Table of Contents of this Post
In this article, you will find a complete list of Top Crypto-Friendly Countries. Obviously, their friendly attitude is reflected in their tax policies and government position towards this matter. Although the target of our article is Georgia, we will try to provide you with laconic information for each country. Do you earn money from trading crypto and are not sure where to incorporate as a digital entrepreneur? This blog is going to help you to determine where to start a bitcoin business.
List of Top Bitcoin-Friendly Countries in 2021
Let’s start with the fact that the best advantage of Bitcoin is that, unlike fiat money, it does not have a defined location. What is meant by location ?! For example the fact that the dollar belongs to the US, the yen to China and so on. Consequently, with this advantage, you can send and receive Bitcoin to any location in the world, from anywhere. The only essential circumstance is to have an internet connection.
It should also be noted that when we talk about the movement of their masses in international areas, as well as sending, as well as receiving, in many cases, there are obstacles to its recognition by the tax authorities as the income of your business.
Also noteworthy is the fact that for some countries the revolutionary decentralized approach to Bitcoin poses a certain threat. Consequently, such countries pursue protectionist policies with respective legislation against banks and businesses that wish to circulate Bitcoin. In contrast, many countries do not ban, but rather have a friendly and even welcoming attitude towards Bitcoin business opportunities. The purpose of this article is to introduce you to countries that are friendly to the Bitcoin business.
In the list of countries below, the countries are ranked from the best to the worst, taking into account how low the tax rates of these countries are, how clean their regulations are, what is the attitude of banks towards this issue, and most importantly how favorable the business environment and doing business in the country is. So, they are:
- Hong Kong
Overview of countries that have friendly stance towards Bitcoin
In this overview we will list the countries again with their brief characteristics towards Bitcoin. Thus, let’s pay attention:
First of all, Malta is a country on an island in southern Europe with a population of up to 500,000. Despite its small area (316) it is quite tightly populated. The currency is the euro because it is located in the European zone. There, cryptocurrency is one of the prospects and is a prerogative for the government. Binance has even announced that it will move its headquarters to Malta. Furthermore, obtaining residency is easy and not a problem.
In this regard, it is noteworthy that Malta does not impose property taxes and business taxes for foreigners are 35%. However, foreign residents are not subject to Maltese income tax if the income was received from a foreign source, provided that it is not transferred to the Maltese bank account. And if that happens, it will be taxed at 15%.
Bermuda has no VAT, no corporate, income, property or capital gains taxes and that is why it is referred to as a tax haven. Although it has only a minimum wage tax, which is a high 10%, it is also noteworthy that consumption taxes on goods and services are high. High taxes on imports.
And most importantly, Bermuda’s light taxation policy applies to Bitcoin and not only it, but cryptocurrencies in general. It is not recognized as a legal remedy, which proves its tax-free status. In this prospect, the country aims to develop anti-money laundering policies and create a friendly environment for cryptocurrency businesses and startups.
In a word, let’s continue with Swiss. It is a successful country in Central Europe with a high degree of political neutrality and banking confidentiality. Because it is not part of the European zone its currency is the franc (CHF). It is well known that the country ranks first in the world in terms of economic productivity and at the same time competitiveness, with a correspondingly high standard of living and standard.
In Switzerland crypto property must be declared in order to be subject to property tax.
The important thing is that capital gains taxes and compensation for losses are only for them, with the highest level of cryptocurrency, entering the market with full professionalism. However, cryptocurrencies received in the form of wages are subject to income tax.
To prevent a license to send or receive Bitcoin, organizations must comply with anti-money laundering legislation.
The next country is Gibraltar, which is quite small in size. It is located in the south of Spain. It has only 33,000 inhabitants. During self-government, Gibraltar is part of the United Kingdom. The pound and the euro are used as currencies.
It should be noted that online gambling and financial services are the two leading industries in Gibraltar. Finally, the Gibraltar corporate tax rate has been fixed at 10% since 2011.
Slovenia is located in the center of Europe, has a population of 2 million and is an economically viable country. As a member of the European Zone, Slovenia uses the euro. The secret of economic sustainability also lies in the fact that the economy is mainly based on services and the standard of living in the country is quite high.
By law, bitcoin and cryptocurrencies are recognized as virtual currencies, which means that Slovenia does not pay bitcoin for both money and security. However, trading in Bitcoin is not taxed under income tax laws.
Conversely, individuals who purchase Bitcoin as part of a business or mining business will pay income tax on it.
The corporate tax rate on crypto business in Slovenia is not predetermined, although taxation is quite expected.
Continue through Singapore. It is an archipelago country in Southeast Asia, home to 5.6 million people. The country has a highly developed market economy, driven by a trading port. The latter uses the Singapore dollar as its currency and is famous as a tax haven and a global financial hub.
