Article written by: Sudhir Khatwani
Article title: (World’s Most Crypto Business Friendly Countries in 2024)
Source: Social Capital Markets
The article is translated and published with the author's authorization
Cryptocurrency, with its disruptive power, has changed the landscape of investment and digital assets, injecting new impetus into economic development in many regions around the world. Many countries have seen the huge potential behind this trend and have adjusted their regulatory strategies and introduced relevant laws to attract crypto companies and innovative startups to settle in. As of 2024, the global landscape of countries that are open to crypto businesses is changing rapidly, and some of these countries are particularly eye-catching for their active efforts to promote the development of the crypto industry.
In this report, the Social Capital Markets team comprehensively considered five key indicators and scored many countries around the world. These indicators include: regulatory transparency, capital gains tax rate, corporate income tax rate, the number of registered crypto companies, and the number of companies that accept cryptocurrency payments. Each indicator has a full score of 20 points, with a total score of 100 points.
Data analysis results show that countries such as Switzerland and Singapore have always been recognized as encryption-friendly countries, while countries such as Estonia, Malta and the United Arab Emirates have also made significant progress in this field. Through in-depth analysis of each country’s regulatory policies, tax systems and business environment, we have selected the top ten countries that are expected to lead the future development of crypto businesses.
Top 10 Crypto-Friendly Countries
Dubai 79 points
G20 countries: Yes
Regulatory framework: Dubai Multi Commodities Centre (DMCC), Dubai Financial Services Authority (DFSA)
Legal clarity: clear and supportive
Capital gains tax: No
Corporate tax: 9% corporate tax is levied on taxable income exceeding AED 375,000
Registered crypto companies: More than 550
In recent years, Dubai has gradually become a pioneer city in the field of cryptocurrency with its open attitude. The Dubai Multi Commodities Center (DMCC) has even set up a special crypto center and provided a supportive launch platform for crypto and blockchain technology companies. As a member of the G20, Dubai has regulatory agencies such as VARA (Virtual Asset Regulatory Authority) and DFSA (Dubai Financial Services Authority), which provide a standardized regulatory environment for cryptocurrency businesses.
Companies doing crypto business in Dubai need to register with DFSA and DMCC. The Dubai government does not impose capital gains tax on the income of crypto companies, which is very attractive to crypto companies. In addition, Dubai only imposes a 9% corporate tax on corporate income exceeding 375,000 dirhams, which is a relatively low tax rate. Currently, there are more than 550 registered crypto companies in Dubai.
Switzerland 74.5 points
G20 countries: No
Regulatory framework: Swiss Financial Market Supervisory Authority (FINMA)
Legal clarity: clear and supportive, especially in canton Zug
Capital gains tax: 7.8%
Corporate tax: 12%-21%
Registered crypto companies: Over 900
Switzerland has made remarkable progress in the cryptocurrency sector, with the city of Zug becoming a globally recognized cryptocurrency hub. In 2018, Swiss Economy Minister Johann Schneider-Ammann proposed the ambitious goal of making Switzerland a “crypto nation.”
The Swiss Financial Market Supervisory Authority (FINMA) provides clear and supportive regulations, especially in the crypto-friendly canton of Zug. Companies doing crypto business in Switzerland need to register with FINMA. Thanks to the legal clarity, Switzerland has become the preferred location for more than 900 registered crypto companies.
Switzerland has set reasonable tax rates for crypto service providers, with capital gains tax at 7.8% and corporate tax rates between 12% and 21%. In addition, more than 400 companies in Switzerland accept cryptocurrencies as a payment method, showing its open attitude towards cryptocurrencies.
South Korea 73.5 points
G20 countries: Yes
Regulatory framework: Korea Financial Intelligence Unit (KFIU), under the Financial Services Commission (FSC)
Legal clarity: gradually improving
Capital gains tax: Suspension (0%)
Corporate tax: implementation postponed until 2025
Registered crypto companies: over 376
As a G20 member, South Korea is gradually emerging as a hot spot for crypto business. Here, digital asset transactions and services are regulated by the Korea Financial Intelligence Unit (KFIU), which is an important part of the Financial Services Commission (FSC). Although South Korea's cryptocurrency regulations are still being refined, South Korea's commitment to creating a crypto-friendly business environment is obvious.
