Top 10 Crypto-Friendly Countries in the World | 2024 Edition
It might be a good idea to get a handle on the most crypto-friendly countries to relocate to if you are investing in crypto in a country with an unfriendly view of crypto right now.
As the importance and sophistication of cryptocurrencies continue to develop, more and more countries are starting to actively embrace this exciting digital asset and create an environment where it can thrive.
In this article, we’ll take a look at the top 5 crypto-friendly countries in 2023 as well as dig into some factors surrounding the regulations governing the industry.
Key takeaways:
- What makes a country crypto-friendly?
- What the top 10 crypto-friendly countries are.
- Why we choose El Salvador, Slovenia, Portugal, Estonia, The Netherlands, Switzerland, Japan, Singapore, Malta, and Germany as the most crypto-friendly countries.
- Some of the types of regulation and factors that crypto-friendly countries might employ.
- Crypto regulations from country to country.
What Are Crypto-Friendly Countries?
Crypto-friendly countries are countries that have a favorable attitude towards cryptocurrency and encourage crypto transactions on their shores.
This usually means that the government of the country has taken active steps towards the legalization and regulation of cryptocurrencies to create a welcoming environment for crypto companies and individuals who wish to take advantage of this new blockchain-based technology.
These countries also demonstrate a positive attitude towards ICOs (Initial Coin Offerings), forging legal and regulatory frameworks that allow companies to raise funds through the sale of digital tokens with relative ease.
Top 10 Crypto-Friendly Countries
If you're wondering which country to move to, wonder no more because here is our pick for the top crypto-friendly countries anywhere in the world.
#1: El Salvador
El Salvador stands out in the global arena as a unique and pioneering example in its approach to cryptocurrencies, earning it the title of the "crypto-friendliest country." This distinction stems from several bold moves and initiatives:
Firstly, El Salvador made history in 2021 by becoming the first country to declare Bitcoin as legal tender. This groundbreaking decision catapulted the nation into the crypto limelight, demonstrating a significant leap of faith in digital currencies and shaking the foundations of the traditional financial system.
FUN FACT: 🇸🇻 El Salvador mines #Bitcoin with 100% renewable energy from volcanoes 🌋 pic.twitter.com/qizHQUXm8A
— Bitcoin Magazine (@BitcoinMagazine) December 9, 2023
A primary motivation behind this move is financial inclusion. El Salvador is heavily dependent on remittances from its citizens working abroad. Traditional methods of money transfer are often costly and slow. By adopting Bitcoin, the government aims to offer a more efficient and less expensive remittance solution, potentially benefiting millions of Salvadorans.
To facilitate the adoption of cryptocurrency, El Salvador has invested in related infrastructure and initiatives. This includes launching the national digital wallet Chivo, installing Bitcoin ATMs, and initiating educational programs on cryptocurrency.
The government's investment in Bitcoin further underscores its commitment, to using the cryptocurrency for both distribution to citizens and funding various projects.
El Salvador also offers enticing tax benefits to attract crypto businesses and individuals. There are no capital gains taxes on Bitcoin transactions, and companies in the Bitcoin ecosystem receive income tax advantages. These incentives are designed to create a welcoming and prosperous environment for crypto-related enterprises.
El Salvador even made a video on why Bitcoin is key, watch it here below from 𝕏.
Why we don’t sell our #Bitcoin?
— Nayib Bukele (@nayibbukele) December 8, 2023
¿Por qué no vendemos nuestros #Bitcoin? pic.twitter.com/2QW0dUU6np
#2: Japan
Japan has been a leading light in the cryptocurrency space since the early days of Bitcoin. In 2017, the country took the groundbreaking step of passing legislation to protect people operating in the cryptocurrency market should any crypto exchanges go bankrupt.
And with very good reason. One of the very first and most famous exchanges, Mt Gox, itself based in Tokyo, collapsed in 2014 sending shock waves across the crypto world, something the Japanese government was keen to prevent happening again in the future.
Cryptocurrency was also recognized as a legal tender around this time, paving the way for crypto payments. This stepped-up demand for cryptocurrency from investors and meant retail stores started to accept bitcoin payments.
Among all this going on, AML/CFT and KYC processes became legal requirements for organizations carrying out transactions with cryptocurrencies.
In Japan, the crypto industry also has a certain amount of say in how it's governed. The Japanese Virtual Currency Exchange Association (JVCEA) is made up of more than twenty organizations that can pass and enforce regulations and standards for cryptocurrency exchanges in Japan.
Crypto businesses and users in Japan are subject to certain taxes, but the overall tax rate is quite low.
