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Jeff D. Opdyke is a global investment expert for International Living who has been investing overseas for 30 years, and the author of 10 books on investment and personal finance.
I attended a crypto conference in Dubai over the spring and while socializing near a pool at an after-party one evening, a guy who looked to be in his 30s approached.
“You’re the visa guy, right?”
Across a corner of X/Twitter known as “crypto Twitter”, I’ve picked up a reputation as “that guy who knows about visas and residence permits” around the world. It’s all part of my day job as a writer focused on living and working abroad, but dovetails into my side-job as a writer focused on cryptocurrency opportunities.
When I confirmed that, “yep — I’m that guy”, my inquisitor asked a question I hear a lot these days: “What’s the best place to get residence if you want to protect your crypto wealth?”
That’s a big question.
In many circles, it is presupposed that investors are trying to avoid as much tax as possible on the crypto wealth they’ve amassed or the crypto trading they do to generate a livelihood.
And that, in turn, raises lots of eyebrows globally because it makes crypto seem like an investment focused on tax evasion. And that’s a very myopic view.
The reality is that countries all over the world — some aggressively — are touting their local tax regimes that tread lightly on crypto profits and crypto trading. By my count, at least 21 countries impose a 0% tax rate on crypto. Others offer relatively low crypto taxation, such as Cyprus, with a 12.5% tax on crypto profits, or Montenegro (soon to join the European Union and where Ethereum co-founder Vitalik Buterin recently gained citizenship), with its 9% tax rate on crypto.
As such, the question that guy in Dubai asked me gets to the bigger issues of investment migration and tax residence that countries themselves are promoting to be more competitive in luring capital into their economies.
Perhaps no country defines the trend more than El Salvador. There, bitcoin is legal tender, crypto capital gains are taxed at 0%, and the country offers what is essentially a “citizenship by bitcoin” initiative in which Salvadoran citizenship and a passport are for sale for an (eyewatering) donation to the country of USD 1 million worth of bitcoin.
But the Central American nation is hardly alone.
Numerous countries have passed or are currently haggling over laws that specifically aim for low or zero taxation on crypto, both at the individual and corporate level — all part of that broader effort to lure crypto wealth and crypto-focused companies into the local economy.
For Americans, of course, these efforts are largely moot since Uncle Sam reaches into the pockets of his passport holders no matter their global address, meaning crypto profits are taxed whether an American lives in Tampa or Timbuktu, although living abroad can still provide other tax advantages.
For many nationalities, relocating one’s life — or tax residence — to a country promoting its light bite on crypto profits can mean saving tens or hundreds of thousands of dollars in taxes that would otherwise be owed, a great way to grow and/or preserve wealth.
Where to look, though? As picturesque as El Salvador is, the country isn’t one to which lots of crypto wealth is eager to migrate.
I’ve spent a great deal of time exploring this issue because so many people confront me with this question so often. As such, I have thoughts on which countries make the most sense for investors and traders who have amassed wealth in crypto or who are earning their way through life by trading crypto regularly.
The UAE is one of the top destinations to consider.
Aside from the fact that this Middle Eastern nation is a vibrant, modern, and rapidly growing country with access to anything you might want or need, the UAE does not levy a capital gains tax or a personal income tax on crypto holdings for individual investors.
Thus, profits from selling, staking, trading, and mining crypto are tax-free.
Residence, meanwhile, is quite easy to come by.
The country operates a golden visa program through which an investment of 2 million Emirati dirhams (roughly USD 550,000) lands one a visa to live anywhere in the UAE.
For others, there’s an opportunity to set up a local LLC inside one of the UAE’s “free zones”, and then hire yourself as the LLC’s employee. With that, you — the employee — are eligible for a standard work visa and standard residence visa as an employee of a UAE company.
Depending on the free zone in which the LLC is established, share-capital requirements can be as low as USD 0. In other cases, it’s between roughly USD 275 and USD 13,600 to establish a UAE free-zone LLC.
This Central American country levies no tax on crypto capital gains and no tax on profits made from crypto trading. It is truly a zero-tax option for those who are heavily tied to the crypto markets, particularly traders, since many countries that are otherwise friendly toward crypto tend to impose taxes on trading activities that serve as someone’s source of income.
Residence is available through a couple of channels.
One option is to invest USD 100,000 in a government-approved reforestation program. This is a long-term investment, however, given that you’ll need to remain invested in the fund for 20 to 25 years to see a return. Anything shorter and you’re likely to lose money.
A second option is for citizens from Panama’s list of so-called ‘friendly nations’, which requires a deposit of at least USD 200,000 in a local bank. Or buy a house locally for at least USD 200,000.
Either approach leads to a residence visa, and, if you wish, you can apply for Panamanian citizenship after five years.
This island nation in the Indian Ocean off the coast of southeastern Africa is similar to the UAE in some respects.
It imposes a 0% tax on crypto capital gains, while someone who sets up a small business locally to derive their livelihood from crypto trading pays a 1% tax, plus up to 2% to the “corporate social responsibility fund”.
In short, the Mauritian tax bite is exceptionally light, at worst.
As for residence, the country offers the Mauritius Residence by Investment Program requiring an investment of USD 375,000 in one of six luxury residential real estate projects on the island among other options.
Malaysia does not view crypto as a “capital asset” nor does it classify crypto as legal tender. Thus, crypto profits are tax-free for individuals.
There is, however, a caveat for traders. Those who earn their income through repetitive trading — think: day traders or those who run a business focused on crypto trading — will pay tax on their profits of between 3% and 30%.
Thus, so long as you’re not trading crypto for your income, Malaysia is an option.
Residence is available through the Premium Visa Program. The requirements are straightforward: Submit proof of offshore income equivalent to 40,000 Malaysian ringgits per month (about USD 8,500), or 480,000 ringgits per year (about USD 100,000).
Once approved, you’d need to dump 1 million ringgits (about USD 212,000) into a fixed-deposit account at a local bank. The deposit amount must be maintained for the duration of your stay in Malaysia, though after one year you can withdraw up to 500,000 ringgits for approved expenses, such as buying local real estate, medical expenses, or paying for your child’s local education costs.
The Iberian nation is arguably one of the best spots for crypto investors who want to be in Europe.
Crypto falls under a special classification and carries a 0% capital gains tax rate on crypto held for at least a year. If held for a short period, then the profits are taxed at 28%. At the corporate level, crypto profits are taxed at between 28% and 35%, though structuring the income through an offshore LLC that distributes profits as dividends can reduce the rate to 0%.
The entry point for obtaining a Golden Residence Permit requires a minimum investment of EUR 250,000 (about USD 275,000) in preserving Portuguese cultural heritage or in support of local artistic production.
As crypto adoption rapidly spreads among consumers, investors, and businesses globally, governments are clearly going to continue competing for migrants that are flush with crypto wealth. And while leaving one country for another to benefit from lower crypto taxes might seem, to some, like a tax-evasion gambit, the reality is that countries themselves are encouraging this through the crypto tax schemes they promote.
As the old saw goes: Tax evasion is illegal, but legal tax avoidance is perfectly fine.
And when we’re talking about the kind of wealth crypto is generating on a near daily basis, partaking of the low tax rates certain countries offer on crypto can mean vast tax savings for savvy crypto traders and investors.
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
