Citizenship by Investment for Crypto Investors

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Bitcoin hodlers can reap a variety of benefits, including getting a second passport through the use of citizenship-by-investment (CBI) programs. Generally, a second passport from a tax-free country will only set the investor back around 3 to 4 BTC, at this current date when the price of Bitcoin hovers around $40,000. Compared to the passport benefits gained, this is quite the bargain. Unlike residency-by-investment or Golden Visa programs that only offer resident permits, CBI programs offer full passports.

In this article, we’ll be going over some of the best reasons why a crypto investor can benefit from a second passport and second citizenship.

1. They’re From A Crypto-Banned Country

Those coming from countries where crypto is banned will find engaging in blockchain/cryptocurrency projects quite difficult. To make this easier, they can move to a crypto-friendly or tax-free jurisdiction through CBI or residency programs.

The following countries have instituted a ban on cryptocurrency:

Full Ban

Banking ban

Implicit Ban

  • Algeria
  • Bolivia
  • Egypt
  • Iraq
  • Morocco
  • Nepal
  • Pakistan
  • United Arab Emirates
  • Vietnam
  • Bangladesh
  • Canada
  • Cambodia
  • China
  • Colombia
  • Iran
  • India
  • Jordan
  • Saudi Arabia
  • Bahrain
  • Bangladesh
  • China
  • Colombia
  • Dominican Republic
  • Indonesia
  • Iran
  • Kuwait
  • Lesotho
  • Lithuania
  • Macau
  • Oman
  • Qatar
  • Saudi Arabia
  • Taiwan
  • Thailand

2. Freedom of Travel

Having an additional passport with full citizenship benefits can open up a variety of other travel destinations for investors. There’s also visa-free movement to a variety of countries for the purposes of attending events in the industry or to promote their own initial coin offerings (ICOs). This is further exemplified through the fact that most crypto-opposing countries offer quite weak passports when it comes to freedom of travel.

3. Limited taxation or no taxation at all

There are tax-free countries that offer CBI programs to crypto investors. If you have the passport and/or citizenship of a country, that can be a crucial factor in determining your tax bracket. In almost all cases, CBI countries will exempt their non-resident citizens from personal income tax.

Capital Gains Tax

Personal Income Tax

  • Antigua – 0%
  • Dominica – 0%
  • Grenada – 0%
  • Saint Lucia – 0%
  • St. Kitts and Nevis – 0%
  • Bulgaria – 10%
  • Malta – 12%
  • Cyprus – No taxes
  • Vanuatu – 0%
  • Turkey – 22%
  • Antigua –  0%
  • Dominica – 0% (foreign income only)
  • Grenada – 0% (foreign income only)
  • Vanuatu – 0%
  • St. Kitts and Nevis – 0%
  • Saint Lucia – 0% (foreign income only)
  • Malta – 15% (foreign income remitted to Malta)
  • Cyprus – 20% to 35% (exempt for non-resident citizens)
  • Turkey – 35% (exempt for non-resident citizens)

4. Initial Coin Offerings

An Initial Coin Offering (ICO) is capable of being a source of capital for any number of start-ups. Using ICOs can help a start-up avoid laws that prevent them from approaching venture capitalists, banks or angel investors. Having a second passport can help make raising seed funding much easier than it would otherwise be.

Due to the fact that ICOs have been banned in quite a few countries due to their history with fraud and scams, lots of fully legitimate start-ups are finding themselves in a rough spot when it comes to securing seed fundings. For example, securities regulations in the U.S. stop cryptocurrency investors from investing in ICOs due to the fact that the tokens get classified as security offerings. Other countries that have banned ICOs include South Korea and China.

Meanwhile, the list of countries with ICO regulations is much wider:

  • France
  • UAE
  • New Zealand
  • Switzerland
  • Australia

Other countries have all issued regulations pertaining to ICOs. Countries will have different approaches to their regulation of crypto, tokens and ICOs. Because of this, having the added flexibility of a second passport is a great benefit.

5. U.S. Citizens are Renouncing their Citizenship

Many prolific Bitcoin investors have renounced their U.S. citizenship because of the tax implications of being an American citizen. The Foreign Account Tax Compliance Act (FATCA) affects many U.S. citizens as well, and has expedited some people’s decision to renounce. This trend has shown no signs of stopping, and many cryptocurrency investors today are looking to attain citizenship or residency in crypto-friendly countries like Switzerland, Portugal and Malta.

6. United States Instituting Regulations

The U.S. is the most populated country in terms of crypto holders. It is home to a variety of exchange and trading platforms in addition to mining facilities and blockchain-related start-ups. 

In this landscape, the U.S. has a variety of complex regulations pertaining to crypto due to the IRS’ effort to root out tax evasion among crypto investors. Because of this, the IRS handles virtual currency transactions, such as those made with crypto, to be just as taxable as any other transaction. Because of this, U.S. taxpayers have to report their crypto-related transactions on their tax returns.

The SEC has stated that BTC is not to be treated as a security, but ICOs and tokens are. The SEC hasn’t approved the BTC ETF fund yet, either. Take a look at this list of crypto-friendly countries compared to the United States. Those marked with an asterisk (*) offer Golden Visa programs.

  • Bermuda
  • Japan
  • Malta*
  • Gibraltar
  • Singapore*
  • Portugal*
  • Slovenia
  • Estonia
  • Georgia
  • Switzerland
  • Hong Kong
  • Belarus
  • Germany

How Much Does a Passport Cost?

Presuming the value of BTC to be at $7,000, these are the prices for passports in some foreign countries:

  • Antigua & Barbuda, Saint Lucia, and Dominica: 14 Bitcoin or $100,000 
  • Grenada, Vanuatu and St. Kitts & Nevis: 21 Bitcoin or $150,000
  • Malta: 139 Bitcoin or $1 million
  • Montenegro: 55 Bitcoin, or $400,000. Alternatively, 43 Bitcoin or $300,000 if invested into property
  • Bulgaria: 165 Bitcoin or $1.2 million 

The processing time for these can be as little as two to four months. However, none of these countries accept BTC or any other form of crypto as payment, though some agents do accept Bitcoin to cover legal fees and application fees.

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