Portugal is a discreet country in the cryptosphere. Next to heavyweights like El Salvador, Switzerland or Singapore, very few people consider Portugal a major pro-Bitcoin country. However, over the past few years, the country has been behind many initiatives that are slowly but surely attracting many crypto investors.
Portugal’s position on Bitcoin has not always been so clear and supportive. Indeed, in 2016, the Portuguese tax body issued a document warning that cryptocurrency trading could generate different types of taxable returns. The situation changed in 2017 when an official source of the Minister of Finance told Dinheiro Vivo, a media specialized in finance, that:
“The sale of bitcoins is not taxable under the IRS in relation to the Portuguese tax system, namely under category E (capital) or G (gains), except when, due to its habitual nature , it constitutes a professional or commercial activity of the taxpayer, in which case it will be taxed in accordance with category B.”
More recently, Portugal’s attractiveness in the crypto space has grown even stronger, not least due to the staunchly anti-crypto stance of neighboring Spain. While many legal experts have warned that tough regulations enacted in Spain could turn the country into a “crypto wasteland”, Spanish investors continue to flock to Portugal or at least choose it as their legal place of residence. like the Bitcoin family. This famous Dutch family of five who became internationally known after selling everything they owned to invest in Bitcoin, indeed chose to settle in Portugal because of the favorable tax framework.
“You don’t pay capital gains tax or anything else in Portugal on cryptocurrencies,” said Didi Taihuttu to CNBC, referring to the country’s 0% tax.
Business Insider Spain also noted the contrast between the situation in the two countries. Two lawyers specializing in corporate and tax matters, Teresa Novo and Luisa Cinca, said that “highly qualified” people, with a background in computer science, computer engineering and/or economics, are also interested in Portugal. They would specifically look for “a country where they don’t have to pay taxes on all or part of their income.”
In recent years, Portugal has spared no effort to promote innovation with the aim of attracting investors and stimulating the economy: in 2020, Portugal established a strategy for the creation of technological free zones which focuses primarily on “capacity building and digital inclusion of people, digital transformation of businesses and digitalization of the state”.
When it comes to the crypto sector, the country’s Central Bank, Bank of Portugalpublished in 2021 a notice subjecting crypto exchanges to a licensing regime under its supervision.
Recently, Bison Bank became the first financial institution to be licensed to operate as virtual asset providers. It is licensed to offer cryptocurrency custody and trading services. Bison Bank provides wealth management, custodian and investment banking services to retail and institutional clients, according to its website. It is owned by a Chinese private equity group based in Hong Kong.
Furthermore, the Portuguese government announced the creation of a working group to develop a national blockchain strategy. This group is made up of public and private sector companies and other experts. The objective is to study how the country could use blockchain technology, as well as the clarification of regulatory conditions. The Portuguese government expects the final version of the draft strategy to be published in June 2022.
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