.png){kind=logo}
A recent report by Social Capital Markets shows how the cryptocurrency businesses are growing in 2024, with Dubai leading, followed by Switzerland and South Korea.
These countries have benefitted from a good regulatory environment, moderate taxation system, and robust crypto firm environment.
Ranking the indicators for all the countries, Dubai tops the list with a general score of 79 points of 100 possible. It has been acknowledged for having an outstanding legal system for the cryptocurrency company to operate in the emirate. However, it is the establishment of the Virtual Asset Regulatory Authority (VARA) & the Dubai Financial Services Authority (DFSA) offering legal frameworks in the form of structures for the cryptocurrency industry.
Besides legal certainty, Dubai holds various tax incentives for cryptocurrency companies. Cryptocurrencies do not attract capital gains tax, and corporate taxes are mildly progressive, pegged at a reasonable 9% for any income over AED 375,000.
These policies create a favorable business environment and help crypto companies worldwide find effective opportunities to expand their operations at comparatively low costs. Dubai's growth in blockchain and cryptocurrency industries is bolstered by the DMCC Crypto Centre, which offers purpose-built infrastructure.
Switzerland comes second with a score of 74.5 due to its emergence as the “Crypto Valley” in Zug. This region consists of more than 900 registered crypto firms, owing to the favorable regulation adopted in Switzerland with the guidance of the Financial Market Supervisory Authority (FINMA).
FINMA registration provides legal clarity for crypto enterprises and is, therefore, stabilizing the business environment.
Switzerland is also friendly to crypto taxation, especially for a long-term investor subject to paying a capital gains tax of 7.8%. The corporate tax range starts from 12% to 21% depending on the canton while still being considered relatively low by an international comparison.
Further on, over 400 businesses have adopted cryptocurrency, proving the penetration of digital assets into the Swiss economy and contributing to the country’s image of a progressive and friendly investor market.
South Korea, with a score of 73.5, is third and can be considered the leader in cryptocurrency adoption. Under the supervision of the Financial Services Commission (FSC), the Korea Financial Intelligence Unit (KFIU) has played a major role in developing a favorable legal landscape for the evolution of crypto-related enterprises.
The South Korean government has also introduced tax measures that enhance the country's attractiveness as a crypto hub. Notably, implementing capital gains tax on cryptocurrencies has been delayed, with plans to introduce related corporate tax legislation by 2025. This interim tax relief is expected to attract more crypto enterprises to the region.
With over 376 active crypto companies and ongoing state-supported initiatives like Central Bank Digital Currency (CBDC) exploration, South Korea is poised to maintain and expand its influence in the crypto industry, setting a benchmark for other Asian nations.
