The emergence of cryptocurrency has changed how we think about money, investment, and even where we choose to live and work. For crypto investors, entrepreneurs, and digital nomads, finding a country with a welcoming stance towards digital assets can make all the difference in financial management. These crypto-friendly nations offer not just potential tax advantages but also supportive regulatory environments and bona fide communities.
Here at Remitly, we are all about making cross-border finance less complicated. In this guide, we’re going to break down what makes a country crypto-friendly, what you should look out for, and point out some of the best places for crypto users around the world.
Understanding crypto-friendly countries
First, what exactly do we mean when we talk about a crypto-friendly country?
Definition of a crypto-friendly country
A crypto-friendly country is one that has a positive or at least clearly defined regulatory and legal stance towards cryptocurrencies like Bitcoin, Ethereum, and other digital assets. This often includes:
- Clear regulations: Governments in these countries have established laws or guidelines for how cryptocurrencies are treated, bought, sold, and used, providing a level of certainty for individuals and businesses
- Favorable tax policies: This is a major draw. Some countries have low or even no capital gains tax on crypto investments for individuals, or offer incentives for crypto-related businesses.
- Support for innovation: They may actively encourage blockchain technology development and host a growing ecosystem of crypto startups and services
- Acceptance and adoption: A general openness to the use of cryptocurrencies in everyday life or as a recognized financial asset
Importance for crypto investors and entrepreneurs
For crypto investors, a friendly jurisdiction can mean significantly lower tax burdens on their investment gains. For entrepreneurs building businesses in the blockchain space, it means operating in an environment with clear rules, access to talent, and potentially government support or incentives.
For digital nomads or immigrants who earn or transact heavily in crypto, it means easier banking, greater acceptance, and a lifestyle that connects with their financial tools. Choosing the right country can directly impact your bottom line, operational ease, and overall peace of mind.
Key factors for choosing a crypto-friendly country
When evaluating countries, several key factors come into play. Picking the right country involves balancing these factors with your individual needs. Here are the main factors to consider.
Regulatory framework and legal tender
- Clarity of regulations: Is cryptocurrency legal? Are there clear rules for exchanges, businesses, and individuals? Vague or hostile regulations create risk. Countries like Switzerland and Singapore are known for their detailed regulatory frameworks.
- Legal tender status: While rare, some countries like El Salvador have adopted Bitcoin as official legal tender, meaning it must be accepted as payment. This stands as the highest level of government endorsement.
- Licensing requirements: If you plan to operate a crypto business, it’s important to understand the licensing requirements, which can vary immensely. Some jurisdictions, like Malta or certain free zones in the UAE, have specific licenses for Virtual Asset Service Providers (VASPs).
Tax policies and capital gains tax
Because they can eat into crypto profits, taxes are an important factor to consider. A few things to check off are:
- Capital gains tax: This is the tax on profits from selling crypto. Some countries have no or very low capital gains tax on crypto for individuals. Others, like Germany, offer tax exemptions if assets are held for over a year.
- Income tax: If you earn crypto as income (e.g., through mining, staking, or salary), how is it taxed?
- VAT/GST: Are crypto transactions subject to Value Added Tax (VAT) or Goods and Services Tax (GST)? Most countries exempt them when treated as financial assets.
- Reporting requirements: Understand what you need to report to tax authorities. Tax laws are complex and change frequently, so professional advice is essential.
Quality of life and lifestyle considerations
Think of everyday demands like:
- Cost of living: Some crypto havens can be expensive (e.g., Switzerland)
- Infrastructure: Reliable internet, banking services, and transportation are relevant
- Community: Is there a thriving crypto and tech community? This can be important for networking and support.
- Political and economic stability: A stable environment is generally preferred for long-term living or investment
- Ease of residency/visa: For expats, the process of obtaining visas and residency permits is often a concern. Our Digital Nomad Visa guide shares insights into visas for remote work.
Overview of top crypto-friendly countries
Several countries are recognized for their welcoming approach to cryptocurrencies.
El Salvador
El Salvador grabbed headlines in 2021 as the first country to adopt Bitcoin as legal tender, aiming to boost financial inclusion and remittances.
- Regulations: The Bitcoin Law mandates acceptance of Bitcoin by businesses where technologically feasible, supported by the government’s Chivo wallet. Specific licenses exist for Bitcoin and Digital Asset Service Providers.
- Taxes: Bitcoin profits are exempt from capital gains tax, and there are generally no taxes on crypto gains for foreign investors
- Quality of life: There is an affordable cost of living and a tropical climate. However, the country faces challenges with crime rates and economic instability.
