The crypto-currency for the red-tape governmental facilities is still the novelty, so since ten years of their existence, the legislators start thinking of the clear legal norms. In the meantime, the countries progress  differently. As a result, one of the most important factors of business success using the digital money is the right choice of the country where the company will be registered.

This statement is relevant in terms that radically opposite rules of law that sometimes exist in neighboring jurisdictions and this will considerably affect doing any business. On the top of it, most countries have not formulated their position and thus, they refer to the so-called “gray zone”.

The example of the global case is the situation in China, Russia and Japan.

In the former case, the country render individuals the opportunity to use the cryptocurrency, as well as to small businesses. At the same time, bigger businesses mainly presented by specialized exchange houses today face outrages, as they are suspected of various frauds.

The Chinese authorities look disapprovingly at miners who spend the cheap power in huge volymes allotted for enterprises. Taxation in China is mandatory for all cryptocurrency market players.

In Japan, the legal framework is one of the most loyal in the world. So, individuals are eligible to transact with digital currencies. There are no restrictions for business, either, but the special permit will be required to be issued for long 2 months. In addition, it will be issued only to the current resident organization. All transactions are taxed.

In both cases above, the law of the countries are the best practices and regulate the cryptocurrency turnover;  there is no legal framework in Russia in this regard. In addition, the governments have reviewed their opinion about the digital currency from the negative to neutral and they have realized that the cryptocurrency is at the Russian market. this is to say that our country is a part of the “gray zone” where there are no prohibitions, but there is no licensing fraework. The only material advantage is zero tax. Whereas the tax is the most important issue along with legalization.

To understand the matter: taxation applies in all countries that allowed cryptocurrency use and the tax amount may be considerable (up to 37%).

Offshore for cryptocurrency

In view of the existing situation in the field of cryptocurrency, there are no traditional offshore zones as in the case with conventional currencies, other global assets. Countries known for:

  • the most loyal legislation;
  • the least taxation fee act as offshore

At the same time, it should be noted that alternatives should be sought, since the best effective combination of both is unlikely to be found. For example, Germany was among the first to accept the cryptocurrency; it has recently updated its legislation regulating this industry. Yet, it is very good except for one important thing being the huge amount of income tax levied on the digital currency users.

The same is seen in Britain and Switzerland, where the cryptocurrency is equated to the foreign currency and enjoys the same rights as the dollar, ruble, and others. However, taxation issue is not simple like in Germany.

Instead, Bulgaria is the best place in terms of the size of contributions to the budget, where the bitcoin along with a range of other digital coins have long been legalized and may be used for business. The most important thing is that the taxes will not exceed 10% of income, while in the countries of the “old” Europe they may be greater than 3.5 times.

Cryptocurrency in Estonia

Estonia is quite the profitable place to do business in; its government is loyal to to cryptocurrencies, and it also provides considerable assistance to promote them. All these result in quite comfortable conditions created, so that the tax amount is moderate, and governmental authorities create the formative attitude.

Nevertheless, if taxes remain unbearable, one of loyal countries of the “gray zone” may be chosen. For example, they include France, Ukraine, Belgium, Poland. These places allow any operations with cryptocurrencies and government authorities will not prevent this and at the same time the legal framework is still being developed. As a result, taxes are not yet allowed to be paid. Everything may change, so if the business is hard to transfer to another jurisdiction, the better options are sought.

The correct decision in each case can be made supported by experts of our company, who will help to choose the best options of jurisdiction as they collet data of the person and the company. You can contact the experts of the Private Financial Services for help with solutions suitable for you!