Are you a crypto investor thinking of packing your belongings and embarking on a journey to a crypto tax free country to avoid crypto tax payment? Tax authorities around the world still hesitate on what to do with crypto taxes, so there is a lot of discrepancy between how crypto is viewed and taxed in different countries. And events like a recent bitcoin drop add to a slight mess in this area.
There are countries that impose heavy taxes on crypto investors and their businesses in the form of a capital gains tax and income tax. Fortunately, there are crypto-friendly countries where you pay zero or little tax on your crypto investments. Below is a list of 10 crypto tax free countries you can move to in 2022 with requirements for physical and tax residence.
Relocation to another country may be a hard decision to make even for an ambitious crypto investor, so you need a good reason to venture. There is a business side to that – if you are an entrepreneur engaged in buying, storing, and selling crypto and you strive to conduct business in a crypto tax free country, look for the tax scheme that suits you best. But there is also an emotional side, and we provided some facts for prospective crypto investors to find the country that will seem appealing.
Remember that obtaining tax residence in one country often means that you will not be subject to tax in other countries, but there are a few exceptions to that rule. For example, countries such as the United States of America levy a tax on the income of all its citizens, extending this fiscal levy to their income from sources worldwide. Moreover, the current country of residence (and, accordingly, tax residence abroad) of Americans, as a rule, does not matter. You can read more on choosing the best tax residence.
The information provided below cannot replace legal or accounting advice on your particular case but is an invitation to consider the most tax-friendly opportunities for crypto investment. We recommend that you contact our specialists for professional advice in the current situation.
Germany
Crypto is not absolutely tax free in Germany, but investors can easily avoid crypto taxes on a legal basis if they know the rules.
In Germany, bitcoin and other crypto tokens are considered private money, and they are subject to individual income tax (but not capital gains tax). It means that investors can hold their crypto for more than one year and pay no taxes on it – even if they later sell, swap or spend it. Any gains from crypto sales that do not exceed €600 during a calendar year are tax free.
If you engage in short-term trading, mining, and staking, you are subject to tax on that activity – unless you have held your crypto assets for more than 10 years. If you get your wages in crypto, you will be taxed as well.
However, there is one little nuance: businesses that are tax residents of the country still need to pay taxes on the profits generated from crypto transactions through corporate income taxes.
We should also mention a new crypto tax law that took effect in 2021 in the EU, Germany included, which stops the trading of all crypto derivatives. So if you are focused on trading prediction contracts, it’s better to choose a non-EU country.
Tax residence for a crypto investor in Germany
According to the provisions of the German Income Tax Act (Einkommensteuergesetz), natural persons who continuously spend more than six months in the Federal Republic of Germany are generally considered to be residents of that country for tax purposes.
The decision of whether or not to grant the crypto investor the status of a German tax resident also depends on whether the individual concerned has a center of vital (personal and economic) interests in the country.
But not every crypto investor can move to Germany without unnecessary bureaucracy. If you are an EU citizen, you can move to Germany freely and live in that country for most of the year (longer than 6 months) for the purpose of subsequent registration of German tax residence.
On the other hand, crypto investors from a non-European country will have to apply for a residence permit in Germany on some grounds (an application for a residence permit can be made, for example, on the basis of employment).
Why should a crypto investor move to Germany?
There is something beyond crypto tax reasons, of course. The country’s capital, Berlin, boasts a high standard of living due to fast internet connection, security, great nightlife, freedom of speech, a large number of English-speaking expats, LGBT friendly society, and plenty of wild green spaces. Besides, Berlin is the most affordable western capital! If you need help with a German visa, see how we can help.
Singapore
Singapore is home to many crypto exchanges, like KuCoin and Phemex, because it is a crypto tax haven for investors:
- There is no capital gains tax in the country, so selling or trading crypto in the country is a tax free activity.
- Buying goods or services using crypto is viewed as barter trade rather than a payment, which means that your crypto token is tax-exempt.
Still, you cannot be exempted from absolutely all taxes. Singapore-based companies that accept payments in crypto will still be subject to income tax – in the same way as the businesses whose main service is crypto trading.