In South Korea, companies operating crypto services must register with the FSC and strictly abide by its laws. Although the regulatory framework is still evolving, South Korea has shown its support for cryptocurrency businesses. Currently, South Korea has implemented a moratorium on capital gains tax, and the implementation of corporate tax has been postponed until after 2025. These tax incentives, coupled with more than 376 registered crypto companies, have given South Korea a strong position in Asia's crypto industry, steadily developing into a crypto powerhouse in the region.
Singapore 72 points
G20 countries: No
Regulatory framework: Monetary Authority of Singapore (MAS)
Legal clarity: clear and supportive
Capital Gains Tax: No capital gains tax
Corporate tax: 17%
Registered crypto companies: More than 100
As a major business hub in Asia, Singapore has shown a very friendly attitude towards cryptocurrency companies. In Singapore, companies need to obtain a license from the Monetary Authority of Singapore (MAS) to conduct crypto business. Singapore provides a forward-looking and flexible regulatory framework for industry participants through the Payment Services Act (PSA), ensuring proper due diligence, solicitation and risk disclosure.
Singapore does not tax capital gains, which is a significant advantage for investors and businesses. The corporate income tax is unified at 17%, providing a stable tax environment for the development of crypto companies. Currently, Singapore has more than 100 registered encryption companies and dominates the encryption business field in Southeast Asia.
The Singapore government has also allocated huge funds for the research and development of blockchain technology, showing its positive support for cryptocurrency and blockchain technology. In addition, Singapore's tax policy on cryptocurrency is relatively clear, providing clear guidance for enterprises, which further enhances Singapore's attractiveness as a crypto business center.
USA 71 points
G20 countries: Yes
Regulatory framework: Securities and Exchange Commission (SEC), Financial Crimes Enforcement Network (FinCEN)
Legal clarity: Varies by state, complex
Capital gains tax: Varies by state (most states don’t charge)
Corporate tax: 21%
Registered crypto companies: over 474
As one of the G20 countries, the United States has a high degree of acceptance of cryptocurrencies, with more than 5,000 companies accepting cryptocurrencies as a payment method, showing the widespread application and important position of cryptocurrencies in the United States. However, due to different laws in various states, the regulatory environment in the United States is relatively complex.
Despite the complex legal environment, the United States is still quite active in the cryptocurrency field, and many states have introduced supportive laws and programs. For example, Colorado has a sandbox program for blockchain companies to test new products and services.
In terms of tax policy, the United States is relatively lenient towards crypto companies. Currently, most states do not impose capital gains tax on cryptocurrencies, and the corporate income tax rate is 21%. Although the license fees may be high, the United States' huge market and innovative spirit allow it to continue to be a major player in the crypto industry. Currently, there are more than 474 registered crypto companies operating in the United States, further consolidating its leadership in the industry.
Estonia 69.5 points
G20 countries: No
Regulatory framework: Financial Supervisory Authority (EFSA)
Legal clarity: clear and supportive
Capital gains tax: 20%
Corporate tax: 20%
Registered crypto companies: Over 1,200
In Estonia, strict (Anti-Money Laundering (AML) and Counter-Terrorist Financing Prevention Laws) implemented between 2021 and 2022 have reshaped the landscape of its crypto service provider market. These new laws have prompted many companies to review their operating strategies, causing some companies to give up applying for licenses. The Financial Intelligence Unit (FIU) revoked the licenses of nearly 482 crypto companies in 2022, reflecting Estonia's firm commitment to financial transparency.
Despite the strict regulatory environment, Estonia continues to attract industry pioneers with its favorable tax policies for crypto companies. Currently, about 100 crypto companies have obtained the precious license to operate in Estonia. Estonia does not impose capital gains tax and implements a 20% withholding tax policy on income tax, providing a relatively relaxed tax environment for crypto companies. These measures, coupled with its clear legal support, have enabled Estonia to occupy a place in the global crypto business field.
