The 10 Most Crypto-friendly Countries (2023)

If your crypto investments are doing well, you might start considering packing up and moving to a crypto tax haven to avoid paying taxes. While in most countries around the world cryptocurrencies are subject to Capital Gains Tax or Income Tax - there are still some crypto tax havens and countries where you'll pay (way) less crypto taxes.

7 min read
August 3, 2022
The Baseflow Team

If your crypto investments and NFTs are doing well, you might start considering packing up and moving to a crypto tax haven to avoid paying taxes. While in most jurisdictions around the world cryptocurrencies are subject to Capital Gains Tax or Income Tax, there are still some crypto tax havens and countries where you'll pay (way) fewer crypto taxes.

That's why we decided to write this list with everything you need to know about the best crypto tax-free countries to move to in 2022.

Top 10 Countries with Crypto-friendly Taxes

Knowing how to avoid or minimize crypto taxes comes down to understanding each country's regulatory framework and specific treatment of cryptocurrencies – and that country’s Capital Gains Tax laws. If you’re a crypto investor looking to move abroad, we’d suggest the following crypto tax havens:

Portugal 🇵🇹

If you like good weather, incredible food, low cost of living, great culture, and tax-free crypto, you should consider moving to Portugal.

The Southern European country is considered a leading crypto hub that attracts entrepreneurs and private money from all over the world with the flexible regulations that make it one of the best places in the world to live if you want to minimize crypto taxes. Since 2018, all proceeds from selling crypto have been tax-free. In even better news, crypto trading isn’t considered investment income either, so crypto trading is also tax-free as cryptocurrencies have the same consideration as regular currencies like the EUR or the USD.

Provided you’re not a business, your crypto is also exempt from VAT and Income Tax in Portugal. So for the vast majority of investors - Portugal is a crypto tax-free country. However, for crypto companies, digital currency is treated the same way as fiat currencies.

Earlier this year, the Portuguese Minister of Finance tried to pass new crypto regulation to make cryptocurrencies subject to taxation in the future, this attempt wasn't successful, and the crypto-friendly status of the country remains the same.

If you're a crypto investor interested in using the Non-Habitual Resident (NHR) program to move to Portugal for crypto tax, you should definitely check out Baseflow's relocation solution and our guides for NHR in Portugal.

Singapore 🇸🇬

There's a reason many fintech companies and cryptocurrency exchanges - like KuCoin and Binance - are based in Singapore. Singapore is a crypto tax haven for both individuals and businesses.

Singapore doesn't have Capital Gains Tax, so individual firms and investors are not liable for any Capital Gains. You won't have to pay Capital Gains Tax when you dispose of crypto by selling or trading it. Also, cryptocurrencies are treated as intangible property from a tax perspective. You won't have to pay Goods and Services Tax (GST) when you spend crypto on goods and services, as the transaction is considered a barter trade, not a payment.

Of course, you can't avoid all taxes. If you act as a business and accept crypto payments, you will pay Income Tax on it. Similarly, if a company's core service is related to crypto trading, like a crypto exchange, the company would still be liable for Income Tax.

So overall, it's very advantageous to trade crypto from a tax perspective in Singapore. And this is one of the reasons that the crypto industry is booming in Singapore.

Malta 🇲🇹

The blockchain technology island is also a crypto tax haven. Malta considers Bitcoin and other cryptocurrencies as a ‘unit of account, medium of exchange or a store of value’ - so you won't have to pay Capital Gains Tax on long-term gains from cryptocurrencies provided it is considered a store of value. Great news for BTC hodlers.

Despite this, crypto trades are treated like day trading of stocks or shares and carry the usual Business Income Tax rate of 35%! However, there are complex structuring options within the Maltese tax system that allow you to reduce this tax rate to between 0% to 5% - it all depends on how much you earn and your residency.

Puerto Rico 🇵🇷

Puerto Rico is one of the preferred options for US residents both in terms of lifestyle and lax tax laws. While Puerto Rico is an unincorporated territory of the United States, it’s considered a foreign country as far as Federal Income Taxes go. This means the country gets to set its own tax laws.