Tax residence for a crypto investor in Singapore
In Singapore, corporate tax residence is determined by the place of business operations, while individuals are considered to be Singapore tax residents if they spend more than 183 days in the country during the reporting year.
Singapore offers entry visas and permits for foreign entrepreneurs, which enable eligible crypto investors to obtain a residence permit in this crypto tax free country without much hassle.
Why should a crypto investor move to Singapore?
Singapore is a vibrant and dynamic destination to live, work and do your crypto business, and also an excellent country to play! Here are just a few things to take advantage of:
- Very high living standards, personal safety and security
- Cutting-edge infrastructure: international ports, public transport, innovative high-rise structures
- Country’s political stability
- Sustainable economic growth
- Balanced lifestyle of work and play
- A multicultural mecca where you can enjoy art festivals, sports attractions, and tourist destinations
As you can see, it is no wonder people flock to Singapore to experience a really versatile environment and the multiple benefits that the country offers. Contact our experts to consider relocation opportunities for a crypto investor to this crypto tax haven.
Malaysia
Singapore’s neighbor, Malaysia, is also an attractive country for crypto investors: crypto tokens here are tax free for individuals as they are not considered capital assets or legal money.
However, this comes with a caveat: your crypto transactions should not be frequent or regular to be tax free. That is, day traders are still subject to tax on their activity. Businesses operating in the country will have to pay income tax on any profits received from crypto, and it does not matter whether these profits are in fiat currency or crypto.
Tax residence for a crypto investor in Malaysia
A tax resident is a person who has been in the country for more than 182 days. A foreign crypto investor will need a residence permit, permanent residence, or citizenship of Malaysia to stay in the country for such a long time.
There are several immigration routes to for investors to this crypto tax free destination leading to the accelerated acquisition of the physical resident’s status in Malaysia. This option is available, inter alia, to wealthy individuals with a minimum equity of 2 million US dollars who transfer funds to a bank account in Malaysia, as well as to experts and professionals of all kinds wishing to work in the country.
Why should a crypto investor move to Malaysia?
The country’s capital, Kuala Lumpur, is a special city to live in due to its affordable cost of living, special atmosphere, and good infrastructure. Here is a list of things to enjoy:
- Modern and spacious skyscrapers to rent an apartment where you will also find grocery stores, security staff, private parking, a swimming pool, gym, etc.
- Relaxed leisurely environment where you can explore interesting sights throughout the year as the temperature is around 30 degrees all the time
- High standard of living at a relatively low cost
- Cutting-edge healthcare system that attracts medical tourists
- Well-planned, modern, and inexpensive public transportation system
- Kuala Lumpur is the gastronomic hub of Asia
If that sounds exciting enough, you can contact our experts for information on relocation opportunities for a crypto investor.
Portugal
If you want to combine a sandy beach with a European crypto tax free environment, Portugal should be the country of your choice. It is an EU leader in this regard as all income received from crypto sales has been tax free since 2018. Crypto trading is not viewed as investment income in the country, so investors can engage in it without VAT or income tax payment.
But it should be borne in mind that businesses naturally need to pay taxes on any income received, so this also applies to transactions with crypto tokens.
Portugal looks like an ideal country for tax-concerned crypto nomads. However, in May 2022, the Portuguese tax office seems to have made a U-turn and signaled that crypto paradise could face changes at some point in the future. Portugal’s Minister of Finances has announced the changes in the country’s crypto tax laws but there has been no confirmation or clarification so far. Ask our experts for updates!
Tax residence for a crypto investor in Portugal
You are considered to be a Portuguese tax resident if you have a house or apartment (which can be rented) in the country which is the center of your vital interests, or if you have lived in this European country for more than 183 days.
These rules are also relevant for beneficiaries of the profitable NHR (Non-Habitual Resident) tax scheme used by thousands of foreigners.
Crypto investors with EU citizenship can move to Portugal, but they need a registration certificate to legally stay in the country for longer than three months. A crypto investor from an EU country moving to Portugal will also need tax numbers for fiscal residence purposes.