Pros:
- Pioneering Bitcoin adoption as legal tender
- Tax-free Bitcoin transactions for capital gains
- Government-backed crypto initiatives and infrastructure
Cons:
- Infrastructure for crypto use beyond Bitcoin is still developing
- General safety and economic stability concerns persist
Portugal
Portugal has been a popular destination for crypto enthusiasts, though its tax policy has recently been adjusted.
- Regulations: Cryptocurrencies are legal and regulated. The Banco de Portugal oversees Virtual Asset Service Providers (VASPs).
- Taxes: Until 2023, crypto gains were often tax-free for individuals if not their sole professional income. Now, gains from crypto assets held for less than a year are taxed at a flat rate of 28%. Long-term gains (held over a year) may still benefit from exemptions, and income from professional crypto activity is taxed progressively.
- Quality of life: There is a high quality of life, pleasant climate, relatively affordable cost of living for Western Europe, and attractive residency options like the Golden Visa and Digital Nomad Visa
Pros:
- Still potentially favorable tax treatment for long-term crypto holders and certain activities
- Established digital nomad and expat communities
- Good infrastructure and access to the EU
Cons:
- Recent tax changes have added complexity and reduced some of the previous tax advantages for short-term crypto traders
- Bureaucracy can be a challenge
Singapore
As a global financial hub, Singapore has a well-defined and generally supportive approach to digital assets.
- Regulations: The Monetary Authority of Singapore (MAS) regulates cryptocurrencies under the Payment Services Act, providing clarity for businesses and investors. Strong emphasis on AML/KYC.
- Taxes: There is no capital gains tax in Singapore, so individuals are not taxed on profits from buying and selling cryptocurrencies. However, businesses dealing in or accepting crypto are taxed on their income/profits.
- Quality of life: Excellent infrastructure, high safety, politically stable, and a major international business hub
Pros:
- Clear and respected regulatory framework
- No capital gains tax for individual crypto investors
- Strong tech and innovation ecosystem
Cons:
- Very high cost of living
- Strict regulatory compliance and licensing for crypto businesses can be demanding
Switzerland
Known for its financial stability and innovation, Switzerland, particularly the canton of Zug “Crypto Valley”, is a leading global crypto hub.
- Regulations: The Swiss Financial Market Supervisory Authority (FINMA) provides clear guidelines for ICOs, crypto exchanges, and blockchain companies. Regulations are generally supportive but thorough.
- Taxes: For individuals, capital gains from selling cryptocurrencies held as private investments are generally tax-exempt. However, if trading is deemed professional or business activity, or if crypto is earned as income, it can be subject to income and wealth taxes. Cantonal tax laws vary.
- Quality of life: Exceptionally high quality of life, stable, safe, and beautiful scenery. Strong financial infrastructure.
Pros:
- World-renowned “Crypto Valley” ecosystem
- Clear and established regulatory environment
- Generally tax-free crypto capital gains for individuals holding as private assets
- Politically and economically very stable
Cons:
- Extremely high cost of living
- Tax rules can be complex, with distinctions between private investment and professional trading
United Arab Emirates (UAE) – Dubai
The UAE, particularly Dubai, is actively positioning itself as a major global crypto hub.
- Regulations: Various free zones (like Dubai Multi Commodities Centre – DMCC) and regulatory bodies (like Dubai’s Virtual Assets Regulatory Authority – VARA) offer specific licenses and frameworks for crypto businesses
- Taxes: The UAE has no federal income tax for individuals, and this generally extends to profits from cryptocurrency investments. Corporate tax has been introduced, but it may not apply to all crypto activities, especially within free zones.
- Quality of life: Modern infrastructure, cosmopolitan lifestyle, tax-free income for individuals. Hub for international business.
Pros:
- Generally 0% personal income tax, including crypto gains for individuals
- Proactive government support for crypto and blockchain innovation
- Dedicated crypto-friendly free zones with specific licensing
Cons:
- High cost of living in prime areas like Dubai
- The regulatory structure is still developing across different emirates and free zones
- Cultural norms are different from Western countries
Malta
Once dubbed “Blockchain Island,” Malta was among the first to create a comprehensive legal framework for cryptocurrencies and Distributed Ledger Technology (DLT).
- Regulations: Specific legislation for Virtual Financial Assets (VFA Act), covering ICOs, exchanges, and other service providers
- Taxes: The tax treatment of crypto depends on its classification. Coins and tokens held for their utility or as a store of value might not attract capital gains tax. However, crypto trading considered as day trading or business income is taxable.
