By Anayat Durrani
Buying property using cryptocurrency is becoming a growing possibility in more countries. The use of cryptocurrency in the investment immigration industry is starting to take off, most recently with Portugal and with the Caribbean islands looking to be warming up to the idea.
“Cryptocurrency and blockchain are having a very significant impact on the Citizenship by Investment Program industry,” says Armand Tannous, vice president of North America and Latin America for Apex Capital Partners. “Our team at APEX has seen a surge in inquiries of well over 300% year over year.”
Foreign investors have become increasingly interested in purchasing real estate with cryptocurrencies in Portugal, for example, known as a tax haven for crypto-businesses. Recently, an apartment in Portugal was purchased by a buyer paying entirely in cryptocurrency. The home was purchased for three bitcoins without conversion to euros. A new regulation by the Order of Notaries (ON) now allows real estate transactions in the country using digital currencies.
Tannous says the inquiries they have received “are specifically from individuals that have made a fortune from cryptocurrency investments, as well as business professionals that strongly believe that cryptocurrency will positively impact their businesses in the future.”
Which ones are the crypto-friendly nations when it comes to the RCBI industry?
Cryptocurrency is quickly becoming more mainstream and accepted and some countries appear to be using it as an incentive to lure investors.
“Countries like Canada, United Kingdom, France, Sweden, among others, offer visas for entrepreneurs and innovators, with important incentives, such as a path to residency, low investment, easy process,” says Silvina Tondini, attorney, Tondini Law. “Additionally, many desirable countries are also crypto-friendly, adopting forward-thinking policies and promoting opportunities for investors and entrepreneurs. For instance, unlike the U.S., several countries are crypto tax-free.”
Having more than one nationality means greater benefits of travel, economic, and political freedom. St. Kitts and Nevis as well as Antigua and Barbuda are Eastern Caribbean countries that have emerged as crypto-friendly citizenship by investment regions. Antigua and Barbuda are part of the Eastern Caribbean Currency Union (ECCU) that started its own digital currency, called DCash. Investors in the Caribbean can partake in investment immigration and freely pursue their crypto activity.
Understanding the crypto trend and the role on the investment immigration industry
To understand why crypto is a trend, Tannous says it’s important to look at what is behind cryptocurrency and what makes it so attractive —the Blockchain concept.
“Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions,” says Tannous. “The innovation of blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party. In other words, cryptocurrency is decentralization and self-sovereignty.”
He says cryptocurrency and investment migration programs perfectly complement one another since the latter allows for “further access to self-sovereignty, freedom of travel and most importantly, access to becoming a global citizen.”
He says Portugal does not tax cryptocurrency gains, and that it is a huge incentive for cryptocurrency investors to obtain residency in Portugal through its Golden Visa program.
“As Bitcoin's price keeps rising, investment migration destinations become more and more attractive to HODLers,” says Jessica Hodlr, COO of Plan B Passport. [HODL is a term originating from a misspelling of "hold” in a 2013 post by a Bitcoin trader, related to buying and holding Bitcoin and other cryptocurrencies]
She says there are a few reasons investment migration destinations are becoming more attractive.
“Firstly, the philosophy behind "flag theory" and Bitcoin are extremely aligned,” says Hodlr, referring to a concept that means internationalizing your wealth and all parts of your life.
“Bitcoin investors highly value individual's freedoms and lack of dependency on anyone else, especially governments. A second citizenship allows them to decrease their involuntary dependency on their home country by "decentralizing" themselves and their family.”
Another reason is the tax regime. She says governments worldwide are publicly against Bitcoin and what it offers people, “however, once it goes up, they want to make sure to get a cut of the profits even though they were against it in the first place, even so much as to say that unrealized capital gains could be taxed.”
Hodlr says individuals don’t need to share future gains when they can just go to a different jurisdiction that offers zero capital gains tax, such as Portugal that offers 0% capital gains tax on Bitcoin.
“We are actively seeing more countries adopting this such as the Central African Republic,” says Hodlr. “The sovereign individual thesis is playing out in real time and we'll see more and more governments start to compete for us.”
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