Crypto-Friendly Country Comparison

Crypto-Friendly Country Comparison

In this series Exploratory reads, we give you the scoop on 6 countries that are currently popular in setting up a cryptocurrency/crypto asset business. These are: Singapore, Switzerland, Dubai, Panama, the Seychelles and the British Virgin Islands (BVI). We look at the overarching regulations (or lack of), the level of adoption, and the ease of setting up a business to conduct crypto related activities.

We will be publishing a new summary of each of the above jurisdictions over time, so keep your eyes peeled and subscribe for updates! 

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  • What is a payment service provider licence?


    • MAS regulates the activities carried out in relation to cryptocurrencies. Under the Payment Services Act 2019, a payment service provider licence (PS licence) is required if a person or business engages in any of the regulated activities stipulated in the Payment Services Act 2019.

      According to MAS (Pages)
      last revised on 23 September 2021

      Payment service providers and payment systems are both regulated under the Payment Services Act 2019 ("PS Act"). Payment service providers are licensed to provide specified payment services under the PS Act. Payment systems facilitate the transfer of funds between or among participants and may be designated under the PS Act for closer supervision.

  • How does MAS view NFTs?


    • While MAS does not explicitly regulate NFTs, it still considers whether or not it constitutes a capital markets product. 

      According to MAS (Parliamentary replies)
      Last revised 15 February 2022

      MAS does not and cannot possibly regulate all things or products that people choose to invest their money in. We consider the substance of an asset when assessing whether a product or activity should come under MAS’ regulatory remit. MAS does not currently regulate NFTs given the nature of their underlying assets, such as the few examples earlier. This is also the stance taken by most other leading jurisdictions.

      More fundamentally, with regard to digital tokens such as NFTs, MAS takes a tech-neutral stance and “looks through” to the underlying characteristics of the token to determine if it is to be regulated by MAS. Should an NFT have the characteristics of a capital markets product under the Securities and Futures Act (SFA), it will be subject to MAS’ regulatory requirements. For example, should an NFT be structured to represent rights to a portfolio of listed shares, it will like other collective investment schemes be subject to prospectus requirements, licensing and business conduct requirements.

    FinReg business tip

    NFTs are not explicitly regulated by the MAS. Instead, the MAS considers the substance of the NFT and assesses whether an NFT would constitute a capital markets product, and thus come under the Securities and Futures Act (SFA). 

  • How are cryptocurrencies taxed in Singapore?


    • "It depends on the type of activity that is being carried out:
      For trading in cryptocurrency in the ordinary course of business, profits would be subject to income tax.
      For purchase of cryptocurrencies for long-term investments, capital gains would not be subject to tax.
      For payment of cryptocurrencies for goods or services, the provider of the goods or services would be taxed on the value of the goods or services because the cryptocurrencies would be treated as intangible property and not legal tender."

      Income Tax Treatment of Digital Tokens 

      For Income Tax purposes:

      According to IRAS
      last revised on 17 November 2021

      Tax Treatment of Digital Tokens
      Businesses that choose to accept digital tokens such as Bitcoins for their remuneration or revenue or that trade in digital tokens are subject to normal income tax rules.
       
      Digital Tokens Received as Payment
       
      Businesses that choose to accept digital tokens such as Bitcoins for their remuneration or revenue are subject to normal income tax rules. They are taxed on the income derived from or received in Singapore. Tax deductions are allowed, where permissible, under our tax laws.
       
      Generally, these businesses should record the sale based on the open market value of the goods or services in Singapore dollars. The same applies for businesses which pay for goods or services using digital tokens.
       
      If the open market value of the goods or services that would have otherwise been exchanged in Singapore dollars cannot be determined (e.g. the good or service is only traded with digital tokens), the digital token exchange rate at the point of the transaction may be used.
       
      Learn more about the tax treatment of digital tokens received as payment (PDF, 236KB).
       
      Buying and Selling Digital Tokens
       
      Businesses that buy and sell digital tokens in the ordinary course of their business are taxed on the profit derived from trading in the digital token. Profits derived by businesses which mine and trade digital tokens in exchange for money are also subject to tax.
       
      Businesses that buy digital tokens for long-term investment purposes may enjoy capital gains from the disposal of these digital tokens. However, as there are no capital gains taxes in Singapore, such gains are not subject to tax.
       
      Whether gains from the disposal of digital tokens are trading or capital gains depends on the facts and circumstances of each case. Factors such as purpose, frequency of transactions, and holding periods are considered when determining if such gains are taxable.
       
      Learn more about the tax treatment of digital tokens (PDF, 236KB).
       
