Which European Countries Are Best for Cryptocurrency Startups?
As cryptocurrencies become more popular, countries are starting to introduce laws to regulate them.
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When it comes to cryptocurrency, there are a lot of differences from one country to another regarding regulations and legislation. Which ones are the most suitable in which to set up a cryptocurrency business?
One of the countries where many companies already decided to run their business is Estonia. There are a few reasons why you should take this country into consideration.
For starters, Estonia is one of the countries with the highest internet penetration rates in the world. There are Bitcoin ATMs, the first of which opened in Tallinn back in 2015. Moreover, the country’s government seems to be ready to take it to the next level, as it plans to create the so called “estcoin” — technically not a cryptocurrency, as it’s more of a token, but still a great step into the crypto world.
“We’re working to make e-residency the best option globally for entrepreneurslaunching a trusted ICO, while proceeding with three variants of our own ‘estcoin’ under consideration,” Kaspar Korjus, managing director of e-residency at Enterprise Estonia, wrote in a Medium blog post.
Speaking of e-residency, this program allows anyone in the world to apply for a digital ID card and gain access to Estonian e-services when planning to start a company in the East European country.
Estonia is on the path of becoming one of the best options when talking about safe ICOs, introducing the requirement of a cryptocurrency exchange license in order to be able to provide such services. The good news is that the local Estonian regulators have a friendly attitude and are willing to assist you.
Another good reason to start your business in Estonia is a favorable tax policy, as cryptocurrencies are not subject to value-added tax (VAT). There are no peculiarities about ICOs, thus no income tax is applied until an ICO’s proceeds become dividends. Also, compared to other countries where cryptocurrency business is encouraged, in Estonia the costs of starting a business are much lower.
Another country perfectly suitable for cryptocurrency businesses is Switzerland. The Alpine country aims to become the first “crypto nation,” as the Swiss Economics Minister declared at Crypto Finance Conference St. Moritz, in January 2018.
Switzerland is home to “Crypto Valley,” already famous for its business-friendly regulatory position and transparency. The conditions for starting a new blockchain crypto business seem ideal, thus the demand for ICOs will persist in 2018.
In Switzerland, cryptocurrency taxes differ for individual investors or professional traders, so make sure to seek legal advice regarding your business activities.
What you should know about EU taxation laws for cryptocurrency
While globally there are some countries that banned or placed many restrictions on cryptocurrency, EU taxation laws tend to be more permissive. In EU, there are a lot of tax-free crypto countries where there is no regulation at all regarding cryptocurrency. As for the countries that clarified the taxation laws, here are the one that don’t collect taxes on crypt businesses:
Denmark: Crypto transactions are seen as private in Denmark, thus are not taxed and the gains are tax exempted.
Germany: Transactions are tax exempted if the capital gains remain under €600. The capital gains from selling your cryptocurrencies after one year or more are also tax exempted — according to 23 EStGPrivate Sales Transactions rule of the Income Tax Act.
Belarus: Cryptocurrencies, ICOs and smart contracts were legalized in December 2017, when the country’s president, Alexander Lukashenko, signed the decree “On the Development of Digital Economy.” Cryptocurrency trading, capital gains, ICOs and crypto mining will be tax-free until Jan. 1, 2023.
Slovenia: According to 2013 rules of Slovenia’s Corporate Income Tax Act, capital gains are not taxed for individual investors when it comes to cryptocurrency, but are taxed for businesses or if individuals are receiving their incomes as cryptocurrency.
What does the future hold?
Whether tax-free or not, regulations are in need when it comes to cryptocurrency. Switzerland, for example, has a reputation of tax evasion. Also, crypto exchanges are a target for hackers.
If up until now only a narrow segment of the population was interested in cryptocurrency, things are about to change, thus more EU countries and those around the world will approach different regulations regarding cryptocurrency. Being up to date with cryptocurrency could make a huge difference in the way you develop your business.
As cryptocurrencies become more and more popular, they have the potential to fully change the way we think and act about money and transactions. Big corporations have already started to adopt this technology, including IBM, Cisco, Bosch, American Express, Barclays, BNY and Western Union.
“In 10 years everyone under 30 will make real transactions with crypto, because it’s a platform based on decentralized trust,” Jim Dowling, the CEO of Crypto Trust, told me in an email discussion.
Source: https://www.entrepreneur.com/article/309207
