Editing by Michael Mislos
It is unsurprising that the Philippines is considered one of the most crypto-friendly countries, with its much exposure around non-fungible tokens (NFTs) and enthusiasm for cryptocurrency and trading. In this article, we take a look at other countries that are also friendly towards crypto.
These countries have established hubs that crypto enthusiasts and investors could travel to, build networks with, or form investments with other crypto investors. At the same time, anyone may enjoy the country’s environment and travel spots while doing crypto related businesses. With ample stash of crypto and stable coins, they could be the dream countries for those who might be interested to migrate there or simply just visit.
Here is a list of countries that have laws and/regulations that are friendly towards cryptocurrencies, NFTs and blockchain gaming.
What are the most crypto-friendly countries?
1. El Salvador
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El Salvador passed a law in 2021 that enforced Bitcoin as a legal tender. That means anyone can legally purchase goods and services using Bitcoin, just like using their local fiat currency, US Dollars. There is no capital tax on Bitcoin.
El Salvador also plans to build the world’s first Bitcoin City to maintain its status as a cryptocurrency hub. Because of its friendliness towards Bitcoin, however, there is heavy criticism from traditional financial institutions.
With the recent bear market happening, there are questions on whether or not El Salvador will declare default because of the decreasing Bitcoin despite the country adding more BTC to its treasury. Default happens when a government of a country is either unable or unwilling to repay creditors.
For more details, refer to BitPinas article.
Our neighboring ASEAN country, Singapore also imposes no capital gains tax and no tax on goods and services paid for in cryptocurrencies. However, it does have income tax on income from crypto-related activities. Additionally, Singapore’s financial regulators are equally open to digital assets. This allows crypto-related companies to operate without a license within a six month grace period.
In a recent news, Singapore’s Monetary Authority of Singapore (MAS) would like to have regulations in terms of supervising young risk takers to avoid the possibilities of money laundering and terrorism funding activities. This means having to implement Know Your Customer (KYC) on cryptocurrency service providers to report any activities that could potentially violate the Anti-Money Laundering (AML) and Anti-Terrorist Funding (ATF) law of the country.
Portugal taxes income in cryptocurrencies, there are no capital gains taxes and taxes on trading.
Aside from that, Portugal has a Golden Visa program. This allows non-European Union citizens to qualify for a residency permit and eventually a passport in the country through their crypto-related investments. To claim for the Golden Visa and not become a tax resident of Portugal, the investor cannot stay in the country for more than 183 days a year.
Because of the country’s regulations, Lisbon, Portugal has become one of the hubs in Europe for crypto investors.
Recently, there was an apartment that was sold and paid with Bitcoin, which was reportedly the first in the country to have cryptocurrency as a means of payment without converting it to fiat. This is because of a new provision adopted by Portugal’s Order of Notaries, the body which regulates notary activities together with the Ministry of Justice. Before, crypto needs to be converted to Euro before a property can be sold but now they can transact purely with cryptocurrency.
Malta accepts Bitcoin and other cryptocurrencies as money. The law passed in 2018 in regards to blockchain, cryptocurrency and distributed ledger technology (DLT) made it a sanctuary for initial coin offerings (ICOs) at that time. Even though crypto trading in Malta incurs a tax of up to 35%, the investor can reduce that to 0% – 5%, depending on their tax bracket and income status.
Recently, Malta is creating regulations that are more crypto-friendly. Many large cryptocurrency exchanges, like OKEx, have already established their headquarters in Malta.
5. Puerto Rico
Puerto Rico is popular for North Americans since the US territory is treated as a separate country when it comes to its taxation. Hence, there is no federal income tax in the country and no capital gains tax if the North American investor bought cryptocurrencies as a tax resident. But cryptocurrencies that they purchased before moving to Puerto Rico and becoming a resident will be subject to taxation by the Internal Revenue Service (IRS).
These are just some of the countries that have regulations that are friendly to cryptocurrency trading and investments. While the Philippines has clear guidelines and pronouncements from the Bangko Sentral ng Pilipinas (BSP) with regards to cryptocurrencies, these other countries may be worth visiting or migrating to just in case crypto enthusiasts and investors would want to use their crypto investments in the countries mentioned.
If you are interested about the current crypto regulations in the Philippines, BitPinas articles are available as reference.
This article is published on BitPinas: What are The Top 5 Crypto Friendly Countries?
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.