Top 5 Crypto-Friendly Cities in 2023 Based on Taxes and Living Conditions

In 2023, the global crypto landscape is rapidly evolving, with regulations and taxes tightening their grip on the industry. Crypto workers and enthusiasts are on the lookout for safe havens that embrace distributed ledger technology and digital currencies without numerous complications.

So, you can explore our list of the top crypto-friendly cities, where innovative regulations and favorable tax policies provide a haven for crypto workers and investors. From the picturesque Zug in Switzerland to the forward-thinking Dubai, these cities could offer a refuge from the tightening regulatory landscape, making them ideal destinations for those seeking to live and work in the crypto space.

Zug (Switzerland)

Zug, often referred to as "Crypto Valley," stands as a testament to Switzerland's crypto-friendly environment. With its favorable regulatory framework, low taxes, and a proactive approach to embracing cryptocurrencies and their related technology, Zug has become a global hub for crypto-related businesses and innovation.

This is a scenic city located in central Switzerland, known for its lakeside setting and proximity to the Swiss Alps. The region experiences a temperate climate, and it’s renowned for its cultural events, stunning landscapes, and a rich history of commerce and innovation. Today, it’s also home to over 800 crypto companies and organizations, including the Ethereum Foundation, Cardano Foundation, Tezos Foundation, Dfinity, Nexo, and Bancor.

The region offers a low corporate income tax (up to 15.1%), a Capital Gains Tax of up to 7.8% (only for businesses and big traders), and the ability to pay taxes in cryptocurrency. VAT is not applied to native token transactions, like Bitcoin or Ether. Additionally, cantonal taxes based on market value, like the Net Wealth Tax, may vary based on factors such as income, marital status, and residence permit type. A single taxpayer with an income below 77,000 CHF (approx. 77,800 EUR) could be exempt.

Singapore (Republic of Singapore)

Singapore has emerged as a crypto-friendly city with a well-defined regulatory framework. It serves as a hub for around 659 crypto-related businesses, including major companies and NGOs like Binance (until 2021), Oasis Foundation, Moonbeam Foundation, and Crypto.com. Singapore's regulatory structure, digital infrastructure, and ease of doing business have made it a top destination for crypto companies, despite recent setbacks faced by homegrown projects (aka Terraform Labs and 3AC).

This island state is situated in Southeast Asia, boasts a tropical climate, and is known for its high living costs (and salaries). Singapore's crypto community is diverse and inclusive, attracting talent from around the world. Despite growing competition from cities like Dubai and Hong Kong, Singapore remains a strong player in the crypto regulatory space and continues to foster innovation and collaboration within the fintech industry.

It stands out due to its lack of capital gains tax, making it an attractive location for crypto investors. Individual taxpayers generally don't need to pay income tax on their crypto holdings unless they are professional traders, big miners, or receive crypto as payment for goods and services. Besides, paying with crypto doesn’t imply taxes.

A setback here could be that people engaging in crypto staking and lending activities, earning an annual income of SGD 300 (around $219) or higher, may probably be liable for income tax on their profits. This tax depends on an individual's residence status (resident or not), and varies between 0% and 24%, depending on the annual income.

Berlin (Germany)

Berlin is located in northeastern Germany and is both the largest city in the country as well as its capital. It’s a tech hub that has attracted global companies like Google and Meta and is also a major draw for crypto enthusiasts. The city's crypto scene thrives on community-driven, decentralized events like the Berlin Blockchain Week. It offers diversity, numerous meetups, and spaces for fintech enthusiasts.

Its crypto influence is undeniable, with ties to Ethereum's early days and the first Ethereum developers' meetup in 2014. Kreuzberg's Room 77 became the first bar globally to accept Bitcoin, and now there are around 12 cryptocurrency ATMs in the city. Besides, over 97 crypto-related projects, from DeFi platforms to NGOs, thrive in Berlin today. They include brands like Stacks, Tendermint (Ignite), Aeternity, Energy Web, and Matter Labs.

