Legally Minimize Taxes On Crypto Capital Gains, Staking, Yield Income 2022

Also, don’t forget that factors such as quality of life and amenities are important, so be sure to check out the factors to consider section near the end before you up and yolo into moving to another country.

Disclaimer here that nothing in this article is tax, financial, or life advice by any means. Be sure to perform deeper DYOR on any considerations as these laws and regulations may be outdated and have changed by the time you read this article.  Please consult an international tax professional for specific tax info.

In no particular order, here are the top crypto tax-friendly jurisdictions.

Portugal

Portugal is great for international citizens and an obvious choice for EU citizens residing in high tax countries within the European Union. Members in the EU can quite easily hop on over with little to worry about with regards to immigration hurdles. However, the process is a bit more cumbersome for those outside the EU.

International citizens can get their residency here by getting what is known as a “Golden Visa,” the TL;DR on that is basically that you can get residency by:

• Investing 500k into real estate- As of 2022, there are location restrictions to where residential real estate can be purchased to qualify. To encourage population dispersion outside of major hubs, these locations are limited to interior areas of the country as well as Madeira and Azores islands. There are no location restrictions on commercial or touristic properties.
• 350k acquisition of real estate located in an urban rehabilitation area. (Basically buying a home that needs fixing in a non-urbanized area)
• Investing 500k into preserving cultural heritage or artistic production.
• Investing 500k  into science and research. 
• 500k capital transfer for the incorporation or reinforcement of a commercial company.
• 500k acquisition of shares in investment funds or venture capital funds for the capitalization of Portuguese companies.
• Capital Transfer of at least 1.5 million Euros
• Start a business that generates 10 new full-time jobs for Portuguese citizens or 8 full-time jobs if the company is formed in a low-density population area. Alternatively, 500k can be invested into an already established business that creates 5 new full-time jobs for at least 3 years.

This golden visa also has a unique benefit. Residents only need to spend 7 days a year in Portugal to retain their residency status, so this is one of the few options you wouldn’t necessarily need to relocate to enjoy the tax perks.

If those price tags are a bit steep, there is also a popular freelancer visa that is ideal for digital nomads, though that may not help you obtain long-term residency. 

Cryptocurrency is tax-free in Portugal regarding capital gains and profits from interest income via staking, yield farming etc. Crypto day trading gains appear to be tax-free based on several taxation sites. However, if your primary income is derived from frequent trading, then you do need to pay tax. So that is something to look into further if that applies to you.

Portugal is consistently ranked among the safest countries globally with low crime rates. It has fantastic free health care that ranks higher in quality than the health care system in the UK. This means that violent crimes here are unlikely to happen. Should you need to visit a hospital, it will likely be from doing something you probably shouldn’t, and the injury is likely self-inflicted. Luckily, in that case, you can get some of the highest quality healthcare in the world.

Portugal also has something for everyone. Lisbon and Porto provide all the nightlife and metropolitan lifestyle one could want. If you want to party hard and spend those crypto gains you can’t go wrong with the party capital Albufeira which has become a very popular tourist destination, competing with the likes of Ibiza for a party lifestyle. If you travel inland, Portugal has some beautiful landscapes, lush forests, and many medieval villages that are UNESCO world heritage sites.

The weather in Portugal is also fantastic and there are climates to suit everyone. The northern parts and the city of Porto can be quite cool in the summer and cold in the winter for those who are not a fan of the heat. The south enjoys hot summer months and mild winter months. Portugal also owns the beautiful tropical island of Madeira and the stunning Azores islands.

The cost of living in Portugal is also relatively low compared to many places in Europe and is especially low outside the capital city of Lisbon.

In the city, a comfortable monthly income of around $2,000 would afford you a nice lifestyle while outside the city it can be much lower. There are towns just outside of Lisbon where a glass of wine costs $0.50, beer for $1 and entire meals are around $5, quite affordable indeed!

Puerto Rico

Puerto Rico is a really popular tax-friendly destination for Americans as it is one of the easier places for them to move to escape taxation. The IRS comes knocking for their tax cut regardless of where Americans are located in the world. The United States is one of the few countries that tax both residents and citizens. This is in contrast to countries like the UK or Canada where you can be a Canadian or UK citizen, but a tax resident of another country and the taxman won’t chase you down as you can renounce your home tax residency status while remaining a citizen.

