UAE Tops 2024 List of World’s 5 Most Crypto-Friendly Countries

News Desk 14 October 2024

5 minutes read

As cryptocurrency continues to reshape digital assets and investments, nations worldwide are racing to position themselves to capitalize on the growth of this transformative industry. Therefore, some countries have created robust regulatory frameworks and tax policies to foster innovation and attract crypto-based startups.

Social Capital Markets’ latest report shines a spotlight on the top crypto-friendly countries of 2024, with a mix of long-standing leaders and emerging players.

Here’s a look at the top 10 countries that are paving the way for cryptocurrency businesses to thrive, based on factors like regulatory clarity, tax policies, and the overall environment for blockchain ventures.

Quick Overview of Key Statistics

Dubai, UAE (Score: 79): Dubai leads with top scores in regulatory clarity, no capital gains tax, and favorable corporate tax (9%), plus affordable licensing fees, making it a top crypto destination.
Switzerland (Score: 74.5): Switzerland ranks second, with 900 registered crypto companies and a favorable 7.8% capital gains tax for long-term investors.
South Korea (Score: 73.5): South Korea holds the third-highest score, playing a key role in the global crypto landscape.
Singapore (Score: 72): Singapore ties for fourth, with $8.9 million in blockchain grants, offering strong support for crypto businesses.
Brazil (Score: 66.5): Brazil ranks 10th, trailing Dubai by 12.5 points but maintaining a strong presence.
Germany (Score: 66.5): Germany matches Brazil’s score, offering similar conditions for crypto businesses.
USA (Score: 71): The USA leads in crypto adoption with 5,968 businesses accepting cryptocurrency, scoring 20/20 in this category.
Portugal (Score: 51.5): Portugal has 108 businesses accepting crypto, a 28% short-term capital gains tax, but favorable conditions for long-term investors.
Malta (Score: 59.5): Malta supports blockchain businesses with a 35% corporate tax but a favorable regulatory framework and 15 authorized crypto companies.

Top 10 Crypto Business Friendly Countries

Dubai, UAE
Switzerland
South Korea
Singapore
USA
Estonia
Italy
Russia
Germany
Brazil

1. Dubai, UAE

G20 Nation – Yes
Regulatory Framework: Dubai Multi Commodities Centre (DMCC), Dubai Financial Services Authority (DFSA)
Clarity of Laws: Clear and supportive
Capital Gains Tax: No capital gains tax
Corporate Tax: 9% for taxable income above AED 375,000
Registered Crypto Companies: 550+
Crypto Business Friendly Total Score: 79/100

Dubai has emerged as a progressive crypto country in the last few years. Its DMCC ( Dubai Multi Commodities Centre) has even added a crypto center and a launchpad for companies working with crypto and blockchain technologies.

This G20 nation has regulatory entities like VARA (Virtual Asset Regulatory Authority) and DFSA ( Dubai Financial Services Authority).

Companies must register with DFSA and DMCC to operate a crypto business in Dubai. The government does not impose a capital gains tax on crypto corporate income, making it appealing to crypto firms.

Additionally, Dubai has a low corporate income tax rate of 9% for income above AED 375,000. There are currently over 550 registered crypto firms operating in Dubai.

2. Switzerland

G20 Nation – No
Regulatory Framework: Swiss Financial Market Supervisory Authority (FINMA)
Clarity of Laws: Clear and supportive, especially in Zug
Capital Gains Tax: 7.8%
Corporate Tax: 12%-21%
Registered Crypto Companies: 900+
Crypto Business Friendly Total Score: 74.5/100

Switzerland has made significant strides in the crypto space. Its city of Zug is recognized as a global crypto hub. In 2018, the economy minister, Johann Schneider-Ammann, announced his vision to make Switzerland a crypto nation.

The Swiss Financial Market Supervisory Authority (FINMA) provides clear and supportive regulations, particularly in the crypto-friendly canton of Zug. Crypto companies are required to register with FINMA.

The clarity of laws here has made it a preferred destination for over 900 registered crypto businesses.

The nation has established reasonable tax rates for crypto service providers.

Switzerland has imposed a 7% capital gain tax and corporate tax income rate ranging from 12% – 21%. Plus, over 400 various companies within the country accept cryptocurrency as payment.

3. South Korea

G20 Nation – Yes
Regulatory Framework: Korea Financial Intelligence Unit (KFIU), a division of the Financial Services Commission (FSC)
Clarity of Laws: Developing clarity
Capital Gains Tax: Postponed (0%)
Corporate Tax: Postponed till 2025
Registered Crypto Companies: 376+
Crypto Business Friendly Total Score: 73.5/100

South Korea, another G20 country, is becoming a hotspot for crypto businesses.

The digital asset transaction and services are regulated by entities like the Korea Financial Intelligence Unit (KFIU), a division of the Financial Services Commission (FSC).

However, the regulations concerning cryptocurrency in this area are still being developed.

To run a crypto service firm in South Korea, businesses need to register with FSC and operate in compliance with the same entity’s laws.

Even though the regulatory framework is still developing, the country’s commitment to fostering a crypto-friendly environment is evident.

South Korea currently has postponed capital gains tax, and the corporate tax will be enforced in 2025. With over 376 registered crypto companies, South Korea is steadily gaining traction as Asia’s crypto powerhouse.

4. Singapore

G20 Nation – No
Regulatory Framework: Monetary Authority of Singapore (MAS)
Clarity of Laws: Clear and supportive
Capital Gains Tax: No capital gains tax
Corporate Tax: 17%
Registered Crypto Companies: 100+
Crypto Business Friendly Total Score: 72/100

Singapore is a prime business hub, including for crypto companies.

Corporations need a license from the Monetary Authority of Singapore (MAS) to establish a crypto business in Singapore.

Additionally, the country supports the crypto industry through the Cryptocurrency and Blockchain Association, which assists small and medium-scale enterprises in this niche.

The absence of capital gains tax and a flat corporate tax rate of 17% on chargeable income are significant draws for crypto entrepreneurs.

With almost 19 registered companies, Singapore dominates Southeast Asia’s crypto business space. The country allocated a significant grant of $8.9 million for the research and development of blockchain technology in Southeast Asia.

5. USA

G20 Nation – No
Regulatory Framework: Securities and Exchange Commission (SEC), Financial Crimes Enforcement Network (FinCEN)
Clarity of Laws: Mixed clarity, varies by state
Capital Gains Tax: Varies by state (mostly 0%)
Corporate Tax: 21%
Registered Crypto Companies: 474+
Crypto Business Friendly Total Score: 71/100

Crypto is widely accepted in the USA. Over 5000 businesses in different niches accept cryptocurrency as payment in the country.

From this, it’s clear that crypto is a substantial industry in this G20 nation. However, the clarity of laws varies by state, creating a mixed regulatory environment.

The USA has a considerable crypto sector, with many states enacting pro-crypto laws. For instance, Colorado offers a sandbox program for blockchain businesses to test new products and services.

Currently, the country doesn’t levy any capital gain tax on cryptos. The corporate income tax rate stands at 21%, and the license fees can be substantial, exemplified by the government fee of $176,226.

In the end, the USA continues to be a major player with many registered crypto companies, fueled by its expansive market and innovative spirit.

As we look toward the future of cryptocurrency, the progress made by these nations is truly commendable. Each of the top-ranked countries has demonstrated a remarkable commitment to enhancing innovation and creating an environment where crypto businesses can thrive.

Dubai, UAE leading the pack with its exceptional regulatory framework and favorable tax policies, exemplifies the proactive approach needed to harness the full potential of the digital economy.