Berlin's cost of living remains favorable compared to other European cities. Germany's crypto tax policies incentivize long-term crypto holdings since profits are only taxable if exchanged to fiat before a full year. Short-term income taxes vary depending on marital status and annual income, from 0% (income of less than $11,500) to 45% (income of over $293,800). Annual earnings of up to $634 aren’t taxable, even if exchanged to fiat before a year.

San Salvador (El Salvador)

San Salvador, the capital of El Salvador, has emerged as a crypto-friendly city in Central America, thanks to the country's pioneering approach to cryptocurrency adoption. El Salvador became the first nation to accept Bitcoin as legal tender in 2021. This move has been accompanied by various developments, including an exemption from Capital Gains Taxes for individuals and businesses.

Besides, San Salvador boasts 61 Bitcoin ATMs, crypto can be used to pay other taxes, and the government is planning to build its own Bitcoin City relatively close to there. This one is designed to operate entirely on geothermal energy from the Conchagua volcano and prioritize the use of Bitcoin as a key element for economic liberation. The project, which aims to attract local and foreign companies in the crypto industry, already received recognition and design awards.

Despite initial skepticism and uncertainty surrounding Bitcoin adoption, El Salvador's success has drawn considerable interest from both domestic and international investors. This unique approach to cryptocurrency has put San Salvador on the map as a crypto hub, with ongoing projects aiming to integrate crypto further into the city's infrastructure and daily life.

Cheyenne, Wyoming (United States)

Cheyenne, the capital of Wyoming, is a city in the United States known for its Western heritage and frontier history. On the other hand, it seems like Wyoming has more cattle than humans —but that may change with more crypto adoption. Currently, this state is considered the most crypto-friendly in the United States.

Since 2016, Wyoming has passed over 35 laws regulating various aspects of the crypto industry, creating a welcoming regulatory environment. Notably, the state passed a law exempting utility tokens from securities regulation, resolving a significant legal challenge for crypto companies. This legal clarity has made Wyoming attractive to crypto businesses, including major players like Kraken and IOG (formerly IOHK, Cardano developer).

According to the Center for Blockchain and Digital Innovation at the University of Wyoming, around 3,000 crypto companies are domiciled in Wyoming now. Besides, the state legally recognizes regulated custodians for crypto assets and allows its authorities to issue a stablecoin backed by U.S. dollars or Treasury bonds.

On top of all this, Wyoming is tax-free for cryptocurrencies. It has no state taxes on crypto earnings, transactions, personal income, corporate income, gifts, or inheritance. And it’s also one of the least expensive states in the country. The crypto community in Cheyenne often consists of startup creators, miners, legal professionals, accountants, and influential figures.

More cities (and citadels)

Beyond the ones mentioned above, numerous cities worldwide are embracing cryptocurrency, offering favorable regulations and support for crypto firms. Dubai (UAE), known for crypto-friendly regulations, is luring more and more crypto companies like Boundless Pay, Metafluence, and Singular One. Lisbon combines a high quality of life with a low cost of living, making it attractive to remote crypto workers.

Italy's Rovereto is a long-standing Bitcoin hub where cryptocurrency is widely accepted for various services and products. Madeira, a region in Portugal, is promoting crypto adoption by offering low taxes for crypto-related businesses. Ljubljana in Slovenia boasts a significant number of businesses accepting crypto payments and is working to become a "Bitcoin City," with an homonymous commercial complex.

In addition, Latin America has seen the emergence of “Bitcoin citadels” like El Zonte in El Salvador, Praia Bitcoin Brasil in Brazil, Bitcoin Jungle in Costa Rica, and Bitcoin Lake in Guatemala. These communities, often consisting of individuals underserved by traditional banking systems, have embraced Bitcoin and cryptos as an alternative. They've established circular economies, promoting crypto adoption among local merchants and offering educational resources.

Finally, we can also mention Liechtenstein and its capital Vaduz as one of the first places in the world to properly regulate and welcome cryptocurrencies —through its Blockchain Act in 2020. Obyte Foundation is based in this territory. So, as you can see, the world can be your oyster! There are a lot of crypto-friendly cities to choose to live and work in 2023. Now it’s up to you to pick one.