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Crypto Business

EST. 1996

Best Countries to Start a Crypto Business

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The cryptocurrency and blockchain industry has grown exponentially over the last decade, and is now soaring into mainstream popularity. Recent years have seen a rapid increase in the number of crypto businesses looking to innovate and profit in this exciting new space. 

Unfortunately, the open adoption of cryptocurrency by many governments around the world has lagged somewhat. Some governments remain firmly anti-crypto, while others simply haven’t adapted fast enough to know how to supervise and regulate this constantly evolving space. 

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This means that it is important for those looking to start a cryptocurrency business to carefully consider where to base themselves. It is a decision that can have significant effects on taxation, freedom to operate and grow, customer base, scope of allowable operations, and many other areas. 

We have provided an overview of five of the best countries in the world to start a crypto business. There are certainly many other options to consider so this should in no way be considered an exhaustive list. 

The Five Best Countries to Start a Crypto Business

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1. Malta

Malta consistently features on just about every list of crypto-friendly countries and best jurisdictions to start a crypto business. It is widely known as being a leader and pioneer in terms of its open, forward-thinking view towards the digital asset market and blockchain technology in general. 

Malta was the first nation to introduce a comprehensive regulatory framework for Cryptocurrencies which is governed by the Malta Financial Services Authority (MFSA).

These regulations help prevent money laundering and financial crime related to cryptocurrency, while being highly favourable and beneficial toward crypto businesses incorporated in Malta.

In 2018, Malta Lunched three “blockchain bills” to further help properly regulate and instil confidence in the growing Malta cryptocurrency markets. These were ‘The Malta Digital Innovation Authority Bill’, ‘The Technology Arrangements and Services Bill’, and ‘The Virtual Financial Assets Bill’. 

In addition to its particular attention and favouring of the crypto industry, Malta is also more generally an ideal jurisdiction to incorporate an offshore company. Overseas companies are not expected to pay income or capital gains tax in Malta, along with various other privileges. 

It is clear why some of the largest crypto exchanges in the world, such as Binance, along with many other successful cryptocurrency and blockchain businesses have decided to base themselves in Malta. 

2. Switzerland

Switzerland has taken a highly progressive and friendly stance toward the cryptocurrency industry. So much so that Zug, a town in Switzerland, has been widely dubbed “Crypto Valley”, with its top 50 cryptocurrency companies worth over $40 billion collectively. 

In 2021, Zug began allowing its residents to pay for taxes, municipal services, and everyday transactions with Bitcoin and Ethereum.

This means that these cryptocurrencies are viewed as legal tender and are therefore not liable for capital gains taxation. The extremely friendly and favourable environment for crypto businesses in Zug alone makes Switzerland one of the best countries in the world for cryptocurrency businesses and investors. 

   

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In addition, the rest of Switzerland also offers an advantageous landscape for both individual crypto investors and companies alike.

These come in the form of low or zero taxation depending on the nature of the transactions (individual traders are not liable for capital gains tax at all on crypto transactions), as well as a thriving and rapidly expanding crypto currency market with well structured regulation and friendly incorporation laws. 

3. Singapore

The international financial hub of Singapore, with its already thriving offshore sector, booming economy, and reputation as a fintech hotspot, has become a natural choice of country in which to setup an offshore cryptocurrency company. 

Singapore has taken the attitude that the cryptocurrency and blockchain industry should be well regulated and supervised, without stifling innovation and growth. So far, their approach has been highly successful.

Their comprehensive rules and regulations make it easier for crypto companies to understand where they fit in the regulatory framework whilst providing consumer protection and confidence. At the same time, the regulations are generally friendly and beneficial to companies wanting to setup shop in Singapore. 

Crypto tax treatment in Singapore is generally favourable. Individuals and companies are not liable for capital gains tax; however, they may be subject to income tax if they are an active trading company or accept payments in crypto. 

4. Estonia

Estonia is one of the most well-regulated and, at the same time, friendliest nations in the world for cryptocurrency, digital asset, and blockchain companies.

In fact, Estonia is so eager to market itself as a cryptocurrency hotspot and embrace blockchain technology that they are even considering launching their own national digital currency

The technologically advanced nation of Estonia has taken a positive stance towards cryptocurrency early on. They took the approach of ensuring comprehensive and fair regulations to encourage its safe and sustainable adoption in Estonia. This includes anti-money-laundering and tax legislation. 

Cryptocurrency taxes are favourable for crypto companies in Estonia. Transactions with bitcoin and other cryptocurrencies are taxed identically to other types of corporate activity, and there is no corporate income tax on crypto if the profits are not distributed. 

5. Seychelles

Seychelles has become a highly attractive jurisdiction for cryptocurrency companies who are looking to incorporate offshore. Well recognised as a traditional tax haven and ideal location for offshore company incorporation in general, Seychelles was quick to embrace cryptocurrency and market itself as a hotspot for the industry. 

Seychelles already offers offshore companies favourable tax treatment, as well as good levels of privacy and asset protection.

It has extended these benefits to cryptocurrency companies, and has since attracted industry-leading exchanges such as Bitmex, KuCoin, and Huobi to register on their shores. Seychelles is poised to become the next major crypto hub. 

For more: How to use Crypto in Your Business

Conclusion

If you intend to enter the cryptocurrency industry and start a crypto or blockchain based business, it is important to understand the implications that the jurisdiction in which you are based can have on the success or failure of your business, as well as the scope of your permitted business activities.

The aforementioned countries are ideal locations to explore for your crypto business. However, what works for one business might not suit another, so it is always essential to do your own careful due diligence and find the location that best suits your needs.

In addition, cryptocurrency regulations are constantly changing, which means you always need to find out what the current rules are, and be aware that they may change again in the future. 

It is highly recommended to enlist the services of an expert in offshore and cryptocurrency industries to help you determine the best route to take and practically assist you with the incorporation process. 

For more: Best Tax Free Countries For Crypto

 

  

  
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*Note for U.S. citizens: US citizens are limited in their tax reduction possibilities due to FATCA and CFC laws. Opening an offshore company can increase privacy and asset protection, but you can not eliminate your taxes without giving up your citizenship. If you are a US citizen you are obligated to pay taxes on all worldwide income. Read more here about FATCA and CFC laws.

 

 

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