       
       
       
       
  • Holland & Marie

    Holland & Marie

    • Finance, Corporate & Consultancy Services
    • Mid-sized
    • Risk and Compliance Management
    • Tax, Accounting & Audit Services
    • Legal Services
    • Singapore

    Founded in 2018, Holland & Marie is a full-service compliance consultancy based in Singapore, and provides outsourced in-house counsel, risk management and C-Suite advisory to executive management and boards of directors. Collectively, Holland & Marie's consultants have professional expertise from Hong Kong, Japan, Korea, Japan, United States of America, United Kingdom and Singapore.

  • Rajah & Tann Singapore LLP

    Rajah & Tann Singapore LLP

    • Singapore Law Firm
    • Large
    • Legal Services
    • Singapore

    Founded in 1976, Rajah & Tan Singapore LLP is one of the largest full service law firms in Singapore with affiliate offices in Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand and Vietnam. it is a member firm of Rajah & Tann Asia, a network of law firms in Southeast Asia with over 800 fee earners. Rajah & Tann is regarded as one of the "Big Four" law firms in Singapore. Its clientele ranges from multinational and Fortune 500 corporations to emerging high-tech enterprises and start-ups.

  • Withers KhattarWong LLP

    Withers KhattarWong LLP

    • Singapore Law Firm
    • Large
    • Legal Services
    • Singapore

    Withers KhattarWong LLP offers a full range of legal services to corporations, institutions and successful individuals, including some of the biggest companies and leading families in Singapore. The firm's lawyers are qualified to practice in a wide range of key jurisdictions including Singapore, Australia, British Virgin Islands, India, Indonesia, Malaysia, New Zealand, UK and US.

  • Merkle Science

    Merkle Science

    • Digital Solutions Provider
    • Mid-sized
    • Risk and Compliance Management
    • United Kingdom

    Founded in 2018, Merkle Science is the next generation predictive cryptocurrency risk and intelligence platform that helps crypto companies, financial institutions, and government entities detect, investigate, and prevent illegal activities involving cryptocurrencies.

  • Fervent Chambers LLC

    Fervent Chambers LLC

    • Singapore Law Firm
    • Boutique
    • Legal Services
    • Singapore

    Founded in 2020, Fervent Chambers is a boutique firm that possesses core strength in resolving complex commercial disputes, private equity, venture capital and mergers & acquisitions. The firm assists companies from start-ups to listed multinationals and have particular industry expertise in the Construction, Oil & Gas, Shipping, Technology, Clean Energy and Hospitality sectors.

  • Millennium Law LLC

    Millennium Law LLC

    • Singapore Law Firm
    • Boutique
    • Legal Services
    • Singapore

    Incorporated in 2019, Millennium Law is a boutique law firm focused on corporate and commercial work and has advised many local and international clients on complex cross-border issues, ranging from corporate matters to multi-party arbitrations. The firm has served various banks, financial institutions, investment funds, multinational corporations to small and medium enterprises (SMEs), and start-ups.

  • PDLegal LLC

    PDLegal LLC

    • Singapore Law Firm
    • Mid-sized
    • Legal Services
    • Singapore

    Established in 2017, PDLegal LLC is a mid-sized full-service law firm based in Singapore. With industry recognised expertise, the firm delivers advocacy and advisory services to clients, based both in Singapore and overseas, on a wide spectrum of matters. The firm also has an India Desk and an active China Practice.

  • Paul Hype Page & Co

    Paul Hype Page & Co

    • Finance, Corporate & Consultancy Services
    • Mid-sized
    • Incorporation & Corporate Secretarial Services
    • Tax, Accounting & Audit Services
    • Singapore
    • Hong Kong

    An enabler of entrepreneurship, Paul Hype Page & Co. was established in 2008 to represent foreign expats and locals who are dreamers and trailblazers with an insatiable entrepreneurial spirit to incorporate businesses while accounting for happiness and success through expert execution. We offer one-stop consultancy services for company incorporation across multiple jurisdictions in Asia, accounting, auditing, taxation, compliance, and visa applications with our in-house employment agency that specialises in Employment Pass, LOC, Dependent Pass & LTVP in Singapore and beyond.

  • KGP Legal LLC

    KGP Legal LLC

    • Singapore Law Firm
    • Boutique
    • Legal Services
    • Singapore

    Founded in 2018, KGP Legal LLC is a Singapore-licensed corporate and commercial law firm with an international focus, that provides seamless assistance to clients in Singapore, Hong Kong, China and Japan. It is a member firm of the InterAsia Law Alliance, a network of independent liaison law firms in the region.

  • GYK Group

    GYK Group

    • Finance, Corporate & Consultancy Services
    • Boutique
    • Risk and Compliance Management
    • Incorporation & Corporate Secretarial Services
    • Tax, Accounting & Audit Services
    • Singapore

    GYK Group has more than 40 years of audit, accounting, tax and advisory (Compliance, Risk, Finance and Ops) expertise in Singapore. The group serves entities from FIs/MNCs to SMEs and startups in Singapore and Malaysia, including crypto companies, from incorporation to providing operational support such as the secondment of experienced c-suite officers.

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