#3: Singapore
This tiny Asian nation is known as being one of the most crypto-friendly countries on the planet. So much so, that Coincub ranked it as the most crypto-friendly country in the entire world in 2021.
The government has taken deliberate steps to legalize and regulate the use of cryptocurrencies.
In Jan 2020, Singapore introduced the Payment Services Act. It's been described as "a forward-looking and flexible framework for the regulation of payment systems and payment service providers..." that also helps to establish clear registration requirements, as well as AML and CFT guidelines for cryptocurrency businesses. Existing cryptocurrency exchanges must receive a license from the Monetary Authority of Singapore.
After an influx of initial coin offering launches, MAS published guidelines in 2017, which were later followed by “A Guide to Digital Token Offerings,” clearly explaining their regulation in Singapore.
Cryptocurrency is officially designated as a financial asset (one particular type of digital token that normally functions as a means of exchange, a unit of account, or a means of accumulation). Transactions with cryptocurrencies are subject to VAT.
But Singapore also has some of the most favorable tax rates for crypto investors. Since capital gains tax simply isn't a thing there, this means it doesn't apply to the sale of cryptocurrencies either.
Click here to read the direct source from the Singapore tax office.
#4: Malta
This miniature Mediterranean island has a big reputation when it comes to being one of the most crypto-friendly countries in the world. The government of Malta has taken steps to create regulations designed to discourage fraud, while simultaneously encouraging growth, all to attract crypto-related business to its shores.
Given the billions being invested thereby crypto firms today, and several different crypto goliaths including Binance and OKEx setting up shop there, this tactic seems to be paying off nicely.
When it comes to crypto taxes, there's no capital gains tax on long-term profits you generate from selling your crypto, provided that is, it's recognized as a ‘store of value.’ That's great news if you want to hold your crypto for a while and sell for profit when the price rises.
Business income tax could potentially be up as high as 35 percent, but it varies based on factors such as residency and income generated.
Depending on where you fit into the taxation structure, it's possible you could be looking at as little as three percent, or perhaps even no taxation at all!
This is why many consider it to be a crypto tax haven and one of the most attractive crypto tax-free countries in the world.
#5: Germany
We mentioned earlier that Singapore topped the list of most crypto-friendly countries in 2021. Which country supplanted it in 2022? That would be Germany.
To give you an idea of the dedication there, it is the country with the most Bitcoin nodes outside the U.S. Given the smaller population and GDP of the country, this leaves us in no doubt as to the crypto-crazy credentials of the people.
Institutionally too, the country has taken a forward-thinking position on cryptocurrency. In an unprecedented move, it decided to include crypto investments as part of its domestic savings industry. Cryptocurrencies are therefore completely accepted as a form of long-term investment in Germany.
Germany was also one of the few countries in Europe that started properly regulating cryptocurrencies before the recent European Union’s Markets in Crypto Assets, or MiCA, regulatory framework.
Germany classifies cryptocurrencies as private money rather than a financial asset, which makes it easier to optimize taxes.
According to German laws, capital gains tax doesn't apply to cryptocurrencies if they are held for more than a year, and there is no value-added tax VAT on sale or purchase.
Anyone generating more than a €600 gain on assets that have been held for less than a year must pay income tax which may impact the efficiency of crypto trading.
#6: Estonia
Estonia's reputation as a haven for cryptocurrencies and blockchain enthusiasts isn't unfounded. It's a place where early regulatory clarity, government backing, and a thriving digital ecosystem all come together to create fertile ground for crypto innovation.
Back in 2017, when most countries were still scratching their heads about Bitcoin, Estonia established a legal framework for cryptocurrencies, giving businesses confidence and attracting investment. This early move put them at the forefront of the crypto game.
But it's not just about laws. The Estonian government actively embraces technological advancement and sees the potential of blockchain technology. Initiatives like the e-Residency program, attracting entrepreneurs worldwide with its digital accessibility, have made Estonia a magnet for crypto startups and established companies alike.
Beyond policies, Estonia boasts a robust digital infrastructure, with widespread internet access and a culture of e-governance. This provides the perfect platform for crypto businesses to operate and thrive. It's a tech-savvy ecosystem with the brains and infrastructure to keep up with the ever-evolving world of crypto.
And let's not forget the tax benefits. Estonia offers tax incentives for long-term crypto investments, making it an attractive destination for those looking to hold their digital assets without worrying about hefty capital gains taxes.
In other words, Estonia has a 0% tax on crypto gains.
#7: Netherlands
The Netherlands adopts a pragmatic stance toward cryptocurrencies, treating them as assets subject to standard wealth and income taxes. This approach differs from other countries that oscillate between outright bans and excessive enthusiasm, offering a more stable and predictable environment for both investors and businesses.
