A growing number of cryptocurrency investors have recently sought to relocate to countries that have crypto-friendly tax policies, where cryptocurrencies are exempted from taxes. In this article, we will discuss the opportunity to get second citizenship for crypto investors.
Over the last decade, cryptocurrencies have proven to be a rewarding asset for investors, granting them large gains. But many countries imposed hefty taxes on investors trading for a profit, while few others have softened their stance against crypto to adapt to the changing global dynamics and take advantage of it. As a result, many crypto investors are looking to relocate to a tax haven by applying for a second citizenship or residency program, to enjoy their crypto profits down to the last penny.
Many countries like Malta, Portugal, St. Kitts & Nevis, Antigua & Barbuda, Grenada, Dominica, and Saint Lucia in the Caribbean, provide citizenship by investment programs, where an applicant can acquire citizenship and step forward towards establishing tax residency.
Benefits of second citizenship for crypto investors
Residing in a crypto tax haven
Some of the countries that provide citizenship or residency programs are deemed investor-friendly tax nations making it easier for crypto natives to start and operate their businesses. They offer progressive crypto tax law, where the cryptocurrency income is free from capital gains taxes, or special taxes such as VAT and corporate taxes that are found in heavily regulated nations, like the US.
Malta is one of the best crypto tax haven countries because investors are not subjected to any capital gains tax on all long-term profits generated from selling crypto. Crypto trading will be subjected to 0-35% of business income tax, based on the income status and tax bracket.
Adding validity to crypto assets
Several countries have banned anything related to crypto, so investors residing in such jurisdictions will face hefty penalties and legal prosecution. But second citizenship or residency will allow crypto investors to reside in crypto-friendly countries that have introduced a regulatory framework for blockchain and digital assets. Malta, for instance, is known as a “blockchain island”, as it provides numerous advantages to non-domicile foreign businesses that operate in the country. Income and capital gains generated outside Malta are not taxable if they arise outside Malta and are not remitted to the banking system. In Malta, the effective corporate income tax rate for non-domicile firms is only 5%. It is, however, much higher for companies registered in Malta.
Taking advantage of hot ICOs
Initial Coin Offering (ICO) is the cryptocurrency industry’s equivalent of an Initial Public Offering, which helps companies or investors raise money to create a new product related to cryptocurrencies such as a coin, application, or service. But some countries, such as China bans ICOs and imposes firm restrictions on them, considering them disruptive to economic and financial stability. The United States Securities and Exchange Commission (SEC) began to crack down on ICOs as well. Therefore, many startups are choosing to take their ICOs offshore.
Second citizenship or residency can help crypto investors coming from restricted countries benefit from hot ICOs and the vast returns they can offer. For instance, St. Kitts and Nevis is considered for many reasons one of the most favorable jurisdictions in which to launch an ICO, one of which is because it has laws against fraud.
Protecting crypto assets with plan B
Laws and regulations related to crypto are changing continuously, putting crypto investors with singular citizenship or residency at risk of having their assets scrutinized by their government. Therefore, second citizenship will provide crypto investors with an appropriate plan B to protect their assets from such obstacles they would face. A backup country with progressive crypto regulations will give investors peace of mind and guarantee the security and legitimacy of their crypto assets. The value of such freedom is now at the forefront of the minds of crypto investors who are dealing with rapid regulatory changes, as we have seen in Canada, China, and Russia during turbulent times.
Diversifying assets
Since cryptocurrency markets are notoriously volatile, diversifying the portfolio into more stable assets can help secure the investors’ wealth. However, this may be difficult in countries with strict regulations and tax laws. A cryptocurrency investor can diversify his portfolio by purchasing real estate in countries that grant citizenship and provide at the same time tax exemptions. The Caribbean countries, for instance, provide affordable real estate properties along with unique opportunities with minimal or no residency requirements.
Citizenship: Your gateway for a crypto haven
Along with the efforts these countries are putting in to be considered among the world’s most crypto-friendly countries, offering investors mobility, security, and asset protection, they are providing citizenship or residency programs to attract these investors. Apart from this, investors looking to obtain citizenship or residency can benefit also from many other features including visa-free travel to more than 140 countries, massive business opportunities, world-class medical and educational services, and a perfect place to retire.
For more information required about acquiring citizenship or residency from crypto-friendly countries, and how to apply for it, please visit the following links: Citizenship & Residency.
I hope this article helped you to understand why is it important to get a second citizenship for crypto investors.