- Quality of life: Mediterranean lifestyle, English widely spoken, EU member state
Pros:
- Pioneering and comprehensive regulatory framework
- Attractive for crypto businesses seeking clear rules
- Potential for favorable tax treatment for certain types of crypto holdings/transactions
Cons:
- Tax situation can be nuanced and depends on the nature of the crypto activity
- Banking for crypto companies can still be challenging
- The initial hype of “Blockchain Island” has faced some global regulatory scrutiny
Germany
Germany, a major European economy, provides a stable environment with specific tax advantages for long-term individual cryptocurrency holders.
- Regulations: Germany recognizes cryptocurrencies and has a regulatory framework in place, with BaFin (the Federal Financial Supervisory Authority) overseeing aspects related to financial services. The approach is considered balanced, focusing on investor protection while allowing for innovation.
- Taxes: A key feature for individuals is that if cryptocurrencies are held for more than one year, any profits from their sale are considered tax-free private sales. However, if crypto is sold within one year of acquisition, gains are usually treated as income and taxed at the individual’s personal progressive income tax rate (after a small annual exemption of around €600). Crypto earned through activities like staking or mining is mainly classified as taxable income.
- Quality of life: Germany has a very high quality of life, excellent public infrastructure, a strong social safety net, and is a viable economic force in Europe
Pros:
- Significant tax advantage for individuals holding crypto for over a year (tax-free capital gains)
- A stable country with a strong economy and high living standards
- The regulatory environment for crypto is relatively clear and established
Cons:
- Short-term crypto gains (held less than a year) are taxed as regular income, which can result in high tax rates for active traders or those with substantial other income
- While assuring benefits for long-term holders, the tax rules can be complex, mostly in distinguishing income from various crypto activities versus capital gains
- The general cost of living can be relatively high, especially in major urban centers
Countries with no crypto tax
While “no crypto tax” often has nuances, countries traditionally known for very favorable crypto tax regimes for individuals (especially for long-term holding or non-professional activity) include or have included:
- UAE (generally no income or capital gains tax)
- Singapore (no capital gains tax for individuals)
- Switzerland (no capital gains tax on private movable assets for individuals)
- Germany (tax-free if held over one year by individuals)
- Belarus (tax exemption on crypto income and mining until 2025, but political situation is a factor)
- Cayman Islands, Bermuda (no direct personal or corporate income tax, no capital gains tax)
- Panama (territorial tax system, foreign-sourced crypto gains generally not taxed)
Making the move: tips for crypto enthusiasts
If you plan to relocate for crypto-related reasons, here’s some advice:
E-residency and banking options
- E-Residency: Estonia’s e-Residency program allows non-residents to establish and manage an EU-based company entirely online. This can be appealing for crypto entrepreneurs needing an EU presence, access to EU banking and payment services, though it doesn’t automatically grant tax residency or right of physical entry.
- Banking: Accessing traditional banking services can still be a challenge for crypto individuals and businesses, even in friendly jurisdictions. Look for banks that are explicitly “crypto-friendly” or fintech platforms that bridge crypto and fiat currencies. Research options in your target country thoroughly.
Optimizing crypto investments and minimizing tax liabilities
- Understand local tax laws thoroughly: Don’t rely on general information. Tax laws related to crypto are new, evolving, and sometimes complex. What constitutes taxable events varies.
- Record keeping: Carefully track all your crypto transactions, such as dates, amounts, values in fiat currency at the time of transaction, and purpose.
- Seek professional advice: Consult with tax advisors and legal professionals who specialize in cryptocurrency and international tax law in both your current country of residence and your intended new country. This is to ensure compliance and legally optimize your tax position.
- Structure your activities: How you structure your crypto activities (e.g., as an individual investor, a professional trader, or through a corporate entity) can have ample tax implications.
FAQ
What makes a country crypto-friendly?
Clear regulations, low taxes, blockchain infrastructure, and quality of life define crypto-friendly countries.
How do I choose the best country for my crypto business?
Evaluate regulations, taxes, banking, and market opportunities to match your business goals.
Which country is best suited for crypto nomads today?
There’s no single “best” country for every crypto nomad or investor. The ideal choice depends heavily on individual circumstances and priorities. If minimizing taxes is your primary goal, countries like the UAE, Singapore (for individual investors), or those with specific long-term holding exemptions might be attractive.
For crypto businesses, jurisdictions with clear licensing regimes and supportive ecosystems like Switzerland, Malta, or Dubai’s free zones could be optimal.