In Puerto Rico, Americans can enjoy paying 0% capital gains tax if they obtain their Puerto Rican residency. Though this has caused wealthy Americans to flock to the island in droves which has raised the cost of living substantially. The reason for this is that in order to get residency, individuals must purchase a property in Puerto Rico within 2 years of relocating there so property has become a seriously hot commodity and is in high demand.

So, unless you are a serious crypto whale with bank accounts bursting at the seams, you might find it difficult to be able to find affordable housing there. Aside from housing, the cost of living is quite affordable with a single-person income of around $1,700 being enough to live comfortably.

Although, it looks like the US government may attempt to start cracking down on US citizens who are using Puerto Rico as a tax shelter.

The capital city of San Juan is home to around half a million people and the island nation is known for some of the most beautiful beaches and nature in the world. There is something here for everyone as long as you are happy with average internet speeds.

The crime rates in Puerto Rico are also quite low, much lower than the crime rates in many major US cities making it an even more attractive place to relocate.

United Arab Emirates- Dubai

Dubai is probably the most popular mention on the list as being a resident of the United Arab Emirates is about the closest anyone can become to being able to live tax-free without breaking laws. Residents are not obligated to pay taxes on crypto, property, income, or capital gains.

The city of Dubai is a paradise for people looking for an insanely high quality of life and a metropolitan lifestyle. There is no shortage of high-end restaurants, ethnic foods, Lambos for sale, or nightlife. It may just be the “party-est” city on the planet. It certainly is the home of luxury sports cars, apartments and yachts.

Ranking among some of the top safest cities in the world, crypto millionaires can feel pretty safe here as they drop their gains on expensive bottles of Dom Perignon and enjoy a lush lifestyle.

You would think that a land full of millionaires and luxury everything would come with an insanely high cost of living, but Dubai is actually quite affordable with an estimated monthly living cost for a single person coming in at just under $2,500 per month. This cost will of course scale up significantly depending on how “bling-bling” you want to live.

The most affordable way to get your visa there is by setting up a company and employing yourself as a crypto trader. Internet speeds in Dubai are among the best in the world, and the weather is fantastic, albeit a bit dry. It is in the desert, after all. The summer temperatures can rise to above 40 degrees Celsius, so you will want air conditioning.

Switzerland

Ah, Switzerland’s classic tax-friendly and financial powerhouse country with the iconic “Swiss bank account” often mentioned by villains in Bond movies. For decades, Switzerland has been a global tax haven, and crypto was not excluded. Crypto traded or held as an investment is not subject to capital gains tax.

Though getting Swiss residency is not easy. To get residency, you need to be:

• Under 55 years of age
• No criminal record
• Pass a stringent interview
• Invest a minimum of CHF 1,000,000

Switzerland is known for its extremely high quality of living, being one of the safest places in the world. It boasts a world-class financial system, has a fantastic education and healthcare system, enjoys political stability and is a member of the Schengen Zone, making it perfect for Europeans.

The weather here is perfect for anyone who enjoys the winter months and activities like skiing as Switzerland is known for some of the best ski hills in the world. So pack a parka and get the hot chocolate brewing if you plan on relocating here.

While Switzerland basically has the highest quality of just about everything, the cost of living in Switzerland is also one of the highest in Europe. After you invest your 1 million CHF to get residency, you will need enough left over to cover monthly living expenses of around 3,366 CHF. Switzerland is ranked as the third most expensive country globally for living costs.

On the list of the top ten most expensive cities in Europe, 3 are located in Switzerland, certainly not the ideal play for those who enjoy a cheap and cheerful lifestyle.

Singapore

Singapore is a popular choice as it is a fascinating and modern city. Known for its iconic city centre gardens that feature a light-up music display and a hotel that looks like a cruise ship in the sky, Singapore is a very clean, safe and fantastic place to live.

Singapore residents enjoy zero capital gains tax on anything, and Singapore is known as an “investment haven.” Crypto day traders are free to trade here as long as it is not being conducted as part of business activity. If crypto trading is done as a business, it will be taxed as business income. Although there is a catch, and that is that Singaporean residency is difficult to obtain.

The best way to get residency there is by participating in the Global Investor Programme. This program allows investors to obtain residency in two ways:

• Invest at least $2.5 million in a new business or start-up expansion of an existing business or,
• Invest at least $2.5 million in a GIP approved fund that invests in Singapore-based companies.

