caalley logo

The alley for Indian Chartered Accountants

Crypto millionaires migrating to protect interests, Singapore tops list

New Delhi, Sep 6, 2023 

In terms of the tax-friendliness parameter, which assesses a country's approach to taxing cryptocurrency-related activities, Singapore and the UAE score a flawless 10 out of 10

There are 88,200 crypto millionaires worldwide, with just under half (40,500) holding their fortunes in Bitcoin, according to the inaugural Crypto Wealth Report compiled by investment migration specialists Henley & Partners. The total market value of crypto is now a staggering $1,180 billion and there are 425 million individuals globally that own cryptocurrencies.

Traders, miners, investors, and cryptopreneurs are exploring investment migration strategies to safeguard their interests. "We have seen a significant spike in enquiries from crypto millionaires over the past six months looking to protect themselves against any potential future bans on the trading or use of cryptocurrencies in their own countries and mitigate the risks of aggressive fiscal policies that tax digital assets at source," said Dr. Juerg Steffen , CEO of Henley & Partners.

In the global super-rich league, there are now 182 crypto centi-millionaires, namely, high-net-worth individuals with crypto holdings of$ 100 million or more, 78 of whom are Bitcoiners, while six of the world's 22 crypto billionaires have amassed their fortunes fro

"Crypto is the most inevitable trade and technology of the last 30 years, and now is a fantastic opportunity to buy as we're unlikely to ever see these prices again," said global investment expert, Jeff D. Opdyke.

Including over 750 data points, Henley's new Crypto Adoption Index assesses and rates crypto-friendly investment migration host countries based on their level of adoption and integration of cryptocurrencies and blockchain technology. Singapore takes the leading position overall with a score of 50.2 out of 60, or 83.76%, with Switzerland in 2nd place (78.17%), followed closely by the UAE on 76.17%. Hong Kong (4th on 76%), the United States (5th on 73.83%), Australia (6th on 71.83%), and the United Kingdom (7th on 71.17%) all land first-class honors when it comes to crypto adoption, with Canada (8th on 67,33%), Malta (9th on 64.83%) and Malaysia (10th on 62.5%) also making it into the Top 10.

“Some of the most attractive locations for those involved in cryptocurrencies are in countries that offer residence and citizenship by investment programs, which enable them to obtain the right to reside and/or citizenship in return for making a significant investment. Cryptocurrencies’ prominence in high-net-worth individuals’ portfolios has also increased as investors seek new sources of return and diversification," noted the report.

Singapore leads the pack as the top crypto hub

With its innovative ecosystem and supportive community, Singapore takes the leading position in Henley’s Crypto Adoption Index with a score of 50.2 out of 60, or 83.76%. The government cooperates closely with all actors — banks, businesses, and the public — for the optimal development of the national crypto sector, and the city-state’s crypto taxes are beneficial to individuals and investors alike, with no capital gains taxes.

Switzerland sits in 2nd place (78.17%) with its well-established crypto infrastructure, robust legal framework, and reputation for privacy and security, followed closely by the UAE in 3rd place on 76.17%.

The UAE stands out as a leading jurisdiction for crypto investors, with its strong public adoption score demonstrating a vibrant interest in the crypto ecosystem. The Middle Eastern powerhouse also offers favorable tax policies and a high level of economic stability. Hong Kong (4th on 76%), the US (5th on 73.83%), Australia (6th on 71.83%), and the UK (7th on 71.17%) all land first-class honors when it comes to crypto adoption, with Australia joining Singapore and Switzerland as frontrunners when it comes to providing a supportive regulatory environment that balances innovation with consumer protection.

Canada (8th on 67.33%), Malta (9th on 64.83%) and Malaysia (10th on 62.5%) all make it into the Top 10 countries hosting the most appealing investment migration program options for crypto investors. As Volek points out, “Malta’s reputation as the “Blockchain Island” has been bolstered by government initiatives to foster innovation, attract blockchain businesses, and provide regulatory clarity, while Malaysia is developing into a promising center for blockchain innovation in the Asian region with its burgeoning crypto community and the emergence of numerous start-ups.”

Most tax-friendly options

In terms of the tax-friendliness parameter, which assesses a country's approach to taxing cryptocurrency-related activities, Singapore and the UAE score a flawless 10 out of 10, with Hong Kong, Mauritius, and Monaco securing an impressive 9 out of 10, and Antigua and Barbuda, Malaysia, Namibia, and Switzerland each achieving a respectable 8 out of 10.

Switzerland does not charge any taxes on profits from crypto trading or investing. However, the country does have a wealth tax on investments, which is set by each individual canton. In addition, profits from crypto transactions such as mining, staking, and interest are taxed as ordinary income. In the UAE, the Financial Services Regulatory Authority of Abu Dhabi Global Market (FSRA-ADGM) was the first to provide rules and regulations regarding cryptocurrency purchasing and selling. The Emirates are generally very open to new technologies and have proposed zero taxes for crypto owners and businesses.

Spike in crypto adoption among investors and sovereign states

The UAE and Singapore again share the leading position when it comes to public adoption, which measures the level of awareness, interest, and engagement with cryptocurrencies in the general population, with each scoring 7 out of 10 for this parameter. The UK, US, Canada, Australia, Mauritius, Hong Kong, Switzerland, and Malta all make it into the Top 10 when considering factors such as the percentage of crypto users relative to the total population and Google search interest related to cryptocurrencies.

Portugal emerging as one of the most crypto-friendly destinations

As of August 2023, transactions made exclusively in cryptocurrencies are tax-free in Portugal. For individual investors, gains made from the purchase and sale of cryptocurrency are tax-free, as long as they are not your main source of income and you have held the tokens for more than 365 days. Companies that provide services related to cryptocurrency are still taxed on capital gains (which is currently between 28% and 35%

[The Business Standard]

Read more on:
Don't miss an update!
Subscribe to our newsletter