5 Crypto-Friendly Countries to Base Your Business
Choosing the best country to set up a business is vital in this digital age, and especially so for crypto companies. As governments around the world continue to learn more about cryptocurrencies and elect to either crack down on them or allow them to flourish, some jurisdictions emerge as being better than others for launching a crypto startup.
Take Time Choosing Where to Base Your Business
Many governments are still deciding what to do with cryptocurrency. While some are friendly towards it and see the benefit of crypto companies basing themselves in their jurisdiction, a number are openly hostile. If you’re planning to launch a crypto-related business, it makes sense to study the regulatory framework and government policy in a number of jurisdictions before reaching a decision.
Do you want to set up a business in a country that has historically had low taxation? If the country you are considering is receptive to crypto, and there are no signs of impending tighter regulation, will you still be able to attract investors? Does it have a vibrant ecosystem of fintech companies that will support your business? These are all matters that should be considered before setting up shop. The following crypto-friendly countries all have their attributes and are worthy of consideration before you settle on your HQ.
USA: Booming Bet Right Now
This U.S. is unsurprisingly a hotbed of crypto companies. Many high-profile cryptocurrency exchanges, custody providers, wallet developers, and miners operate from the U.S. and the government is working to enact a clearer legal framework for crypto-related businesses. Policy varies state to state, and while taxation guidelines in the U.S. have generally been unclear, in December lawmakers filed a bill to create tax exemptions for certain cryptocurrency transactions. The cryptocurrency community in the U.S. is thriving and the technology is slowly entering the mainstream. For example, Ohio last year allowed companies in the state to pay a variety of taxes, from tobacco sales tax to employee withholding tax, with bitcoin.
Switzerland: Established and Secure
Switzerland has long been a crypto-friendly nation. Its government has been open to the idea of cryptocurrency, encouraging crypto startups to set up shop there, and in December announcing a new legislative approach to blockchain. Switzerland’s tax rate is also attractive. In general, the country boasts a low-tax environment for businesses and many bitcoin service startups are already based in Switzerland. The country’s tax regulator considers cryptocurrencies to be assets, subject to wealth taxes that must be declared in annual returns. A 2018 report declared the top 50 cryptocurrency and blockchain-related companies in Switzerland’s “Crypto Valley” alone to be worth $44 billion. Bitcoin ATM manufacturer Lamassu moved to Switzerland due to problems with maintaining a bank account elsewhere and has been able to thrive in the progressive landlocked nation. And with some of the best universities in Europe, including the École polytechnique fédérale de Lausanne, which hosts an innovation park, there’s plenty of talent to choose from.
Japan: Ahead of the Game
With the number of crypto companies in Japan growing – December saw 190 companies express the intention of market entry – the tech-savvy country is an ideal jurisdiction to set up a cryptocurrency business. The island nation has a booming bitcoin and cryptocurrency industry and was one of the first and only countries to recognize cryptocurrency within its legal system. Adoption is growing in the country too, with many businesses, restaurants and cafes accepting crypto for payments compared to other countries and jurisdictions on this list. Last year the country’s Financial Services Agency published its draft report of new cryptocurrency regulations. The country also allowed 16 of the country’s largest crypto exchanges to build a self-regulatory body. This step shows how Japan is ahead of the game in terms of regulation and allowing crypto companies to flourish. As a result, more and more startups are moving to Japan to take advantage of the friendly regulatory environment.
Singapore: Low Tax, Lots of Talent
The business-friendly, low-tax and tech-friendly Singapore is another jurisdiction worth considering. Although the previous regulatory framework for crypto wasn’t entirely clear, and some businesses were unable to expand due to troubles with bank accounts, the country’s financial regulator said in October that it was very open to crypto companies working with banks to reach an agreement to allow these businesses to grow. Last year, the central bank of Singapore finalized the country’s new regulatory framework for payment services, which now includes cryptocurrency. Singapore isn’t quite on a par with Japan, but it’s moving in the right direction. Its large big tech and business community would also be ideal for attracting investors and talent for a crypto-focused startup.
Luxembourg: Most Economically Developed
A tiny country of little under 600,000, Luxembourg boasts one of the world’s largest cryptocurrency exchanges, Bitstamp. Tokyo-based Bitflyer also has offices in the European country after being granted a Payment Institution license to operate in the European Union. Luxembourg has long been a financial hub and business-friendly nation and the country clearly sees the potential of cryptocurrencies. Crypto exchanges in Luxembourg are governed by the CSSF and must follow the same rules as other financial institutions. Regarding taxes, cryptocurrencies are treated as intangible assets, and are not subject to income tax until they are disposed of, while cryptocurrency transactions are exempt from VAT. The country is also a good place to draw talent for a crypto company, with the innovative University of Luxembourg which is currently working to enhance the security of crypto assets.
What do you think about these countries and the way they deal with crypto companies? Let us know what you think about this subject in the comments section below.
About the author – A former agency reporter and local news hack, Mathew was thrilled to learn about crypto when he found out it could help him move money abroad – and not get ripped off by banks. He writes for bitcoin.com with a particular focus on banking the unbanked, privacy coins and Latin America.
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This article was sourced from Bitcoin.com