The obligation of filing your taxes on your cryptocurrency trades has become more and more important in recent years due to the introduction of new regulations by major nations. The global adoption of this technology is actually a good thing. Several nations, including the United States, are planning to impose stricter regulations on cryptocurrencies. In addition, crypto profits are already taxed in the United States. For this reason, in order to avoid meeting with the International Revenue Service (IRS), investors in the United States must follow the old rules.
However, if you don't like that (along with freedom from financial constraints!) or you're a Bitcoin maximalist, luckily, the world has many places where you can find better solutions.
We've rounded up seven countries across the globe that support crypto, including one that allows the trading and earning of crypto income without paying taxes. Check out our guide to crypto investors' best countries.
There is no doubt that Portugal is among the countries with the most crypto-friendly policies in the world since it launched its Digital Transitional Action Plan in April 2020, aimed at promoting decentralization. During the early 1990s, Portugal suffered hyperinflation, almost driving companies into bankruptcy, which explains the Portuguese willingness to trust crypto.
Whenever you make capital gains from purchasing or selling cryptocurrencies, there are no taxes to pay, and no income tax applies to cryptocurrency payments received. Those who do not hold an EU passport can invest 350,000 euros in the country over a period of five years to qualify for citizenship as part of the Golden Visa Program. One of the best parts is that you only have to stay in Portugal for seven days each year, which means you won't have to move there permanently.
In order to appreciate Bermuda's crypto-friendly nature, one only needs to consider the Bitcoin ETF that launched in the year 2020 after unsuccessful launch attempts in the US. A Nasdaq crypto ETF offered by Hashtag has been approved by the Bermuda Stock Exchange, establishing it as one of the first of its kind. This shows that Bermuda remains a forward-looking country in the crypto space.
The process of obtaining residency in Bermuda is relatively straightforward if you have a sufficient means of income. It is necessary to invest at least $2.5 million in property, partnerships, or bond issues in order to qualify for a passport.
An island in the Mediterranean Sea in southern Europe, Malta has been using cryptocurrency for many years. The income tax rate for crypto traders is 35 percent because it falls under the same legal definition as stock trading, but on the bright side, the capital gains tax doesn't apply to long-term investments on crypto exchanges. Therefore, if you’re a long-term investor, Malta would be perfect for you; however, if you’re a day trader, this may not be the best option for you.
As a non-EU citizen who wants to become one, it is possible to acquire Maltese citizenship within about 1.5 years for around a million dollars. Ideally, this is for long-term investors seeking tax-free cryptocurrency withdrawals.
Singapore is already regarded as one of the world's best business destinations and is slowly developing into a crypto-friendly locale. The country's central bank believes crypto ecosystems need to be monitored to stop illicit activities and money laundering; however, it also believes innovation should not be restricted. It is often referred to as Asia's fintech hub since residents and companies are not required to pay capital gains tax, nor are there any existing funds that are taxed.
Singapore visas are easy to obtain for students, as they only require two years of study and passing a government exam. However, the requirements are much higher for investors – a minimum of $2.5 million Singapore Dollars (approximately US$1.8 million) needs to be put into new ventures for investors to qualify.
In 2018, Swiss banks became the world's first to offer business accounts to crypto companies in recognition of the fact that banking channels would help increase fraud prevention in Switzerland and encourage legitimate businesses to do business there. Cryptocurrencies are classified as assets, and Bitcoin is considered legal tender in some states, which makes the crypto narrative positive in general. Cryptocurrencies aren't viewed as a threat by the Swiss.
Holding crypto as an investment in your own account means that if you qualify as an individual trader, you won't have to pay capital gains taxes on it. The residency rules in the country are a bit different than in other countries – the applicant must be under 55 years old and invest one million Swiss Francs in promoting the development of new technologies.
El Salvador has been making headlines in mainstream media and has been the undisputed leader in crypto-friendly regulation since 2021 when Bitcoin became legal tender. Therefore, the country does not tax income or capital gains from Bitcoin and plans to become the world's first Bitcoin city to maintain its status as a cryptocurrency hub.
Crypto may also be used to purchase additional passports and new nationalities in the future. As of now, the law has not been confirmed. However, since Bitcoin was made legal tender in El Salvador, the country has continued to acquire Bitcoin, accumulating more than 1,800 Bitcoin because it wants to continue building its stock. You should not be surprised if El Salvador one day offers citizenship in exchange for investment in cryptocurrencies.
It is an island in the West Indies called St. Kitts & Nevis, which has actively welcomed digital assets by passing legislation to ease cryptocurrency transactions with the introduction of the Virtual Asset Bill of 2020. It is possible to use crypto to purchase a passport to this tax haven, and to get the passport; you don't even have to land there. About $150,000 is necessary to get a passport or Bitcoin equivalent, and it takes four months to get one.
Taxes on capital gains are not applicable in the country at all, and investors can work with local banks without a problem. ATMs for Bitcoin are located throughout the island nation, and you can live anywhere in the Caribbean country within the Caribbean United Nations.
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