In the country Bitcoins are considered as a commodity and not as a currency. Any related organization is required to pay a fee for the goods and services, naturally when trading or using Bitcoin. At present this tax is set at 7%.
The next country is Estonia, a country in the northern part of Europe. It is quite successful and highly rated for its economic freedom and ease of doing business, ranking 4th and 12th, respectively. A fairly recent Bitcoin trader law prohibits Estonia’s 25% capital gains tax and its 33% social tax. It should also be noted that these tariffs may not be applied in all cases – for example, the trader pays only 20% income tax in Estonian accounts. It is noteworthy that “e-residents” are taxed only on income earned in Estonia.
Georgia, the main target of our article. It is not an American state, but it is located in the east of Europe and is an independent country. Georgia is not a member of the European Zone and uses the Georgian lari as its currency. In order to attract foreign investment in the IT industry, Georgia has established a Poti Free Industrial Zone.
After the collapse of the Soviet Union, Georgia’s economy is one of the fastest growing in Eastern Europe. Georgia ranks 5th in the world in terms of ease of doing business.
Also, according to a global cryptocurrency benchmarking study, Goergia has the second largest hashtag of Bitcoin in the world after China. This is mainly due to the existence of Bitfury mining facility near Tbilisi.
It should be noted that taxes in Georgia are relatively low and at the same time, only income from Georgian sources is taxed. Also, companies located in the Poti Free Industrial Zone enjoy a preferential tax scheme, as there are no VAT, dividends, profits or property taxes in this zone. Taxes on rents and salaries will still be affected.
Next is Belarus. It is a country in Eastern Europe where up to 10 million people live. It is noteworthy that the country’s economy is mainly based on production and uses the Belarusian ruble as a currency. More importantly, the government has recently adopted cryptocurrency as part of its IT program development and business, investment and talent attraction program abroad.
Not taxed on mining, trade and other business activities involving cryptology. Bitcoin gifts and inheritance are also exempt from tax. Tax-free status also applies to activities with foreign countries.
#10 Hong Kong
Let’s proceed with Hong Kong, which is a special administrative region of China and is located along its southern coast. Despite its small size, more than 7 million people live in Hong Kong, and its strong economy is driven by strong finances and trade. It has its own currency, the Hong Kong dollar, which obviously has a large trading volume.
Most importantly, Bitcoin is exempt from both VAT and capital gains taxes in the above country. However, the profit tax is still valid whether the business receives HKD or BTC. Finally, reporting can be done in any currency.
Japan lags behind when it comes to Bitcoin. The world’s first large bitcoin exchange, Mt. Gox, was in Tokyo.
It is noteworthy that in Japan there is a 7-tier system of taxation. Tax rates range from 5 to 45 percent, based on annual earnings. In addition, a housing tax is levied on 10 per cent of all income, with a maximum tax rate of 55 per cent.
Finally, Germany, with a population of 83 million, is often regarded as a leading European country due to its technological, industrial and economic capabilities. It is well known that the country is the third largest exporter of goods in the world and has a sustainable economy, a highly skilled workforce and large domestic capital.
However, it seems that Germany has a love and hate relationship with Bitcoin. Despite the circumstances that it will adopt the current currency, the government is still trying to impose further regulations on cryptocurrency.
Also, since Bitcoin is considered a legitimate currency in Germany, the country has announced that no transaction tax will be accrued.
However, if you have Bitcoin or other Altcoin for more than a year, you will not pay capital gains tax on their sale.
About Georgia - Country ( not in the US 🙂 )
Georgia is Post-Soviet County. Its Population is just 4 Million People. Georgia is not a member of European Union but recently we signed VISA Liberalization agreement with the EU, which means that Georgian citizens now can benefit from VISA free visit to European Union. Georgia’s Economic Development Process is Highest among Eastern European Countries. Georgian Government does its best to support International Business Development in The country. For this reason they provide simplified Procedures for foreigners coming to invest in Georgia. Georgia has been ranked on 8th Place for Ease of Doing Business in 2018 🙂 Georgia is on the top list for it’s business friendly climate.
Bitcoin Mining in Georgia
The estimated cost of mining one bitcoin in Georgia is $3,316. This is the second lowest cost of mining on our list of best countries for bitcoin mining. The Eastern European country is served by low electricity costs, which is evidenced by the massive mining farm owned by BitFury within the country’s borders.
Additionally, Georgia also has an attractive tax and regulatory climate for cryptocurrency miners. The law does not recognize mining as a taxable action which leads to very low taxes levied, if at all, on miners. In fact, lawmakers are very favorable toward cryptocurrency, having passed a number of laws that are designed to attract the blockchain industry to the country.
Georgian Taxes on Bitcoin
The Government is welcoming Crypto-Related Investment and has close ties with large bitcoin miner, Bitfury.
In February 2017, Georgia’s government approved a system whereby state property transactions will be recorded via the Bitcoin network. This will be developed in cooperation with Bitfury.