Nowadays, cryptocurrencies have changed the way payments are sent and received, providing lower transaction costs, near-instant payments, and providing a diversified investment portfolio for many users who currently exceed 300 million users worldwide. If you are one of the cryptocurrency users and wondering about the best crypto-friendly countries, then this article is for you.
Although there are countries that still completely ban encryption and digital currency trading, the existence of cryptocurrencies is no longer limited to a few countries, as there is an increasing number of countries adopting them and allowing the crypto sector to flourish through legislation.
Crypto-friendly countries 2023
As a passionate cryptocurrency investor or trader, you may want to know the most crypto-friendly countries in order to make strategic investment choices, so let’s take a look at a list of the best crypto-friendly countries based on the latest updates and available information.
In no way can a list of crypto-friendly countries be devoid of El Salvador, the Central American country that was the first country in the world to adopt Bitcoin as a legal currency. This means that all businesses within the country accept payment in Bitcoin, and it is used just like US dollars to pay for goods and services. The Salvadoran government has given its full support to cryptocurrencies and is even planning to build the world’s first Bitcoin city, seeking to maintain its status as a cryptocurrency hub.
El Salvador, which has 60% of its total population using crypto, hopes to attract crypto businesses and investors by stating that they do not have to pay any capital gains or income tax on cryptocurrencies.
The Monetary Authority of Singapore (MAS) fully supports cryptocurrencies and the Central Bank of Singapore has a positive view of them. The country also imposes no capital gains tax and no tax on goods and services paid in cryptocurrency. Only it has income tax on income from cryptocurrency-related activities. Therefore, the Southeast Asian country is considered one of the global crypto hubs, and a great place to start investing in cryptocurrencies.
Another crypto-friendly country is Portugal which has neither capital gains nor trading taxes. The southern European country only taxes income from cryptocurrency. Although there are no clear regulations on cryptocurrencies in Portugal, their trading is permitted and legal and investors and traders can buy, sell and trade freely.
The Portuguese crypto environment also attracts many companies and investors from around the world, not only because of its flexible tax policies, but also thanks to the golden visa program where non-EU residents can obtain a residence permit if they make a qualifying investment.
The Slovenian government is officially encouraging the transition to blockchain technology, has greatly relaxed crypto regulations, and does not impose a tax on cryptocurrency trading or value added tax (VAT) on mining. Slovenia only taxes income on cryptocurrency mining.
Slovenia can be considered one of the most crypto-friendly European countries, as there are many sellers accepting cryptocurrency payments, and the number is growing rapidly. Therefore, the small country in the center of Europe is one of the most attractive destinations for cryptocurrency enthusiasts on the European continent.
This small island country is one of the most popular in the cryptocurrency world thanks to its progressive legislation that gives a clear picture of the legal framework required to establish a legitimate cryptocurrency business. Although Malta imposes an income tax on cryptocurrencies, investors will not have to pay long-term capital gains tax on their cryptocurrency holdings, and the income tax can be reduced to 0% – 5% depending on the tax bracket and income situation. At the same time, Malta offers its citizenship by investment to those who invest at least 680,000 euros, so it is a great opportunity for many investors who are passionate about cryptocurrency.
Switzerland is not only known for its highly private banking system, but it has also risen in the crypto world and has become one of the most cryptocurrency-friendly countries, classifying it as an asset and recognizing bitcoin as legal tender in some locations. Swiss banks also pioneered business accounts for crypto companies in 2018.
Although Switzerland is not a tax-free country for cryptocurrency, tax rates are still competitive. And if cryptocurrency trading is private and not professional, there is no need to pay any capital gains tax.
Although Germany does not recognize cryptocurrency as an asset, but rather considers it private money, it is still an excellent destination for long-term investors, as Germany does not impose a long-term tax on capital gains. While short-term investors have to pay income tax and capital gains tax, long-term investors, who hold a cryptocurrency for more than a year, will not pay capital gains tax on it. Also stacked cryptocurrencies become tax free after ten years.
The bottom line is that many countries are moving towards regulating cryptocurrencies or at least making trading legal. Countries are also competing to provide crypto-friendly policies to attract eager investors from around the world, topped by the list of countries we mentioned earlier