Entrepreneurs Continue To Look For Countries With Friendly Laws To Establish Their Crypto Startup
The crypto market is booming globally. The boom in the crypto market is powered by increased adoption, use cases that include extremely convenient cross-border transactions, and the potential to make exponential gains through investment. But going forward, the fate of crypto would be decided by two critical factors: government regulations and CBDCs (Central Bank Digital Currencies). More than 15 major countries including the US, Canada, India, Sweden, and Russia have either issued their CBDC or are working on it. The increased adoption of crypto has motivated entrepreneurs to build their dream crypto startup. But, investing in crypto is completely different from starting a crypto-focused startup. For starting a crypto startup, you need to register your business through the government. As of now, there are only a few countries that can be deemed fit to register your crypto startup.
The Rise of The Crypto Economy
Crypto and blockchain startups raised a whopping $25 billion in 2021, an eightfold increase from the previous year. Hundreds of major crypto startups came into existence in 2021 and the trend appears to continue in 2022 and beyond. 2021 saw a wave of investments with VCs injecting their money into crypto startups. While a pullback in the prices of Bitcoin and other major crypto tokens has led to a feeling of uncertainty in the minds of investors, the emergence of trends like DeFi, Metaverse and Web3 has kept the crypto economy ticking. The presence of influencers like Elon Musk, Mark Cuban, Michael Saylor, and Francis Suarez has acted as a booster for new-age entrepreneurs dreaming to build their dream crypto startup from scratch. However, governments stand divided in their approach toward crypto. This is why some countries are considered more crypto-friendly than others. If you are someone looking for the best countries to build your crypto startup from scratch, this blog is for you.
What Are The Top Countries To Register Your Crypto Startup?
Cryptocurrencies have been around for quite some time now and almost every country has come up with some regulations to levy taxes on crypto gains, promote crypto or declare crypto transactions illegal. For a new business to bloom, it is important to compare these regulations and find the best countries to register your crypto startup.
Here are some of the top crypto-friendly countries globally:
- El Salvador: When it comes to crypto, El Salvador is so friendly to investors and entrepreneurs that it has recognized Bitcoin as a legal tender. Also, the country has not imposed any tax on income or gains from Bitcoin. El Salvador aims to emerge as a cryptocurrency hub. The country’s government is building the world’s first Bitcoin city. Anyone investing in three Bitcoins in El Salvador gets free citizenship of the country. Hence, it is really easy for any entrepreneur holding Bitcoin to get citizenship in the country. El Salvador is undoubtedly one of the top countries to register your crypto startup.
- Malta: Malta is one such country where several crypto and blockchain startups thrive. Binance, the world’s largest crypto exchange, has expanded its operations since the introduction of strict regulations in Hong Kong. A huge number of crypto traders, miners, and entrepreneurs are active in the island nation and the absence of a concrete regulatory body makes it a safe haven for crypto investors. If you have a solid startup idea with crypto at its core, you can register your startup in Malta very conveniently.
- Portugal: Portugal’s popularity in the crypto market continues to rise due to the friendly attitude of the government. While Portugal taxes income in crypto, capital gains and trading are free of any tax. Moreover, the country has introduced a Golden Visa program. Under the Golden Visa program, Portugal will allow non-EU citizens to get a residence permit and eventually a passport just by investing in crypto. The crypto community is loving the tax-free nature of life in the country and more and more crypto enthusiasts are rushing to Lisbon to add to the country’s popularity. Here are some of the points that make Portugal one of the top countries to establish your crypto startup:
- 0% tax on foreign income
- 0% tax on crypto trading
- 0% tax on wealth
- 10% tax on pension
- No minimum stay requirement
- Singapore: Singapore has emerged as a fintech hub in entire Southeast Asia. Singapore’s central bank encourages innovations around cryptocurrencies while monitoring illegal activities closely. There are several factors that make Singapore an ideal place in Asia to establish your crypto startup including the absence of tax on capital gains from crypto and non-taxable individual and corporate cryptocurrency funds. However, Singapore-based crypto trading companies or businesses accepting payments in crypto are subject to income tax.
- Switzerland: In the first, Swiss banks started offering crypto companies business accounts in 2018. Top financial institutions in Switzerland encourage legitimate crypto business activities in the country. Cryptocurrencies are classified as assets in the country and Bitcoin is recognized as a legal tender in some locations. Anyone trading or holding cryptocurrencies in their own account are free from capital gains tax. The city of Zug is one of the reasons Switzerland qualifies as one of the top countries to register your crypto business. Zug, also known as the ‘Crypto Valley’, is a major crypto hub in the country with several crypto and blockchain businesses, startups, shops, and entrepreneurs operating in the city.
- Estonia: Estonia is one of the most crypto-friendly nations in the world and the country has accelerated its plans to launch its own cryptocurrency, Estcoin. Crypto startups get specific licenses from the government to run their companies in the country. Estonia is emerging as a major crypto hub in Europe. Bitcoin and crypto transactions in the country are taxed in Estonia in the same manner as any other corporate activity. Estonia’s LHV bank has also launched a Cyber Wallet app, a blockchain-based wallet that allows users to send digital representations of actual euros. With the digital economy booming in Estonia, it could be one of the top countries to register your crypto startup in the world.