Why Portugal Is Becoming The Latest Destination For Blockchain And Crypto Investments

Why Portugal Is Becoming The Latest Destination For Blockchain And Crypto Investments

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By Hernaldo Turrillo

Portugal's thriving tech ecosystem is increasingly embracing blockchain and distributed ledger technology (DLT). Blockchain and crypto saw the most investment in the Portuguese fintech market in 2022. The country is home to innovative startups and organisations, and has so far been the host of many blockchain-related events, conferences, and research initiatives. What makes Portugal attract a large number of global investors in blockchain and crypto?

Why Portugal Is Becoming The Latest Destination For Blockchain And Crypto Investments

Portugal, a nation renowned for its rich history, stunning landscapes, and warm hospitality, is increasingly making waves in the world of cryptocurrency and blockchain technology. As global interest in digital assets and blockchain innovation surges, Portugal has positioned itself as a favourable destination for global investors.

The country is home to innovative startups and organizations exploring the potential applications of blockchain beyond cryptocurrencies. Various blockchain-related events, conferences, and research initiatives contribute to a vibrant and collaborative ecosystem.

Portugal has positioned itself as a highly favorable destination for crypto enthusiasts and blockchain enthusiasts alike. In October 2021, Lisbon proudly hosted an Ethereum conference, reflecting the country's strong commitment to the world of cryptocurrencies and blockchain technology. Furthermore, Portugal is wholeheartedly embracing the global trend of Non-Fungible Tokens (NFTs), having even hosted Europe's pioneering crypto art festival, Rare Effect, in May 2021.

In recent years, Portugal has witnessed a surge in the presence of crypto companies, which is reshaping the way the Portuguese perceive and engage with the cryptocurrency industry. Notably, Criptoloja made history by becoming the first crypto exchange to receive licensing from Portugal's central bank, allowing it to operate within the country, a milestone achieved in October 2021. As a result, Criptoloja now empowers individuals to conveniently purchase over 90 different cryptocurrencies using euros, greatly simplifying access to the world of digital assets.

Portugal is one of the top places that supports activities related to crypto and blockchain, owing to its favourable tax regulations and innovative products like the crypto visa card.

Let's explore the overall crypto and blockchain scenario in Portugal that makes it an attractive choice for global investors seeking opportunities in this rapidly evolving sector.

Clarity and stability of regulations for blockchain and crypto investments in Portugal

While many countries grapple with the challenge of regulating digital currencies and blockchain technology, Portugal has taken a proactive approach. In 2020, the Portuguese Tax Authority issued comprehensive guidelines, shedding light on how cryptocurrencies are treated for tax purposes. These guidelines clarified that cryptocurrency transactions are exempt from Value Added Tax (VAT) and that capital gains from crypto investments are not subject to income tax.

This regulatory clarity provides a solid foundation for global investors, reducing uncertainty and ensuring compliance with the law. It offers a level of predictability that is essential for fostering a healthy and sustainable crypto and blockchain ecosystem.

Tax advantages for blockchain and crypto investments in Portugal

Portugal's crypto and blockchain-friendly tax policies are a significant draw for global investors. In addition to the aforementioned tax exemptions on cryptocurrency transactions and capital gains, Portugal offers an attractive tax regime known as the Non-Habitual Resident (NHR) status.

Under the NHR regime, foreign investors who become tax residents in Portugal can benefit from substantial tax advantages for up to 10 years. This includes exemption from taxation on most foreign-sourced income, which encompasses income derived from cryptocurrency investments. This tax-friendly environment minimizes the financial burden on investors and enhances the overall attractiveness of Portugal as a destination for crypto and blockchain endeavors.

Access to European and global markets

Portugal's strategic location within the European Union (EU) offers global investors easy access to a well-established and economically developed market. As part of the EU, Portugal adheres to EU regulations, providing investors with a sense of security and stability.

Moreover, Portugal's ties to Portuguese-speaking countries worldwide, particularly in Africa and South America, open up opportunities for international collaboration and expansion. This global network can be advantageous for investors looking to leverage blockchain technology for cross-border projects and partnerships.

A forward-looking approach for blockchain and crypto investments in Portugal

Portugal has demonstrated a forward-looking approach to blockchain and digital assets. Beyond cryptocurrencies, the government recognizes the transformative potential of blockchain technology across various industries, including finance, supply chain management, and healthcare. Portugal is actively encouraging research, development, and innovation in the blockchain space.

Furthermore, the Portuguese Securities Market Commission (CMVM) has shown interest in regulating cryptocurrency-related activities, such as Initial Coin Offerings (ICOs) and crypto exchanges. This regulatory engagement is essential for ensuring investor protection and market integrity, making Portugal a more secure and trustworthy environment for global investors.

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