As more countries define their stance on bitcoin and bitcoin mining, it is becoming clear which of them are ideal for bitcoin miners to relocate to. After China’s crackdown on mining, attention shifted to the growth of mining in North America. But what is often overlooked are other regions and countries that are positioning themselves favorably toward miners.
These non-North American countries stand out for their regulatory clarity, favorable tax law, and low-cost energy.
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Here are a few reasons why Sweden is an attractive location for miners.
- Sweden’s average industrial electricity cost is $0.0762/kWh.
- In 2020, the Swedish Tax Agency asserted that mining cryptocurrency is not a transaction, as there is no purchaser of the mining company’s service.
- The exchange of the mined coins into fiat currency are not transactions from a VAT tax perspective. This is advantageous for miners because unlike in the United States, Swedish miners can pay their expenses using mined bitcoin without triggering a taxable event (Read more)
A variety of factors makes Portugal another compelling place to mine.
- Although Portugal electric power rates average $0.13/kWh, miners can offset this with tax savings on the bitcoin that they mine.
- Individuals in Portugal who profit from the purchase and sale of cryptocurrency are not taxed on the capital gains.
- The exchange of cryptocurrency for other currencies is also tax free.
Georgia is known for its relatively large and steadily growing mining presence. Here are a few reasons why.
- Georgia is home to over 200,000 miners due to its lack of restrictions on cryptocurrency mining.
- Bitcoin miners in Georgia pay a 18% VAT tax
- Both exchanging bitcoin for another currency and the sale of computing (hash) from Georgia to abroad are not subject to VAT taxes.
- Commercial electricity in Georgia costs $0.06/kWh on average.
Estonia is also a popular place for bitcoin mining activity, including large agreements from Estonian companies with Bitmain and other leading mining companies. Here are a few reasons why.
- The cost of electricity is a bit high, sitting at an average of $0.1526 per kWh. But miners have found cheap alternative power sources through wind and other “green” energies.
- Under Estonian law, a bitcoin miner must register as a sole proprietor. Once registered, they can declare and deduct business expenses. In contrast, these write-offs are only allowed in the United States for miners classified as a trader business.
Some Latin American countries like Venezuela are scrutinized for their political instability, but many miners find Venezuela to be ripe with opportunities for building mining farms.
- Venezuela has one of the cheapest electricity rates in the world due to government subsidies. Electricity is priced at an average of $0.025/kWh with miners enjoying over 90% uptime.
- The Venezuelan government also recognizes bitcoin mining as a legitimate business activity and actively works to protect miner interests. Recently, the government passed a miner protection law stating that police forces cannot seize mining machines and bitcoin from farms without regulator permission.
- Headlines occasionally reporting on government seizure of mining equipment come from a lack of registration on the part of the miner, not because of an anti-mining policy from the government.
Like any other industry, miners naturally gravitate towards places where they are treated best. Bitcoin mining’s status as an economic activity has already been established. More countries will understand this and incentivize miners to relocate by issuing favorable cryptocurrency laws or offering tax and/or energy benefits.