Recent times have witnessed a rapid development of technology and an exponential growth of economies. This has led to several disruptive developments in the emerging financial markets across the world and at the forefront of that development is a decentralised digital asset known as cryptocurrency. It is a digital asset that uses a decentralized blockchain infrastructure to facilitate transactions, which makes it free from being reliant on any centralized regulatory authority. This guide will help you gain a comprehensive understanding about Best Countries to Invest in Crypto in 2024.
Why has Crypto Garnered Such Popularity?
Over recent years, there has been a growing popularity of crypto across the globe owing to its flexibility and lack of centralized regulation. This dynamic digital currency offers a safeguard against inflation, is cost-effective, and is better protected from administrative regulation of governments, which gives it an edge over the existent modes of traditional finance. These are some of the features which have fuelled the growing popularity of cryptocurrencies in the present day.
As this groundbreaking digital currency has garnered increasing attraction from the public, nations around the world have started tightening their regulatory norms to bring it under the traditional tax regime and supervisory regulations. This has also been accelerated by the growing instances of fraud and tax evasion that are being facilitated by cryptocurrency. While this may have helped reduce the ill practices associated with cryptocurrency, it has also made it harder for most people and companies to trade in this digital currency.
However, there have been certain countries that have taken a more liberalized approach to regulating cryptocurrency and offer a more crypto-friendly environment for crypto traders and investors. So, we at Adviso have complied a list of the top 7 crypto-friendly countries in the world in 2024 –
- Switzerland
Switzerland is one of the most sought-after financial destinations in the world due to its low taxes, secret banking laws as well as its political and economic stability. It has also taken several steps to facilitate a more crypto-friendly country, such as enabling companies to set up crypto business accounts in an attempt to eliminate crypto fraud way back in 2018. Further, Switzerland also recognizes cryptocurrencies as assets and even recognizes Bitcoin in some places. Back in 2016, Zug was the first city in the world to accept crypto as legal tender for payments.
Switzerland does not have income taxes or capital gains on cryptocurrencies for private investments by individuals unless they are done by professional traders. However, it does have something called a wealth tax on cryptocurrencies which varies for each municipality.
The favorable crypto regulations have made Switzerland one of the most sought-after crypto destinations with several leaders of the crypto industry such as Tazos, Ethereal, and Cardano setting up their head office in ‘Crypto Valley’ which is a cluster of crypto companies located in the city of Zug, Switzerland.
2. Slovenia
Slovenia was the highest-rated country in the EU in terms of crypto-friendly regulations in 2024. Apart from being one of the most liveable countries in the world, Slovenia was also very warm in its reception of cryptocurrency. With a history of economic instability and hyperinflation in the early 1990s, Slovenia has embraced cryptocurrency as a safer future alternative to the existing financial system.
The country has chosen to support the technological development of Bitcoin and become a stakeholder in facilitating its evolution as an alternative financial currency to traditional money. Further, Slovenia also does not impose any income or capital gains taxes on cryptocurrencies such as Bitcoins. They have also integrated blockchain technology in certain areas of public utility services such as digital identity registration and online voting and a growing number of business establishments have started implementing crypto-friendly norms.
While Slovenia is known for its crypto-friendly infrastructure, recently it has proposed a flat 10% tax for every fiat-crypto conversion above an annual limit of 15,000 euros or $17,387. Although the tax has created some flutter, the well-defined legal framework and the seamless crypto infrastructure have continued to attract crypto enthusiasts and investors from across the globe.
3. Argentina
Argentina is one of the fastest-growing cryptocurrency markets across the globe, with most of its residents showing a high degree of trust in this currency. The reason for this can be traced back to the tumultuous financial struggles and the high inflation that the country had gone through, which led to an erosion of public trust in the Argentine Peso. This has led to a search for an alternative means of currency that is free from central regulation and the decentralized cryptocurrency fits the bill perfectly.
While the country doesn’t accept cryptocurrency as legal tender, there is no ban on it like in China. A growing number of provinces such as Buenos Aries and San Luis have proposed to accept cryptocurrencies in day-to-day transactions. However, despite not being recognized as a legal tender, cryptocurrency is taxable as income in Argentina.
Argentina was one of the early adopters of cryptocurrency and has enacted relatively liberal regulations to encourage the growth of cryptocurrency as a more stable alternative to the increasingly unstable Argentine Peso. It has also taken certain key steps such as proposing to accept certain crypto cryptocurrencies for taxes in a bid to boost the use of virtual currency and bolster a crypto-friendly economy. The recent election of Pro-crypto candidate Javier Milei as the President of Argentina has only opened up more scope for the development of cryptocurrency in the future.
