Top 12 Crypto-Friendly Countries

Are you looking for the top crypto-friendly countries? What if you could move to a crypto-tax-free country?

New rankings suggest that Europe, from Germany to Portugal and Switzerland, is becoming an attractive destination amid the US pushing for more crypto taxes, while new regions like the UAE are emerging as top destinations.

Meanwhile, countries like Canada, Hong Kong, and the UK are advancing with new crypto tax reporting needs while finding crypto tax havens is becoming rarer.

Let’s explore the crypto tax landscape across countries, what to evaluate when considering a move, and rank the top 12 crypto countries in 2023.

What to consider before moving to crypto tax-friendly countries?

As crypto becomes more popular and attracts mainstream attention, government leans into this new asset class and sets up more regulations. Advanced crypto tax codes like in the US and the UK already reveal a high degree of complexity concerning crypto trading as an individual or a business.

While some countries still do not have a concrete tax regime for crypto trading, the situation may change in the short term with the popularity of Bitcoin and the increased number of countries with crypto regulations that can be used as a benchmark. As a result, the number of crypto-tax-free countries will likely end soon.

As such, there are many other factors you should evaluate before deciding to move countries beyond the current tax rate. Let’s cover some of them.

1. Crypto tax regimes for foreigners.

In some countries, there are tax benefits to attract foreign investment from individuals. These could range from In some countries, there are tax benefits to attract foreign investment from individuals. These could range from investment in companies to buying real estate besides tax advantages on income, retirement, capital gains, etc.

Before considering a move, you should properly consult with a tax lawyer in your country to make sure you’re on top of every detail.

2. Upfront Moving Costs to new countries.

The moving costs could differ widely from country to country due to the cost of living, especially due to the investments you have to make to get the tax benefits as a foreigner. As a result, you should evaluate your crypto holdings and expected returns versus the investment you’ll have to make and access if the benefits outweigh the costs. This analysis may be particularly important for crypto traders with smaller holdings.

3. Cost of Living/Quality of life/Economic Development in crypto tax-friendly countries.

So, you like the tax benefits and the conditions as a foreign investor. But, what about the country itself? The living conditions and economic development of crypto tax-free or crypto tax-friendly countries differ a lot.

For example, consider property prices, educational system, medical facilities, or security level before deciding. Moreover, each country’s economic profile and professional opportunities are crucial if you’re planning to stay for the long term.

The top 12 crypto-friendly countries

Discover the top 12 crypto-friendly countries in the world, from regions with no long-term capital gains taxes for crypto investors to countries with no income taxes.

Check the list of the top 12 crypto tax-friendly countries:

1. Puerto Rico

Puerto Rico comes with no surprise on this list. However, if you’re currently a US citizen, you have other options to evaluate before deciding to move abroad. The US probably has the most comprehensive tax regime regarding crypto anywhere in the world.

Its complexity can cause issues for beginner traders, while the continuous development of crypto brings additional challenges for tax authorities. However, the trend will continue for countries to adopt regulations. If you’re already in a country where you can work with crypto daily with a common regulatory framework, this could be beneficial. Other countries will soon follow, and the economic development and innovation in the US surpass most countries.

If you’re looking to reduce your crypto tax bill, consider other options first. For example, take advantage of the benefits of long-term capital gains taxes when selling after 12 months of holding crypto. Moreover, if you’re in a state with high state taxes (i.e., California), you can move to more crypto-friendly states (i.e., Wyoming, Texas). This move can significantly reduce your taxes from crypto trading. Check our report on the 7 trends for crypto in 2021 with more details on this scenario.

If you’re a crypto whale, maybe you can move to Puerto Rico through one of their tax programs, formerly named Act 22, now referenced as Chapter 2 of the Puerto Rico Incentives Code (Act 60 – 2019). If you meet the requirements*, you can enjoy a lower income tax rate and a tax-free rate for dividends and capital gains.

*A move to Puerto Rico entails many other costs (e.g., yearly fees, investments) that you need to consider besides meeting the requirements.

2. UAE

The UAE, in particular, Dubai, is one of the most crypto-friendly countries in the world, offering low to no taxes for crypto investors.

If you are a tax resident of Dubai and work as a crypto investor, you can enjoy 0% income tax, while the country also offers other tax benefits in the capital gains and wealth areas. 

Moreover, the UAE is heavily investing in becoming one of the main crypto hubs, with several programs to attract more crypto companies and investors to its region.

3. Portugal

In 2016, the Portuguese tax authority issued an official letter clarifying that individuals who do not perform a professional activity around crypto won’t pay capital gains or income taxes on those earnings.

In 2023, a new law was passed to introduce new crypto tax rules. Trading cryptocurrencies for fiat (e.g.,  Euros) is taxed at 28% if you held your assets for less than 12 months. However, if you hold your crypto for over 12 months, you won’t need to pay any taxes over your gains.

One of the best aspects of this new rules is the tax exemption for NFT trading or crypto-to-crypto trading. However, crypto mining and staking are also now taxed in the country. Despite that, Portugal remains one of the most crypto-friendly countries with its benefits for long-term investors while offering many other tax benefits for foreigners (e.g., real estate purchases). Check our crypto tax in Portugal guide for 2023.

For more information on these benefits, check the Non-Habitual Residents program (“Residentes Não Habituais”). Please also consider consulting with a professional tax lawyer in Portugal for more details on your particular situation.

4. El Salvador

El Salvador became the darling of the Bitcoin world after President Nayib Bukele made BTC legal tender in the country.

The country’s leadership has the goal to set Bitcoin as one of the main sectors of its economy while boosting adoption and attracting investors and companies.

The country has launched several initiatives, including Bitcoin-based bonds while offering no income and capital gains taxes for Bitcoin investors.