Amsterdam, the capital of the Netherlands, has become a hub for cryptocurrency innovation. It's the base for major exchanges like Bitonic and Bitfury, as well as numerous startups exploring blockchain technology. This bustling crypto community fosters a nurturing atmosphere for new ideas and business growth.
Another advantage is the high proficiency in English among the Dutch population, which simplifies navigation in the predominantly English-speaking crypto world. This language proficiency, combined with the existing crypto-friendly ecosystem, makes the Netherlands an appealing destination for international crypto companies and investors.
Moreover, the Netherlands is diligent in adhering to international AML (Anti-Money Laundering) and KYC (Know Your Customer) standards, balancing the avoidance of unnecessary regulations with serious measures against financial crimes. Such compliance builds trust and stability within the cryptocurrency sphere.
The Dutch government also demonstrates openness to the future of blockchain technology, recognizing its potential beyond just cryptocurrencies. They actively support research and development in this field, showing a commitment to the exploration and advancement of this transformative technology.
One of the examples is, in the summer of 2022, the Dutch Ministry of Finance launched a crypto education campaign for young people, coined as, Slim in Crypto - SIC - Wijzer in geldzaken.
#8: Slovenia
Slovenia, a country beautifully situated between the Alps and the Adriatic Sea has been proactive in the realm of cryptocurrency regulation as early as 2013, it was one of the first nations to establish a legal framework for virtual currencies.
This early adoption provided clarity and security for businesses and investors, positioning Slovenia as an attractive hub for crypto talent and a reliable center for crypto activities.
Secondly, Slovenia offers substantial tax benefits for long-term crypto investors. For those holding cryptocurrencies for more than two years, the capital gains tax is an appealing 0%. This policy makes Slovenia an attractive destination for individuals aiming to grow their digital assets without the burden of heavy taxation.
Here's a simple layout of the crypto tax law in Slovenia:
Personal Income Tax on Capital Gains from Trading in Virtual Currencies:
- If a natural person trades in virtual currencies, the capital gains from such trading are generally exempt from personal income tax, provided that these gains are not generated in connection with carrying out a business activity.
Tax Treatment of Income Generated by Virtual Currency Mining:
- Income generated by natural persons through virtual currency mining is taxed under the Personal Income Tax Act (ZDoh-2). If the mining activity is not considered a business activity, the income is taxed as "other income" at a flat rate of 25%.
- If the mining is part of a business activity, it is taxed under the standard rules for business income.
Corporate Income Tax (ZDDPO-2):
- Profits derived from virtual currency activities by corporations are subject to the standard corporate income tax rates in Slovenia. As of my last update, the standard corporate tax rate in Slovenia was 19%.
Value-Added Tax (VAT):
- The exchange of virtual currencies for traditional currencies (and vice versa) is exempt from VAT. Similarly, services related to virtual currency mining are not subject to VAT if the mining does not have specific clients, and new virtual currencies are automatically created by the network.
Tax on Financial Services (ZDFS):
- Some financial services related to virtual currencies might be subject to the Financial Services Tax, depending on the specific nature of the service.
The country also excels in fostering an innovative environment for blockchain technology. The capital, Ljubljana, is home to Europe's largest crypto center, BTC City, where over 500 shops and businesses accept cryptocurrency. This integration of digital and physical commerce normalizes the use of cryptocurrencies and promotes wider adoption.
Moreover, the Slovenian government is not just tolerant of cryptocurrencies; it actively supports them. Investments in blockchain research and development, hosting international conferences, and exploring blockchain integration in public services demonstrate the government's commitment to understanding and leveraging the potential of this technology.
#9: Switzerland
The picturesque alpine country of Switzerland is renowned for its banking and finance so it's perhaps no surprise to see it feature as one of the top crypto-friendly countries, too.
Switzerland is so crypto-friendly that it's even home to what's known as ‘Crypto Valley’ – a crypto hub in the low-tax canton (a kind of administrative area) of Zug.
The Swiss government has been careful to carve out a legal and regulatory framework friendly to both crypto businesses and individuals over the years and has some of the most favorable tax rates for crypto investors anywhere in the world, ensuring its status among the crypto tax-friendly countries.
Switzerland classifies cryptocurrency as a private wealth asset – meaning that private investors are exempted from paying capital gains taxes on crypto.
Your crypto income and the total value of your crypto assets are still subjected to taxation even if you are a private investor, though.
For businesses, unfortunately, the Switzerland crypto tax laws are pretty much the same as the laws on legal tender or fiat currency, meaning companies will still have to pay corporate income tax.