Singapore consistently ranks as one of the safest places to live globally and has a high quality of living. As you would expect, internet speeds are lightning fast, there are fantastic restaurants and the best of pretty much whatever it is you are looking for.

The cost of living in Singapore is relatively high compared to other mentions on the list.

The weather in Singapore remains quite warm year-round but is pretty humid, so you will want to live in an air-conditioned space for sure.

Bermuda

Let’s turn back to the beautiful beaches of the world. Bermuda has no personal income tax, and there are no taxes on buying, selling or holding crypto. The use of crypto as a form of payment is also deemed perfectly legal here, making Bermuda the first country whose government were happy to accept tax payments in any recognized cryptocurrency! Very cool and forward-thinking of them.

Bermuda is one of the easier countries to get a one-year visa in as well, so if you are good at timing crypto markets, you may want to try and make sure the crypto top will be coming in over the next 12 months before you make the move.

It is possible to gain longer-term residency in Bermuda, though it is trickier. You can gain residency by participating in the Bermuda Residency by Investment Program. To get this, you  need to meet these requirements:

• Make an investment of $2.5 million dollars.
• Investments can be made in real estate, government bonds, government funds, charitable donations, investing in existing businesses or starting a new company.

Bermuda rates highly in terms of safety, has good internet speed, the perfect weather. As long as you aren’t afraid of disappearing in the Bermuda triangle, this is an absolutely beautiful place to settle down and experience a fantastic quality of life with world-class beaches.

That is as long as you’re happy with a slow and relaxing pace as the island is only home to around 65,000 people with an older population and little to do in terms of nightlife.

Belarus

Belarus is another option in Europe and has welcomed crypto holders with open arms since 2018. The government legalized crypto activities and chose to impose no crypto tax for crypto-related activities, including crypto mining. Belarusian President Alexander Lukashenko has even taken crypto legislation a step further in signing a decree for “digital economy development,” turning Belarus into one of the most forward-thinking hubs for blockchain development.

This law was passed to provide a powerful boost to the digital economy and support digital innovation around blockchain technology. Interestingly, Belarus ranks among the top 15 countries globally for active cryptocurrency trading as the residents there know that the government fully supports the new industry and crypto users from less-friendly crypto jurisdictions have been relocating there.

Belarus is home to some incredible World Heritage Sites, and the capital city of Minsk has plenty of attractions to appease the residents. 

To relocate there, citizens from the following jurisdictions can enter Belarus for 30-90 days without a visa:

• Armenia
• Cuba
• Russia
• Serbia
• Ukraine
• Uzbekistan
• Venezuela

Residents from other countries will need to apply for a visa.

The climate here is nothing exciting, pretty standard warm summers and colder than average winters. The Eastern European climate generally experiences plenty of rainfall and snow in the winter, and internet speeds here are simply stated as average.

Slovenia

The government of Slovenia also views crypto taxation favorably as they have passed tax legislation that allows for special tax laws for crypto investors. For example, there is no capital gains tax imposed on the selling of crypto for individuals, but crypto mining will be taxed as business income. Interestingly, businesses in Slovenia are not allowed to accept payments for goods and services exclusively in crypto.

Slovenia is a major Central European hub of activity with diverse geography, climate and culture. The country has a small population of around 2 million people. The climate varies greatly depending on the region, mainly experiencing cool winters and warm summers.

Slovenia enjoys good internet speeds, a high standard of living and is ranked quite high on the world safety index. There are quite a few options for anyone looking to relocate to this picturesque country. Some of those options are:

• Business Immigration Program
• Gaining employment via an employment contract
• Family reunification
• Through education in a public or private educational institution

More information on relocating to Slovenia can be found here.

Germany

German residents can take advantage of zero per cent tax on capital gains for anyone who sells crypto as long as it was held for longer than 365 days. This makes Germany a fantastic place for long term holders who can enjoy no capital gains tax with a side of beer and sausage wurst.

As with other EU countries, European Union members enjoy free travel between nations so getting German residency is a breeze. If you live outside of the EU, the process is a bit tricker. To relocate to Germany, there needs to be a reason. According to the German visa website, those reasons can be:

• Immigration for employment,
• Immigration for education,
• Immigration for entrepreneurs,
• Immigration for family reunions,
• Immigration residence permits.