5. Malta

Malta has a friendly approach to crypto (i.e., VAT exemptions). Moreover, Malta has a more developed tax regime than Portugal, which can be useful when accessing the move. Check more details on the tax regime in Malta here.

Malta has similar salaries to those in Portugal, while several businesses in the crypto space have operations there, which could be an advantage for crypto traders.

6. Singapore

Singapore is a key location for crypto trading in the global landscape and one of the most important in Asia.

The tax authority in Singapore has a clear regime regarding crypto, whether you’re an individual or a business. If you’re looking for a place to move to in Asia, Singapore may be one of the best options with some tax benefits. Check more details on the tax regime in Singapore here.

The cost of lying in Singapore is higher than in other options in this list, but the country also offers much higher salaries, high security, and a great crypto ecosystem.

7. Vanuatu

Vanuatu, the small island on the Pacific, is one of the most crypto-friendly regions, offering virtually zero taxes for crypto investors. 

If you live in Vanuatu, as a crypto investor, you can enjoy no capital gains/income tax and no VAT. From a tax perspective, Vanuatu is one of the most crypto-friendly countries, despite not offering the same opportunities as other global hubs like Singapore, Dubai, or the US.

8. Bermuda

The British island territory is one of the best countries for crypto taxes, offering no capital gains taxes or income taxes.

If you’re able to obtain residency in Bermuda, you can enjoy these. The only disadvantage of some of these islands is the lack of a hub around cryptocurrency.

9. Cayman Islands

The Cayman Islands, like Bermuda, offer similar tax benefits for crypto investors, like no income or capital gains taxes.

The cost of living in the Cayman Islands can be high, and you need to fulfil requirements to enjoy these perks.

10. Germany

Germany offers a great tax regime for crypto traders. If you hold your crypto for longer than a year, you won’t pay any taxes on capital gains as an individual. You still have crypto reporting obligations, but the current regime is a good option for beginner and non-professional traders to benefit from crypto while saving in taxes.

As crypto evolves, regulation in Germany also follows with more discussion about operations like mining, airdrops, DeFi, staking, etc. Beyond crypto, Germany is one of the largest economies in the world, offering great opportunities and quality of life (i.e., security, health).

11. Slovakia

Slovakia is the latest addition to the list of the best places for crypto investors, with a new law drastically reducing crypto taxes.

With the new rules, long-term crypto investors will be able to enjoy a 7% tax on crypto profits if they hold their assets for over 12 months before selling. Previously, crypto was taxed at a much higher rate, between 19% and 25%.

Crypto income will also not be subject to the country’s 14% health insurance tax.

12. Slovenia

Slovenia is one of the best countries in Europe for crypto, offering a low flat tax rate.

In Slovenia, converting crypto to FIAT is taxed at 10%, while a new proposal has been set to reduce this rate to 5%. 

What is the most friendly country for crypto?

The UAE is now considered the top crypto-friendly destination, with its government launching initiatives to attract crypto businesses and investors with low to zero taxes.

Other countries like Germany, Portugal, Malta, Switzerland, Slovenia, Malaysia, Singapore, Vanuatu, Georgia, and many others offer very low crypto taxes and, in some cases, zero taxes for crypto investors, being some of the most crypto-friendly countries worldwide.

Is crypto taxed in Portugal?

Since 2023, cryptocurrency trading has been taxed in Portugal at different tax rates depending on the crypto activity (trading/income). 

If you trade cryptocurrencies for fiat (e.g., EUR) before holding your assets for over 12 months, you’d be taxed at a capital gains level, incurring a 28% rate. If you choose to incorporate (”englobar”) your other income, you’d be taxed at your ordinary income tax rate. 

Other crypto activities like crypto mining and staking are taxed at an income or business level, depending on how you operate. 

However, trading crypto for other cryptocurrencies or trading NFTs are tax-free events in Portugal.

Is Portugal crypto-friendly?

Portugal is one of the most crypto-friendly countries in the world, with new rules exempting crypto investors from taxes if they hold their cryptocurrencies for over one year before selling. 

Portugal was one of the last crypto tax havens in the world, with no rules for crypto trading and taxes.

In 2023, new rules were put in place, taxing cryptocurrencies if you sell them before holding them for a year and taxing activities like mining and staking. Nevertheless, Portugal is still one of the most crypto-friendly countries in the world, with a 0% crypto tax rate for long-term investors (hold assets for over one year before selling).

Looking for crypto tax-friendly countries?

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Which EU country is most crypto-friendly?

For long-term crypto investors, Portugal, Germany, and Malta are the most crypto-friendly countries in the EU, enabling a 0% tax rate for investors holding their crypto for over one year before selling.

Other countries in the European Union, like Slovenia, also offer a very attractive crypto tax rate (10%) for investors, being one of the most crypto-friendly overall.

Is Dubai crypto tax-free?

Yes, you don’t pay income taxes in Dubai, making it crypto tax-free regardless of your gains, while Dubai Free Zones are great hubs for crypto businesses to flourish.

The UAE, in particular, Dubai, is one of the most crypto-friendly places, with its government having several funds and initiatives to boost crypto and Web3 adoption while attracting investors and companies.

Where in Europe is the lowest tax on crypto?

Countries like Portugal, Germany, Switzerland, Malta, Belarus, Slovenia, Slovakia, and Georgia are some of the ones with the lowest taxes for cryptocurrency investors.

Some of the countries in this list – Portugal, Malta, and Germany – offer 0% tax for long-term (over 12 months) crypto investors. 

Other countries have fixed flat rates for cryptocurrency gains, such as Slovenia and Slovakia. Countries like Switzerland, Belarus, and Georgia offer no capital gains tax for individual crypto investors.