Favorable Jurisdictions

When choosing where to base your business or your financial affairs, you must carefully consider the relevant legal jurisdiction. When it comes to international digital currency, three elements are crucial: taxation, digital currency friendliness, and privacy.

The majority of nations (95%+) use what is known as a territorial tax regime to tax their citizens. A worldwide tax regime, on the other hand, is used by only a few countries (including the United States). Worldwide tax regimes levy an income tax on a citizen's worldwide income, no matter where it's earned. A territorial tax regime, on the other hand, imposes an income tax only on income earned within the jurisdiction.

Worldwide, countries have different digital currency environments, depending on whether they favor or prohibit digital currencies.  For example, it is (currently) against the law in the People’s Republic of China to own digital currency … though many of its citizens continue to own cryptocurrency in secret.  It is conjectured that the Chinese government banned digital money as a result of their creation of a centrally controlled digital currency, which they strongly desire Chinese people to use in lieu of Bitcoin or other digital currencies. So far, most Chinese citizens who own digital currency have not taken the bait.

In the context of digital currency, privacy laws are important to the owners of digital currency for obvious reasons.  A clear example of a country that has strong privacy laws is Malta, which has gone to great lengths to not only be friendly to digital currency and digital currency projects but has also (for a number of decades) been a reliably private place to store one’s wealth (unlike Switzerland in the past decade).  Malta would be a jurisdictional top three choice for digital currency, but for one flaw … it is one of the few worldwide tax regimes.

Choosing the right jurisdiction for digital currency activities is vitally important. Rivflow believes that the combination of a Hong Kong-based corporate headquarters and a Singapore-based custody solution accomplishes all three goals: a favorable digital currency environment, tax advantageous jurisdiction, and strong privacy laws.