Law-tax jurisdictions for cryptocurrencies

A low-tax zone is a specific jurisdiction that offers loyal conditions for registering your own business with moderate taxation rates. The cryptocurrency market in most countries of the world is not fully regulated. Some states issue special licenses for trading, some prohibit the withdrawal and exchange of such money, and most still leave this issue in the “gray zone”. Despite this, the cryptocurrency market is developing every day, there are many companies ready to accept payment in bitcoins or USDT.

A low-tax zone is a specific jurisdiction that offers loyal conditions for registering your own business with moderate taxation rates. The cryptocurrency market in most countries of the world is not fully regulated. Some states issue special licenses for trading, some prohibit the withdrawal and exchange of such money, and most still leave this issue in the “gray zone”. Despite this, the cryptocurrency market is developing every day, there are many companies ready to accept payment in bitcoins or USDT.

Therefore, a low-tax jurisdiction, which offers loyal conditions for the registration of such firms, allows you to optimize taxation costs and legalize business activities at the international level. The main advantages of opening a firm in a state that supports modern financial instruments:

• complete confidentiality of data, in which it is impossible to find out the identity of the owner of cryptocurrency without his consent;
• safe storage of capital and protection from devaluation risks;
• tax optimization, as in a number of countries the sale of goods and services for cryptocurrency is not subject to VAT;
• free trade and investment activities on the international market.

Classification of low-tax zones

When choosing a state to register a company when working with cryptocurrency, it is necessary to take into account the peculiarities of local legislation, taxation rates, as well as the current regulation of existing financial instruments for business. Depending on the existing rules regarding non-fiat money, it is possible to distinguish jurisdictions that:

• equate cryptocurrency with conventional currencies and allow its use for settlement and acceptance of payments;
• are characterized by high tax rates, but loyal to non-fiat funds and do not consider them an object of taxation;
• tax cryptocurrency, but offer to reduce the financial burden through territorial distribution;
• issue separate licenses for the use of cryptocurrency in business activities and apply separate taxation rules.

The last group includes states with constantly updated and relevant legislation that offers transparent conditions for business development. This category of jurisdictions is mainly represented in the countries of the European Union.

The rest of the states are still on the way to regulate operations with cryptocurrencies, as well as the creation of taxation programs. Therefore, timely registration of a company in a convenient foreign jurisdiction will help prevent possible difficulties with the turnover of non-fiat money.

Popular jurisdictions for cryptocurrency activities

Among European countries, the most favorable conditions for working with cryptocurrencies offer:

• Switzerland, which has created a separate Crypto Valley zone for blockchain businesses;
• Estonia, which issues a separate cryptocurrency;
• Cyprus, which became one of the first low-tax jurisdictions for blockchain.

Denmark, Finland, Belgium, France and Croatia also offer loyal conditions for companies working with this type of currency. Outside Europe, Thailand, Israel and Hong Kong are popular. The Japanese government issues separate permits to work with non-fiat funds, as well as special bitcoin licenses. In Australia, bitcoin has been excluded from taxable currencies altogether to encourage foreign investment in the state.

The U.S. legislative environment recognizes cryptocurrency savings as property assets and securities. The United States issues separate licenses for trading in non-fiat money. This financial instrument is still in the process of regulation, so founders of companies that have planned to go international should consider the latest amendments to the current legislation. The support of Altindustry lawyers guarantees a competent approach to the selection of the optimal legal action for the business. Our specialists will:

• develop a low-tax planning strategy;
• select the optimal jurisdiction with favorable conditions for blockchain business;
• provide consultations on the current requirements of the countries to the founders of companies;
• familiarize with the current licensing conditions for cryptocurrency activities;
• ensure preparation of documents and organization of visits to the authorized state bodies;
• accompany the client in submitting a request to the financial authorities of the chosen jurisdiction.

<blockquoteAltindustry guarantees professional business support and effective development on the international market. Our lawyers will ensure a legal field of activity with minimization of financial risks and optimization of taxation costs.