Citizens of non-European Union countries moving to Portugal should apply for a valid visa, and then begin the process of applying for a residence permit in this crypto tax free community. A residence permit will allow them to obtain permanent residence and citizenship in the country over time. You can speed up and simplify this process by obtaining Portuguese citizenship by making investments.
Why should a crypto investor move to Portugal?
Lisbon, the capital of Portugal, is a city that will not disappoint you. Climate, hospitality and the quality of life are all there for you to enjoy! But there are a few more details that will show the real character of Lisbon:
- Ranks first by quality of life and feeling of hospitality
- Affordable costs of living
- Tasty and diverse gastronomy, many dishes, appetizers, and desserts to enjoy
- Beaches and landscapes to explore
- Monuments to visit
- Colonialist history, ornate architecture and tradition of Fado music
Lisbon is the oldest city in Western Europe that has a unique vibe and a magical way of relaxing people. Move to this lively and colorful place to roam its narrow, sloping cobblestone streets.
Malta
Malta is yet another crypto tax free country: bitcoin is recognized as a unit of account, means of exchange or store of value. It means that you are not subject to capital gains tax if you use crypto as a long-term investment.
However, if you operate as a crypto day trader (acquire crypto tokens and then sell them during the day), this activity will be considered equivalent to trading shares or buying and selling currencies, and the crypto profits received in the country are subject to tax as business income (35%). Fortunately, there are structuring alternatives in Malta’s tax system that allow for crypto tax rate diminishment – which depends on your earnings and country of residence. If you fall into the right category, you can pay as little as 3% or even 0% tax on your crypto profits.
Tax residence for a crypto investor in Malta
Tax residence in Malta is determined on the basis of the duration of an individual’s residence in the country and/or the existence of a center of vital interests there. A crypto investor will need to live on the island for most of the year (183 days) to obtain tax residence.
EU/EEA/Swiss citizens are allowed to travel freely to Malta, but non-EU/EEA/Swiss crypto investors will have to take advantage of the Global Residence Program and purchase real estate in the country worth at least €275,000 (or pay the rent of up to €9,600 per year) to become tax residents.
You can also use the Malta Residence Visa Program (MRVP) which allows acquiring a legal residence in this European crypto tax free country by making an investment into stocks and/or government bonds, or the Nomad Residence Permit scheme specially designed for people working from home.
And if you need a visa to Malta, here are the details you may need.
Why should a crypto investor move to Malta?
The city of Sliema in Malta has everything you need for a comfortable life, work, and relaxation: from good hospitals, sunny beaches on the Mediterranean coast, and a rich nightlife to fast internet connection, a developed transport system, and a high level of physical security. The cost of living here is lower than in many European cities (monthly rent in the city center costs around €800) and you will surely enjoy Maltese cuisine that infuses Sicilian, English and Mediterranean flavors. There is definitely a lot to see, taste, and experience here!
Belarus
In March 2018, Belarus decided to take a very insightful approach to crypto tokens by adopting a law that legalized crypto transactions in the country and also exempted the individuals and businesses engaged in such transactions from the need to pay various taxes on proceeds from crypto.
According to these legislative innovations, crypto mining, day trading, staking and holding are considered personal investments and are exempt from income tax and capital gains tax until at least 2023 (when the law may be reviewed). This step was made to bolster the country’s digital economy boom and become one of the tax free crypto countries.
There is still one year to go, so you’d better act on it if you want to enjoy the crypto tax benefits of this country.
Tax residence for a crypto investor in Belarus
Individuals are considered Belarusian residents for tax purposes if they stay in the country for more than 183 days a year. And, more importantly, such individuals should not have tax residence in any other country. If the crypto investor is not a citizen of Belarus, a residence permit must be obtained in order to reside in Belarus for more than 90 days.
Why should a crypto investor move to Belarus?
The capital city of Belarus, Minsk, offers numerous advantages, including financial accessibility and low cost of living, excellent places to work and a friendly attitude to foreigners.
On the dark side, you will rarely hear English spoken here, and freedom is not the strong point of the country headed by an autocratic leader.
