If you are an Indian Citizen trying to do trading Crypto trading from India, then sadly you are doing a big mistake as India is one of the worst countries to be doing crypto trading.

Trading in Crypto is extremely difficult from India as the Indian Govt is trying to discourage crypto and it is for this reason that most of the professional crypto traders have either relocated abroad or have setup companies abroad and are doing crypto trading on International Exchanges through their foreign entities.

Here is the list of countries where most Indians are relocating/ setting up companies for the purpose of crypto trading:-

  1. Dubai, United Arab Emirates
  2. Singapore
  3. Hong Kong
  4. Germany
  5. The Cayman Islands
  6. El Salvador
  7. Malta
  8. Georgia
  9. Malaysia
  10. Switzerland
  11. Portugal
  12. Luxemberg
  13. Bermuda

1. Dubai, United Arab Emirates

The message from the Govt of Dubai is clear “Dubai wants to be the crypto capital of the world”.

And to ensure that Dubai actually becomes the crypto capital of the world, the Govt is taking initiatives to ensure that crypto traders from across the Globe come to Dubai and do crypto trading from Dubai.

Dubai also does not levy capital gains tax on Individuals and therefore the gains made from the sale of crypto in Dubai is completely tax free.

As Dubai is very close to India (Only a 3 hour flight) and 35% of its population is Indian, Dubai is the default option for all crypto traders.

Some crypto traders relocate to Dubai and do crypto trading on their own Individual name while others just simply setup a company in Dubai and do trading in the name of the Dubai company while residing in India.

Getting a long term residence visa in Dubai is also easy as everyone who sets up a company in Dubai gets a Long Term Residence VISA.

Recommended Read: How Indians can setup a Company in Dubai

2. Singapore

Although Singapore is not a tax free country, but Singapore also does not levy any Capital Gains Tax. As Crypto is considered a Capital Asset, therefore Singapore Govt does not levy any Capital Gain Tax on Crypto.

And as Singapore is also fairly close to India, therefore Singapore becomes the 2nd most popular option for Indians to relocate to. (As most of the people in Singapore are Chineese, Singapore is still not the most popular option for Indians.)

3. Hong Kong

Another country which is attracting Indians because of its proximity to India is Hong Kong. The crypto scene in Hong Kong is vibrant and there are several crypto exchanges registered in Hong Kong.

A lot of Indians used to prefer Hongkong before Covid, the scene has changed post Covid as HongKong is also a Chineese territory and Indians are avoiding china dominated regions.

4. Germany

With regards to cryptocurrencies, Germany has developed a reputation for being modern and forward thinking. The nation has recognized crypto currencies as a legitimate medium of exchange for discreet transactions, giving it acceptance and validity in the world of finance.

Although Germany is one of the highest taxed countries in Europe, they have a very interesting approach to Crypto.

As per the Germany tax laws, if you hold Crypto for more than 1 year – then no tax is levied on the sale of this crypto. However, if you sell this before 1 year – then tax is applicable on the gains made from the sale of crypto.

Although Germany does not levy tax on gains from sale of crypto which was held for more than 1 year, it still levies income tax in the following cases:-

  • If you are receiving your salary/ professional fees in Crypto
  • If you are mining Crypto

Germany has also put in place strict regulations that target fraud and money laundering. These steps are intended to increase security and safeguard crypto currency users and investors. Germany displays its commitment to supporting a secure and open crypto industry by addressing the possible risks and enforcing stringent compliance standards.

5. Cayman Islands

The most favorite tax heaven of Americans for ages has been Cayman Islands and it still continues to remain their hot favorite.

This small island neither has any capital gains tax nor income tax. So irrespective of whether you are earning capital gains by selling Crypto or are getting paid in Crypto, Tax does not get applicable under any circumstance.

However, the cost of living in Cayman Islands is extremely high and everyone cannot afford to stay in the Cayman Islands.

6. El Salvador

El Salvador is one of the very few countries in the world which accepts crypto currency as a legal tender. People in El Salvador can but everything from Groceries to a House using crypto and El Salvador gathered world-wide news coverage when this was initially announced in 2021.

Apart from making Crypto currency as a legal tender, there are no taxes for foreigners who sell crypto currency in El Salvador.

7. Malta

Malta is a crypto friendly country and has released a holistic framework for “Distributed Ledger Technology”, earning itself the title of the Blockchain Island

According to these regulations, cryptocurrencies are considered as ‘a unit of account, medium of exchange, or store of value’ making it the country with the highest acceptance of cryptocurrencies as a means of transactions.

Crypto Investors don’t have to pay any taxes in Malta. However, crypto traders are required to pay a tax of 35% on the profits made by trading in Crypto.

8. Georgia

Georgia has emerged as a crypto friendly nation offering a favorable tax regime for Individuals engaging in cryptocurrency.

Georgia only levies tax on Georgian sourced income and as Income from Crypto is not considered as sourced from Georgia, therefore sale of crypto is tax free in Georgia.

However, businesses holding crypto are still required to pay a 15% Corporate Tax.

9. Malaysia

The Malaysian Law does not tax any long term capital gains from any investment which is applicable to crypto investments.

Even day trading in crypto was considered tax-free until recently, making all transactions involving crypto tax free. However, according to recent debates, active traders of crypto are required to declare their gains from trading.

If the profits from the purchase and sale of crypto are revenue in nature, they will be taxed as business income under income tax.

10. Switzerland

Swiss banks were one of the first in the world to offer crypto business accounts in 2018 recognising that banking channels would help to eliminate fraudsters and encourage legitimate business.

Zug, a city in Switzerland is known as the “Crypto Valley”. The city is a crypto hub with blockchain startups, enterprises, shops and entreprenuers. Switerland is also home to some major crypto projects such as Etherium and Bitcoin Suisse.

Crypto currency that is traded or held as an Investment will not be subject to capital gains tax if you are trading in your Individual account and qualified as an Individual trader.

However, buying and selling via qualified professional traders is considered as business income and is taxed accordingly.

11. Portugal

A desirable location for cryptocurrency entrepreneurs and investors is now Portugal. The nation provides a tax environment that is advantageous to cryptocurrencies, with a “crypto-friendly tax regime” that exempts people from VAT and has favorable tax rates for operations related to cryptocurrencies. Additionally, Portugal has demonstrated support for blockchain innovation and offers a clear regulatory framework for crypto assets.

12. Luxemberg

Blockchain technology and cryptocurrencies have been adopted by Luxembourg, which has positioned itself as a major financial centre. The nation offers investors a regulatory environment that ensures legal security and safety. With no capital gains tax on cryptocurrency gains for individuals and a friendly tax structure for blockchain enterprises, Luxembourg has favorable tax rules.

13. Bermuda

Like the Cayman Islands, Bermuda also does not have any capital gains tax. However, it is important to note that the cost of living in Bermuda is very high and therefore only the ultra-rich prefer Bermuda.