will make taxation issues clearer. The country was the first to define rules governing ICOs — the fact that is likely to result in growing number of initial coin offerings.
There is some poison in this honey, too. Though Gibraltar financial system is very accepting to cryptocurrency, they depend greatly on the policy of their British partners whose decisions might affect the companies operating here. For example, in January 2018 the RBS (the Royal Bank of Scotland) refused to process orders from Gibraltar-based crypto companies, causing some problems there.
We have offered you a short overview that might help narrow down the list of crypto-friendly countries. Your choice should depend on the kind of business you are running. Do you feel more comfortable with clear and well-developed legal framework or want to benefit from under regulation?
It is always up to you to decide.
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