There are many ways to obtain these, but before being accepted in the country, individuals need to prove that they are financially stable, have health insurance and have basic German language proficiency. Visas are available for those who want to start a business in Germany, study, work, perform scientific research, perform an internship, and for a family reunion.

You should definitely check the visa immigration site above as it lays out what is required for each of these avenues. There are standards like funds needed for business activities and employment contracts that must be met before a visa can be approved.

Germany has one of the highest standards of living globally and is consistently ranked highly in terms of safety and quality of life. It consistently ranks among the top countries for nearly every metric. According to the Human Development Index, Germany is the 4th highest ranked country globally.

The weather varies significantly in Germany from the north to the south of the country. As it is located in Central Europe, one can expect cold, snowy winters in the north, rainy winters and warm summers in the south. Germany is a very modern nation, among the most advanced globally, so no worries about slow internet speed here.

Costa Rica

Costa Rica has become a popular global tax haven and is enjoyed as one of the most beautiful places on the planet in terms of natural beauty. Waterfalls, jungles, exhilarating beaches, no capital gains tax, what’s not to love? Costa Rican residents are subject to zero capital gains tax in the nation unless income is derived from habitual transactions such as property. Capital gains derived from regular transactions are taxed at a flat rate of 30%.

Costa Rica rates near Italy in terms of safety and ranks higher than Spain and the United Kingdom, so you don’t need to worry too much about a five-dollar wrench attack here. Though it is located in Central America, and Costa Rica’s neighboring countries are often making news headlines for pretty heinous criminal activity, so you may want to research local safety before putting roots down.

The capital of Costa Rica is San Jose, which is home to over a million people, so city slickers can get their fill of a pretty decent sized metropolis. Costa Rica really does have it all going for it in terms of tropical nature, modern living, nightlife and activities, which is why it has become one of the main areas in Central America for both tourism and migration.

As if Costa Rico doesn’t have enough to flex about in terms of a great standard of living and quality of life, it is also very affordable. A single person can live quite comfortably off about $1,500 per month, making it perfect for digital nomads and crypto traders. Oh, and it also has quite good internet speeds.

Vanuatu

If a beautiful tropical paradise takes your fancy, few places on the planet are more stunning than Vanuatu. Vanuatu is one of the islands that make up an archipelago of 83 islands off the coast of Australia, just above New Zealand.

Vanuatu has become a popular destination for investors as there are zero capital gains taxed on profits, dividends or income for traditional and crypto investments for individuals or corporations. So investors can sit easy chilling in their hammocks while sipping piña coladas, knowing they don’t need to stress about taxes here.

Fun Fact- Vanuatu is so crypto-friendly that you can actually pay in Bitcoin for your citizenship! Talk about forward-thinking. The two main ways to get residency in Vanuatu are:

Banking- This option requires that a Vanuatu bank needs to certify your ability to deposit 250,000 Vanuatu Vatu ($ 2,250) per month into an account to ensure you have an income.

Investment- An investor can obtain residency by investing $10 million Vanuatu (approximately $90k) in some form of real estate or agricultural project.

The Vanuatu passport is valid for five years, in which citizens will be able to renew it.

Vanuatu may not be for everyone, though. If you are happy kicking around coconuts all day on a remote tropical island, then sure, go for it. The population of the largest city on the island is home to only fifty-thousand people, so if you are excited by city life and the hustle and bustle, you may want to consider skipping this one.

The cost of living in Vanuatu is also quite high compared to mainland European cities and comes without the amenities or convenience of location. Vanuatu comes in at being 5% more expensive than the Belgium capital Brussels for monthly living costs. The standard of living is quite high in Vanuatu, with low crime rates, which makes sense as it is difficult to get away with being a dirtbag on an island so small that everyone knows each other.

People who want to settle in Vanuatu should be content with a pretty simple life. Unfortunately, there are few paved roads, so probably not the best place to buy Lambos and internet speeds are often criticized for being slow.

Malaysia

If exotic locations and experiencing different cultures are your thing, then look no further than Malaysia. Malaysia has no long-term capital gains tax on crypto, and there is no tax on crypto trading unless your crypto trading is done as part of a business. If crypto trading is done as a business, then income will fall under the business income tax category.
Malaysia is relatively safe regarding low violent crime rates, though pickpocketing can be common, so watch out for that. Credit card fraud is also a problem there, so make sure you have one of those RFID protection wallets to help minimize risks.

