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Different jurisdictions have different approaches towards regulation of crypto industry: some ban digital assets, some take harsh measures, some show a warm welcome to this sphere. Let us investigate the cases of the U. S., Germany and Georgia and see whose approach is the most profitable for entrepreneurs.
The U. S. The United States Department of the Treasury recognized bitcoin a virtual currency as far back as 2013. The same year, there happened an incident in Texas court followed by judge’s decision to approve cryptocurrency as a form of money. According to English law prevailing in the U. S., such claim has in fact the force of a law. Notwithstanding, no crypto regulations have been introduced in the U. S.
In spite the lack of the special legislation, the United States Securities and Exchange Commission still checks whether ICO projects comply with Fraud Act and Anti Money Laundering Law. What is more, tax services recognize cryptocurrency as property and oblige to add them to tax declarations of both legal and private bodies.
Germany. In the same 2013, Germany in fact legalized bitcoin having entitled it digital currency. However, the authorities didn’t adopt this crypto cash as e-money or foreign currency.
German government now regards cryptocurrency as a financial tool or a financial accounting unit. No clearly stated crypto laws have been developed in Germany. However, regulations imposed by the tax services are operating. Their representatives see cryptocurrency as revenue so that all related transactions should be taxed.
In terms of ICO, all German-based organizations working with crypto operations are equated to financial companies. Consequently, they are obliged to get a license, hold authorized capital and report to the Federal Financial Supervisory Authority of Germany.
Establish your business in less than an hour. There is no crypto and token regulation in the country. Besides, Georgian authorities show a warm welcome to not only crypto business but a business of any kind.
Thus, according to Law of Georgia on Entrepreneurs, foreign citizens have the same right to open own business as country’s citizens. They pass the registration at the National Agency of Public Registry under the Ministry of Justice of Georgia. Moreover, foreign citizens have to be registered on the territory of Georgia – buy or rent real estate.
What is important, state and tax registration can be passed within a single-window system. Requirements for the authorized capital are not provided. Besides, an entrepreneur is not obliged to report on their capital to the state (banks appear an exception).
This model allows to launch a business in an hour. Just come to the Public Service Hall of Georgia, fill in the needed forms and pay taxes. Urgent document processing costs about $21.
In most cases, entrepreneurs establish a private limited company – the most convenient option. Thus, they report to investors on the property owned by the company only.
Taxes? Never heard of it. VAT rate in Georgia is 18%, corporate tax – 15%, income tax – 20%. Legal bodies have an opportunity to use preferential tax treatment. Thus, having opened an international financial company (for instance, you conduct ICO), there is no need to pay corporate tax and tax on income from securities. Dividend tax will be 5% only. All these procedures aren’t followed by licensing. There is no special tax on crypto or tokens in Georgia.
Private entrepreneurs can also leverage preferential tax treatment. Having yearly income less than $12 000, they are free of taxes at all. If it surges over $12 000 and reaches $42 000, 5% of the revenue is to be paid.
Apart from preferential tax treatment, there are both state-owned and private programs for business support in Georgia. For example, within three recent years, the co-funding amount of business projects was estimated at $9.5 m with the project’s cost narrowing at $12.
Peculiarities of crypto business establishing, ICO launching and crypto payment in entrepreneurship will be covered within the special discussion at Blockchain & Bitcoin Conference Georgia.
Representatives of Georgian government and companies’ chief executives who in fact initiated blockchain development across the country will deliver presentations at the conference. They are Association Blockchain Georgia, Bitcoin Embassy Georgia and Blockchain Systems Institute.
Find out more about the conference program.
Register to Blockchain & Bitcoin Conference Georgia and get to know how to launch own crypto business in Georgia.