When it comes to crypto taxes, Puerto Rican residents pay a much lower Territorial Income Tax compared to the US Federal Income Tax rate. Also, digital assets acquired while you were a resident of Puerto Rico are completely exempt from Capital Gains Tax.

Note that it really matters when and where you bought your crypto as to whether you’ll pay tax on it. If you’re a US resident who acquired crypto prior to moving to Puerto Rico - you’d still need to follow the IRS crypto tax laws. However, if you acquire crypto after establishing your legal and tax residency in Puerto Rico your crypto is totally exempt from Capital Gains Tax.

Switzerland 🇨🇭

Switzerland has long been considered one of the best places to live in the world when it comes to taxation due to its modern and efficient policies. The Swiss Canton of Zug is even known as the Crypto Valley for hosting a great number of crypto startups, crypto businesses, and organizations (such as Ethereum).

You’ll have to pay Income Tax on crypto mining, as well as on day trading if you're a professional trader. You’ll also be subject to the Wealth Tax - which is levied on your total net worth each year. The Wealth Tax Rate depends upon the Canton in which you live.

However, crypto profits are exempt from Capital Gains Tax for individual investors who don't trade crypto on a professional level. This means selling, and trading crypto is tax-free for most investors.

Belarus 🇧🇾

Belarus is a fully tax-free crypto country: no income tax, no capital gains tax, and no corporate tax on crypto.

Back in 2018, Belarus took a very particular approach to cryptocurrencies by legalizing crypto activities and exempting all individuals and corporations from crypto taxes until 2023. This means all activities that involve crypto-assets (including mining and day trading) are considered as personal investments, which makes them exempt from both Income Tax and Capital Gains Tax.

This unusual law was created to boost Belarus’ digital economy, and it's expected to be reviewed in 2023 - so soon Belarus might not be a crypto tax haven anymore.

Cayman Islands 🇰🇾

The Cayman Islands have been known to be a tax haven for businesses and investors for a long time - and crypto is not an exception to their friendly lax tax laws. The Cayman Islands Monetary Authority imposes no Corporate Tax on businesses and no Income Tax nor Capital Gains Tax on residents of the country.

El Salvador 🇸🇻

El Salvador, also known as El Hodlador, made headlines around the world as the first country in the world to make Bitcoin a legal tender. With it, the country hopes to attract more international investment into the economy. To further promote this, El Salvador also exempts foreign investors from paying any taxes on capital gains or income made on Bitcoin.

As Bitcoin is a legal tender in the country, businesses have to accept payments in Bitcoin - so you can pay for a huge range of goods and services in Bitcoin that you wouldn’t be able to anywhere else in the world.

Georgia 🇬🇪

Georgia is one of the best crypto tax-free countries in the world - both for individuals and corporations. The Georgian Ministry of Finance says that individuals in Georgia are exempt from any Income Tax on profits that arise from selling cryptocurrency. Also, as Georgia doesn't consider crypto to be 'Georgian sourced', crypto is not subject to Capital Gains Tax in Georgia.

Profits from crypto held within a legal entity are subject to a relatively low 15% corporation tax (CIT).

Malaysia 🇲🇾

Malaysia is a crypto-tax-free country too. As cryptocurrencies are not considered capital assets nor legal tender by Malaysian authorities, crypto transactions are tax-free for individual investors.

However, you must be careful: the Malaysian Inland Revenue Board says that crypto transactions are only exempt from tax when they are not regular or repetitive. So if you’re trading like a day trader, you’ll still have to pay tax on your crypto.

Similarly, profits of businesses and corporations dealing with crypto-assets would be subject to Income Tax, regardless of whether these profits are being made in crypto or fiat currency.

Now what?

Be aware most tax offices and governments around the world haven’t quite yet figured out how to deal with crypto and its taxation. This means that there’s still a lot of discrepancy on how crypto is taxed: In some countries, you’ll pay multiple taxes on your crypto, while in others, like some of the countries above, you’ll pay none at all. Also, these rules are still evolving and changing, so today’s crypto tax havens can become tomorrow’s crypto-shy countries. Many countries in Europe, like Germany, Estonia, or The Netherlands, are figuring out friendly regulations to attract cryptocurrency businesses.

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