One risk that shouldn’t be taken lightly is animal and insect bites. As funny as it sounds, monkey bites are no laughing matter, and they happen more frequently than you would think. Plus, Malaysia is home to some pretty dangerous insects and animals.

The cost of living in Malaysia is very low. People who move there can live a pretty lavish lifestyle for under $2k per month, especially on some of the cheaper islands.

The capital city Kuala Lumpur is a pretty cool place, a real modern metropolis for those who like city life. A lot is happening there in terms of nightlife, and the city felt very advanced and clean with plenty of cultural experiences to enjoy.

The easiest way to get residency is through their mm-2h program, which stands for Malaysia is my Second Home. This program is open to global citizens provided they can show proof of financial stability. This program allows foreigners to stay in Malaysia on a multiple-entry social visit pass that is good for 10 years with no minimum stay requirements. To qualify, applicants under 50 must meet the following criteria:

• Provide proof of bankable assets of at least MYR 500,000 (approximately $US 114,000)
• Proof of income of at least MYR 10,000 (approximately $US 2,300) per month.

Applicants over 50 must meet the following criteria:

• Proof of bankable assets of at least MYR 350,000 (approximately $US 80,000)
• Proof of income of at least MYR 10,000 (approximately $US 2,300 per month)

Any money brought into the country is tax-exempt and there are further conditions upon approval such as opening a Malaysian bank account and purchasing medical insurance from a Malaysian insurance company. Further details can be found here.

The internet speed in the capital is highly rated, varying depending on the location. The nation states the “average” internet speeds, but in some of the more remote locations the internet is pretty much non-existent.

Weather is something that should be taken into consideration. As it is a tropical climate, humidity is incredibly high year-round and Malaysia experiences not one but two monsoon seasons per year.

Malta

Malta is a fantastic European alternative to Portugal. Malta is the first crypto-friendly tax country to launch a holistic regulatory framework for blockchain technology, earning the title of “Blockchain Island.” Malta is suitable for crypto hodlers, but active day traders will likely want to avoid this one.

Residents here do not pay capital gains tax on long-term holdings or when crypto is purchased or sold. Crypto day trading will be taxed here, similar to stock market day trading, which is 35%. Getting residency here is fairly straightforward for EU citizens as they simply need to prove they are:

• Financially Stable
• Employed

Non-European citizens will be allowed to obtain residency at the “discretion of the authorities” and factor in considerations such as:

• Living in Malta for at least 6 months
• Financially Stable
• Employed

As it is at the discretion of authorities, this option likely isn’t typical for non-European citizens, but it may be worth a look.

Malta residency has no minimum value property requirement, and it is renewable every 5 years. The cost of living in Valletta is a bit higher than many European countries coming in as the 25th most expensive European city, with the average cost of living for a single person coming in at around 2,500 Euros per month.

Malta has a slow pace of life and is not known much for vibrant nightlife, making it more appropriate for those looking to relax while enjoying a lovely culture and beautiful architecture as opposed to partying. In addition, the internet speeds are very fast on the island, which is always an important consideration.

Malta enjoys nice weather year-round, never getting too hot or cold, and no monsoon seasons here.

Factors to Consider Before Making the Move

Deciding to move to a new country should not be all about tax avoidance. Quality of life, cultural experiences, safety, and climate should seriously be considered before making a move, and a lot of research should be done beforehand. Even considerations such as food likes and dislikes or dietary restrictions like vegetarianism are important factors to consider as not being able to enjoy the available food can really be a bummer.

Professional advice should be sought before deciding to move countries as it can have a significant impact on asset holdings and tax implications. Many countries require you to renounce your tax residency status from your home country before becoming a tax resident of another country which can have other significant impacts.

For example, If you want to move from country B and obtain tax residency in country C, country B may have a requirement that you sell all of your assets and close bank accounts to move, and the assets sold in country B may be subject to capital gains taxation. This means that you may need to sell a home, a car, and all of your investments in your home country B, which could all be subject to hefty capital gains tax. Therefore, it may not make sense to pay 50k in capital gains tax on a house, a car, and other investments to save 5k worth of crypto tax by moving to another country.

Speak to an accountant and an immigration specialist from the country you are planning on relocating to, and a tax professional in your home country before making a move as there are a lot of factors that need to be considered.

In wrapping up, there are many amazing places to choose from if you are considering uprooting your life and venturing off into a brave new world. I cannot stress the importance of DYOR and make sure it is the right choice for you.