On the bright side, Belarus takes 53rd place worldwide according to Human Development Index (HDI) which assesses life expectancy, per capita income, and education. The country performs well in major public health indicators (and even exceeds the US by infant mortality rate!).
The Belarusian economy is recovering after years of decline and shows steady GDP growth which is expected to continue over the decade. You may decide to join the country’s upward trend!
Minsk has really wide streets, an interesting mix of Soviet-time and modern architecture, and plenty of amazing parks to visit. While the city may look not as appealing as some Western European capitals, you may as well fall in love with its special atmosphere and charm.
Switzerland
Switzerland has recently acquired the nickname of a crypto valley due to its modern policies on crypto tax. It is a country where numerous reputable crypto organizations are based, including Crypto Valley, Ethereum Foundation, and Libra Association.
Switzerland is a crypto-friendly country, which does not mean that it is crypto tax free. It just implies a different approach of Swiss authorities to crypto tax laws.
Let’s start with the pros. If you are an investor trading crypto tokens as an individual, the gain on crypto sales will be treated as tax free capital gains. So, selling and trading crypto is tax-exempt for many investors.
Naturally, there are cons to consider. First of all, professional crypto trading is subject to business tax, and the person engaged in such activities must have a professional trader’s license. Second, if you receive crypto tokens as a salary, you will still need to declare it to pay income tax.
One more peculiarity of the country’s tax system is the wealth tax levied on your total net worth each year, which may vary significantly depending on the canton where you live. When you calculate the annual wealth tax base, you will have to add the total amount of crypto assets in your possession.
Tax residence for a crypto investor in Switzerland
Swiss tax residents are subject to fiscal levies on wealth and income from sources around the world. Swiss tax residence is granted to those who decide to settle in Switzerland or stay in the country for at least 30 days in search of work or for at least 90 consecutive days without looking for a job.
A crypto investor will need a residence permit in Switzerland to stay in the country for a long time. There are different categories of residence permits and residence requirements for citizens of EU and non-EU countries. For example, you can obtain a residence permit in Switzerland through a tax agreement.
Why should a crypto investor move to Switzerland?
One of the most popular destinations is Zurich, the largest city in Switzerland. People are attracted here due to high salaries, good quality healthcare, and remarkably low crime rates, while businessmen see Zurich as one of the world’s largest financial hubs. Here are some peculiarities of the city:
- Luxury living: the high cost of living is completely justified by exceptional cleanliness, water sanitation score of 99.99, and first-class public service
- According to a study, 98% of Zurich inhabitants are happy with life
- State-of-the-art public transportation system
- Plenty of open green spaces
- Convenient location in the heart of Europe
- International hub for arts and sciences
Zurich is a really breathtaking opportunity with a lot of things that a prospering crypto investor can enjoy!
El Salvador
El Salvador is a newly minted crypto tax haven and the first Latin American country that made bitcoin legal tender in September 2021. In El Salvador, citizens can use crypto to settle debts in US dollars and even pay for a wide range of goods and services (from groceries to a house) – something you cannot do anywhere else in the world!
The country wishes to attract more investments into its economy, so it exempts foreign crypto investors from any taxes on bitcoin gains or income. So if you are a bitcoin investor, El Salvador could be a great country to choose.
Tax residence for a crypto investor in El Salvador
In El Salvador, a crypto investor will be considered a tax resident if he:
- Resides in the country on a temporary or permanent basis for more than 200 consecutive days during the year
- Has his major source of income in El Salvador
The country’s President pays a lot of attention to crypto prospects to stimulate the economy and promises to offer Salvadorian citizenship for three bitcoins, but this program has not been launched yet. We are watching El Salvador closely, and hope to return to you in the future with good news on the opportunity of obtaining an El Salvador citizenship and passport in return for a crypto investment.
Meanwhile, have a look at passports for crypto investors that are available right now.
Why should a crypto investor move to El Salvador?