#10: Portugal
Portugal is known as a tax-free haven for cryptocurrency investors. If you hold digital assets like Bitcoin, Ethereum, or others for more than a year in Portugal, you're exempt from capital gains tax.
This policy is particularly attractive to long-term investors in the crypto space, allowing them to grow their digital wealth without the concern of hefty taxes.
Another significant aspect of Portugal's crypto-friendliness is the increasing acceptance of cryptocurrency payments across various sectors. From dining in restaurants to booking hotel rooms and even in real estate transactions, an increasing number of businesses are embracing crypto payments. This trend is not only normalizing the use of digital currencies but also paving the way for a future where cashless transactions are commonplace.
Lisbon, the picturesque capital of Portugal, has become a thriving hub for crypto talent. The city is home to major exchanges, blockchain startups, and venture capitalists, creating a dynamic ecosystem where innovation is fostered. This concentration of talent attracts further investment and contributes significantly to the growth of the crypto sector.
Moreover, the quality of life in Portugal complements its crypto-friendly stance. The country offers a desirable lifestyle with beautiful beaches, exquisite cuisine, and a relaxed culture, making it an attractive location for crypto entrepreneurs and investors who seek a balance between a digital-focused professional life and a leisurely personal life.
Crypto-Friendly Regulations
Some of the most obvious crypto-friendly measures are low or even non-existent crypto capital gains taxes, crypto income tax, and tax on crypto exchanges like crypto trading or spending.
However, as we've seen from the range of measures and regulations in our list, it's not all about low taxes and maximizing profits.
Other measures are designed to create a safe environment for those involved in the crypto space, keeping crypto markets secure and investors protected.
Some of the most common crypto-friendly regulations in this vein include KYC (Know Your Customer) and AML (Anti Money Laundering) regulations, and certain consumer protection regulations.
It's also important that to be truly crypto-friendly the regulations of any country are clear and easily grasped so people understand the boundaries they are operating within.
A complicated and fragmented landscape only serves to stifle innovation and growth and put people off getting involved in the crypto space.
Factors to Consider When Choosing a Crypto-Friendly Country
If you're on the hunt for a crypto-friendly country that suits you, here are some of the things you might want to take into account.
#1: Regulatory Framework
The most important factor is the legal and regulatory framework of the country. Make sure that the country has created favorable crypto regulation that actively encourages the use of digital assets.
On top of that, make sure that the regulatory framework is both clear and robust. There's no point in pitching up somewhere and operating under confusing conditions.
#2: Tax Rate
Understanding exactly what crypto tax is and how it works as well as the specific tax rate of the country you've got your eye on will help you make a more informed decision.
Always bear in mind that different countries have different tax rates, so do your research and find the countries with a favorable tax rate for crypto investors if that's your prerogative.
#3: Attitude
Finally, you should consider the overall attitude of the country towards cryptocurrency. Different countries may have different attitudes towards cryptocurrency.
Make sure you find one that has a positive attitude towards cryptocurrencies and has done all it can to create a welcoming environment for crypto businesses as well as individuals and their private money.
Crypto Regulations in Different Countries
Crypto regulations vary from country to country, based both on the attitude of those countries, as well as the particular approach those countries have taken.
European Union (EU)
The European Union, as of April 20, 2023, has implemented the MiCA regulation governing the issuance and provision of services related to cryptoassets and stablecoins to streamline the use of blockchain technology and virtual asset regulation in the EU.
It is the first and only legislation of its kind and acts as a trailblazer for other parts of the world.
United States (US)
In the United States, the Securities and Exchange Commission (SEC) is still involved in long-running debates about whether particular types of cryptocurrency are classified as securities or not, leaving a lack of clarity over exactly how the industry can operate in there long-term.
Elsewhere
Throughout the rest of the world, many countries have taken steps to legalize and regulate the use of cryptocurrencies, like Japan and Singapore as we've already talked about.
On the other hand, countries such as China have adopted a far stricter approach, going as far as to make cryptocurrency itself illegal.
Closing Thoughts
When we talk about crypto-friendly countries, what we mean are not just countries that have a favorable view towards crypto, but those that have also demonstrated this favorable attitude by creating frameworks that allow businesses and individuals to use and invest in cryptocurrencies.
These countries offer the best conditions for both businesses and individuals to get involved with and profit from the crypto industry.
If you're looking for somewhere to thrive in the crypto space, you could do a lot worse than some of the places mentioned in this article.
Whatever your plans though, always remember to do your research before making any decisions.
Updated: October 3rd, 2023 by Benedict Clark.
Updated #2: January 8th, 2024 by Joshua Yap.