Italy 68 points
G20 countries: Yes
Regulatory framework: Ministry of Economy and Finance (MEF), Italian Securities and Exchange Commission (CONSOB)
Legal clarity: clear but still developing
Capital gains tax: 26%
Corporate tax: 24%
Registered crypto companies: more than 73
Italy's attitude towards the cryptocurrency industry has gradually shifted from welcoming to strengthening regulation. Despite this, Italy remains one of the hot spots for crypto business. The introduction of the EU's (Market Regulation Framework for Crypto Assets) (MiCA) has had an impact on the way crypto service providers are regulated in Italy. Currently, there are more than 73 approved crypto service providers actively operating in the market in Italy.
Italy's tax system is relatively unique, with strict tax laws. For capital gains tax, Italy has a flat tax rate of 26%, while corporate income tax is 24%. These tax rates are relatively high compared to other countries such as Australia or Japan, but they are still competitive. As Italy continues to develop its regulatory framework and tax policies, the country is expected to become an important center for crypto businesses.
Russia 67 points
G20 countries: Yes
Regulatory framework: Central Bank of Russia (CBR)
Legal clarity: clear but restrictive
Capital Gains Tax: No capital gains tax
Corporate tax: 20%
Registered crypto companies: More than 70
As one of the world's superpowers, Russia has attracted many crypto companies through its favorable tax policies. Russia does not impose capital gains tax and corporate income tax is 20%, which provides a relatively relaxed tax environment for companies. The country recognizes cryptocurrencies as legal currencies, and more than 500 companies in different industries accept cryptocurrencies as a payment method, which not only speeds up the transaction process, but also ensures the security of payment data and simplifies the operations of crypto companies in the Russian market.
Germany 66.5 points
G20 countries: Yes
Regulatory framework: German Federal Financial Supervisory Authority (BaFin)
Legal clarity: clear and supportive for licensed businesses
Capital gains tax: 25%
Corporate tax: 15%-30%
Registered crypto companies: Over 300
Germany is one of the first countries in the world to recognize the potential of blockchain technology and apply it to digital transformation. The German Savings Bank Association, a network of 400 savings banks, has even developed a fintech blockchain application to facilitate cryptocurrency transactions. Germany has an open attitude towards cryptocurrencies and extends this support to the entire crypto business sector. In terms of taxation, Germany exempts capital gains tax on long-term cryptocurrency income, while short-term capital gains tax floats between 0% and 45% depending on the income. The corporate income tax rate is 15%.
Although Germany's tax rate is slightly higher than some countries, its transparent and mature crypto regulations provide an ideal environment for the development of crypto companies. Germany recognizes the legal status of cryptocurrencies, and more than 700 companies accept cryptocurrencies as a payment method, which greatly improves the convenience of business operations.
Brazil 66.5 points
G20 countries: Yes
Regulatory framework: Central Bank of Brazil
Legal clarity: gradually improving
Capital Gains Tax: 15.0% – 22.5%
Corporate tax: 0% – 27.5%
Registered crypto companies: more than 19
Brazil's development in the cryptocurrency field is still ongoing, and the regulatory framework is gradually being clarified. In 2022, Brazil developed a framework for the crypto industry and designated the Central Bank of Brazil as the regulatory agency. However, relevant laws and regulations have not yet been fully established, which provides a relatively relaxed environment for enterprises.
Although Brazil's tax rates may make it relatively unattractive for crypto businesses, with corporate income taxes in the country as high as 27.5% and short-term capital gains taxes floating between 15% and 22.5%, Brazil's friendliness toward cryptocurrencies is gradually increasing. Brazilian residents will not be able to use cryptocurrencies such as Bitcoin as the country's legal tender, but the newly passed law includes many digital currencies under the definition of legal payment methods in Brazil and establishes a licensing system for virtual asset service providers.
Summarize
The rise of cryptocurrencies has opened a new chapter in the global investment sector, and the lucrative profits it brings have attracted attention from all over the world. In order to seize this wave of digital investment, many countries are actively formulating laws and regulations to support and regulate the development of crypto businesses while ensuring that the interests of citizens are protected. In this global cryptocurrency competition, G20 countries are leading the formulation of regulatory policies with their one-step-ahead attitude, while non-G20 members are also catching up at a rapid pace, injecting fierce competition into the cryptocurrency field. These countries have not only promoted the legalization of cryptocurrencies by providing clear legal support, favorable tax policies and an open business environment, but also provided a solid foundation for the prosperity and development of crypto businesses.