Here are good reasons to opt for this crypto-friendly country:
- Low cost of living (you will need just $1,000 to live comfortably)
- Tropical climate (you can enjoy the beach all year round)
- Plenty of year-round activities: hiking in a natural park or volcano, sunbathing at the beach or surfing sports
- Lots of local and national celebrations which include customs and traditions going back to colonial times
- Warm and friendly locals
- You can choose a bustling urban environment, a relaxing beach community or a quiet mountainous settlement to live
One issue we should definitely talk about is safety. In fact, San Salvador, the capital city, was the 3rd most dangerous city in the world in 2015. Sounds scary, doesn’t it? However, the current administration has worked really hard: in 2022, San Salvador is less dangerous than Baltimore, US.
In view of the above, find out everything about the area you want to move to and its neighborhood (in the same way you would do for any other country) before moving to El Salvador.
Cayman Islands
The Cayman Islands is a reputed financial center and one of the most creative and business-friendly countries that has long been a tax haven for businesses and investors, and crypto is not an exception. The country extended its lax tax laws on crypto and does not levy income, inheritance gift, capital gains, corporation, withholding, or other similar taxes, including on the issuance, holding, or transfer of crypto tokens.
The Cayman Islands won’t tax you if you have a small crypto business or even an entire company. However, take into account that the cost of living may seem high.
Tax residence for a crypto investor in the Cayman Islands
The Cayman Islands imposes no direct taxes whatsoever on its residents: no income tax, property tax, capital gains tax, payroll tax, or withholding tax. This is compensated by duty taxes levied on most goods imported to the country (from 22% to 27%), which will mean higher prices of purchases for you.
Why should a crypto investor move to the Cayman Islands?
It looks like everyone dreams of living on a Caribbean island with its sunny beaches and laid-back lifestyle – and you will find this (and much more) in the Cayman Islands. Still, let’s have a more detailed look at the benefits that this country may offer:
- It is a strong and stable environment for business as the Caymans is a British Overseas Territory overseen by the British Government
- An incredibly strong financial services industry, some of the world’s best accountancy and legal firms
- 100 nationalities living in the country offer an incredible diversity of entertainment, shopping, restaurants, and socializing
- High-standard nurseries and schools
- Immediate needs of the country’s new residents are very well addressed
- Some of the best telecom services in the world
The Cayman Islands are a state-of-the-art paradise where there is something for everyone.
Puerto Rico
Puerto Rico is a US unincorporated territory that is considered a foreign country as far as federal income taxes go, so it can establish its own tax rules – including taxes on crypto.
Digital assets acquired while you reside in Puerto Rico are completely free of capital gains tax, which is the reason why the country has become an attractive destination for crypto investors. However, if you bought any crypto outside the territory, you will have to address the revenue body in your native country to get clear on taxes.
Tax residence for a crypto investor in Puerto Rico
Puerto Rican authorities will consider you a tax resident if you spend 183 days in the country during a calendar year or generate profit from services provided in Puerto Rico.
If you decide to qualify for tax exemptions, you will need to physically move to the country, fill out some forms and apply for a tax exemption decree from the Secretary of Economic Development and Commerce of Puerto Rico.
Why should a crypto investor move to Puerto Rico?
A tropical climate with average temperatures of 28° C throughout the year, beautiful beaches, majestic mountains, and good food… Let’s look at other advantages that a country’s resident can appreciate:
- Low rental ($420 per one-bedroom apartment)
- Good-quality inexpensive public healthcare services
- Secluded and uncrowded beaches with pure white sand and crystal-clear water
- Surfing waves and coral reefs for scuba divers and snorkelers
- A lot of mountains and forests to explore
- Fresh fruit and vegetables all year round
Puerto Rico is a popular country to retire for US citizens, but it is also open to crypto investors from all over the world wishing to join this lively and hospitable community.
There you have it. This is a basic introduction to crypto tax free countries that, as we hope, has been helpful. However, tax is an issue that needs to be approached with care to avoid risks, especially if we are talking about relocation and becoming a tax resident. We at Offshore Pro Group suggest getting help from our legal advisors who will inform you about the latest events in the crypto tax or residence sphere.Send any questions regarding the registration of tax residence, as well as residence permit, permanent residence, citizenship, and passport abroad to our specialists at info@offshore-pro.info