4. Estonia
Estonia has emerged as one of the hotspots of cryptocurrency markets in recent years by relaxing crypto norms and establishing strong laws for privacy in a bid to attract tech companies. The Estonian crypto industry is booming with a large number of investors looking to incentivize the crypto-friendly environment and clear legal framework regarding the regulation of cryptocurrency.
Further, Estonia imposes no taxes on income or capital gain from cryptocurrency for individuals, but such exemptions are not provided to firms or businesses. Additionally, crypto companies have to pay a 20% tax on the distribution of dividends to shareholders. However, the Estonian government has vowed to lower this tax to bring it in line with its aim of creating a crypto-friendly ecosystem.
These incentives and benefits such as low-cost licenses, e-residency, market access, etc. make Estonia an ideal location for crypto investors. Estonia has also established a strong security framework vide the Money Laundering and Terrorist Financing Prevention Act to regulate crypto activities and to curb illegal acts by issuing licenses to crypto companies.
5. Cyprus
Cyprus is one of the most crypto-friendly jurisdictions in Europe with liberal laws and a beneficial taxation structure. The Cypriot government has shown a keen interest in playing a pivotal role in the development of cryptocurrency and blockchain infrastructure as a safe alternative to traditional finance.
In view of the same, the nation has been vetting a cryptocurrency umbrella bill, called the Cyprus’ Digital Ledger Bill, which it aims to become the premier destination for companies and individuals looking to invest in the digital asset. The Cyprus Securities Exchange Commission (CySEC) which is the main body responsible for the supervision and regulation of cryptocurrency has led the drive to explore and develop innovative opportunities for various stakeholders in the emerging crypto industry.
The trade of crypto is taken like any other trade, but with a corporate tax of just 12.5%, Cyprus has one of the lowest rates of taxation across the globe and it also offers additional tax benefits for companies and individuals looking to invest in the island nation. These features make Cyrus one of the top crypto-friendly countries in the world.
6. Singapore
Singapore, a South Asian city-state is one of the most happening financial and economic hubs of the world and is one of the best places for commencing crypto activities. While it has a policy of regulatory supervision and active surveillance of trade activities to avoid crypto fraud and laundering, it also has liberal policy legislation to make it a crypto-friendly country.
Singapore also has no taxes on income or capital gains for individuals, but businesses involved in crypto business have to pay taxes. Further, a 7% GST is imposed on crypto trade but the Singapore government has proposed to do away with the said GST imposition by 2024. In a bit to boost ease of business, several exemptions for the digital currency and has also implemented a clear taxation structure make it easy for investors and businesses to pay their taxes.
With its crypto-friendly policies, Singapore has become a hub of crypto companies and exchanges such as Huobi, Bitstamp, Gemini, etc. These companies are provided licenses by the Monetary Authority of Singapore (MAS) under the Payment Services Act to regulate crypto activities and ensure that the interests of the consumers remain protected at all times.
7. Malta
Malta, a small nation in South Europe, is one of the leading nations to establish itself as one of the global hubs for crypto with its innovative policies. Its crypto-friendly regulations have encouraged crypto giants like Binance to move its operations into the nation. In 2019, the Maltese Prime Minister Joseph Muscat also proposed to bring further relaxations and exemptions to make Malta progress further as an ideal destination for crypto investments.
While it does not exempt crypto taxes, its tax rates and regulatory policies are rather reasonable and have attracted crypto traders and companies across the globe. While Maltese nationals who earn income or capital gains from cryptocurrency are taxed at 35%, non-residents of Malta enjoy a 30% exemption on the tax rate and have to pay only 5% of the taxes, which acts as an incentive to attract foreign crypto investors to the country.
Malta has passed a Virtual Financial Assets (VFA) Act, which is a comprehensive legislation specifically designed to boost the crypto and blockchain industry. It provides financial incentives for companies and individuals such as lower tax incentives and exemptions to reinvest their profits for expansion of their business in the country.
Wrapping Up – Best Countries to Invest in Crypto in 2024
Cryptocurrencies[1], with their decentralized infrastructure, have emerged as the next groundbreaking innovation in the world of centralized finance with growing regulatory supervision. Its growing popularity and a rise in instances of fraud and misuse have led to an increasing number of nations tightening their supervision and regulation of this digital asset.
In contrast, certain countries have adopted a crypto-friendly approach with liberal regulations and lower taxes to attract foreign traders and investors. It is the ideal time for investors and entrepreneurs to incentivize these relaxed regulations and start their crypto businesses in these countries. However, while benefitting from these crypto-friendly regulations, it is important to keep in mind that safety should be the primary concern as crypto-currencies have increasingly become a target of fraud and misuse due to its decentralised, digital existence.
The regulations in these countries keep fluctuating from time to time and violation of these regulations can attract heavy penalties, so it is best to speak to professional crypto agencies like Adviso which have an adequate understanding of the legal compliances and consequences to ensure that you can adequately expand your business interests without getting into unnecessary hassle.
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