Top 5 Countries to Live as a Crypto Trader

Crypto trading is one of the most lucrative careers in the crypto industry. Besides the chance to earn a lot relatively quickly, crypto trading has many additional benefits. Cryptocurrencies don’t rely on any centralized financial authority; therefore, traders can base their operations anywhere in the world.

Traders can choose from a list of service companies that operate as crypto exchange platforms. These platforms allow traders to buy and sell cryptocurrencies for a fee and at almost any time and place. The platforms are secure and allow the users to buy cryptos for both fiat money and other cryptocurrencies.

However, even though platforms are available worldwide, not all countries treat cryptocurrencies the same when it comes to taxes and overall ease of use. In this article, we’ll go over the top five countries in which to live as a crypto trader.

Malta

Malta has established itself as a hub for crypto-based businesses and entrepreneurs. It has done so by creating the legal framework needed to run and operate crypto businesses. It was one of the first countries to do so in a comprehensive way.

The Virtual Financial Assets (VFA) Act is the law that governs crypto transactions. Until the EU came up with its legal framework, it was the most comprehensive and complex crypto law. The country has an evident pro-crypto attitude, which is mostly noticeable in its taxation policy, set at 35 percent for crypto trade, with an option of reducing it through structuring.

Getting citizenship in Malta may be a bit more challenging if a trader doesn’t have family ties to the country. Even a business owner must reside in the country for at least four years before being able to enjoy full rights as a citizen.

Estonia

Estonia tried to establish itself as friendly toward crypto investors early on. Being the first in the region to do so had its advantages and provided a foothold in the EU markets for such businesses. Traders should be aware that Estonia doesn’t treat cryptocurrencies as financial services; therefore, they are not tied to regulations related to financial services. However, legislation has been put in place to change this in the upcoming years.

There are fees that a business needs to cover in order to obtain a license to provide a virtual finance service license. These fees can add up to 10.000 euros, depending on the business. It also takes about six months to go through the procedure and obtain the license.

Profits made from crypto trading are taxed as income, which means that the tax rate is a flat 20 percent. After living for eight years in Estonia with a residence permit and having permanent residency for at least the last five years, you can apply for citizenship by naturalization.

Portugal

Portugal has demonstrated that it’s crypt-friendly by creating a legal framework for crypto assets. It also features a tax code that’s suited to crypto businesses. Portugal has applied a 28 percent tax for short-term crypto gains (capital gains) from selling crypto assets that have been held for less than one year.

Cryptocurrencies aren’t legal tender in Portugal; they are treated as security. That’s the framework accepted in most Western countries. Portugal has also created the 2020 Digital Transitional Action Plan as a regulation made to set up free zones in the economy and cultivate growth and innovation.

At the same time, Portugal has implemented new crypto rules, primarily set up to prevent money laundering and counter-terrorism financing. Regulations such as these will soon be set up in every country regardless of how crypto-friendly they are.

Canada

Crypto exchanges in Canada are required to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). They need to comply with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. In this regard, the country is not that different from most other developed nations that allow crypto trading.

Gains made from crypto are taxable in Canada, just as any other gains that come from investing would have been. Residents of Canada are free to invest in foreign crypto projects, and cryptos can be used to make purchases. Many institutions are set up to accommodate businesses and provide them with up-to-date information on Canada’s regulations.

The regulations regarding crypto are also changing, and some investors and traders are a little bit concerned about the speed of change. Stability is key for investing in any industry, and crypto has recently undergone many changes.

Singapore

Singapore has long positioned itself as the most crypto-friendly nation in the world. The country doesn’t recognize cryptos as legal tender, but it can be used as an alternative payment method. Since 2023, Singapore has also introduced anti-money laundering regulations, as did many other countries.

Singapore has no capital gains tax for individuals not engaged in regular trading or business activity with crypto. However, Singapore applies an 8% goods and services tax to fees when you purchase, sell, or convert crypto, for instance, on a centralized exchange.

Entrepreneurs who move to Singapore to open a business also get a lot of tax benefits, depending on the size of the business and the size of the investment they make. However, crypto miners are taxed on the income they make from mining.

To Sum Up

 Crypto traders can do their job regardless of where they are based. However, not all countries are equally crypto friendly. They differ when it comes to how cryptos are taxed and how open the country is to crypto businesses.

The five countries on our list are among the most tax-friendly, and they offer ways for investors to gain citizenship and get tax benefits.