As regulatory landscapes evolve, jurisdictions that once attracted crypto enterprises may no longer offer optimal conditions. However, some countries present more accessible licensing processes and favorable tax environments. 

Andrii Danchenko, CEO of the legal firm Inexis, shares his top five recommended countries for crypto businesses in 2025.

Top 5 Crypto-Friendly Countries in 2025

1. UAE: A Prestige Symbol for Crypto Startups

The United Arab Emirates (UAE) was among the first jurisdictions to develop a regulatory framework for virtual assets. Aiming to become a leading crypto hub, the UAE offers clear regulations across its regions, attracting numerous crypto startups.

However, it is not only startups that choose the UAE – in 2023, the exchange Bybit became one of the first crypto businesses to receive a license from the Dubai Virtual Assets Regulatory Authority (VARA) and relocated its headquarters to Dubai. Binance has also actively pursued licensing in free economic zones like ADGM (Abu Dhabi Global Market) and DMCC (Dubai Multi Commodities Centre).

Advantages of the UAE as a Jurisdiction:

• Tax-Free Regime: Free Zones in the UAE allow companies to avoid corporate taxes, and individuals are exempt from income tax, making it particularly attractive for crypto companies seeking to reduce tax burdens.
  
• Swift Registration and Prestige: Company registration in DMCC or ADGM Free Zones can take from a few days to several weeks.
  
• Innovation-Friendly Environment: Regulators support blockchain, DeFi, and digital assets, including the development of the national cryptocurrency, Digital Dirham.
  

One of the cases we worked with:

A crypto trader from the Web3 community, he initially planned to open a company in Lithuania. However, after the first consultation, he realised that the Lithuanian regulator had tightened its capital and internal compliance requirements.

He did not have a ready-made structure to comply with the new rules and did not want to invest in an office and compliance team. Therefore, we decided on the ADGM free zone in the UAE, where for a similar budget he received a more prestigious jurisdiction, easier access to the MENA market and the possibility of further obtaining a residence permit. The company is already operating, undergoing an audit, and plans to gain access to the Saudi market.

Considerations:

If you are also considering the UAE, please note that you will need an office (at least a virtual one) to register in the ADGM and DMCC zones. Often, a local director or authorised representative is also required. UAE banks are cautious about crypto companies – you can often only open accounts with payment institutions, not banks. Financial monitoring compliance checks are strict. This can be a challenge for small crypto businesses.

Registration of a licence (VASP or Fintech) in the Emirates will cost from $5,000. From the first year, an office, a compliance officer, and an audit are required.

In addition, starting from 2023, companies related to virtual assets will have to obtain VASPs licences (Virtual Asset Service Provider licences) even in those free zones that previously allowed them to operate without them.

2. Singapore: High-Level Regulations for DeFi, Tokens, and Investors

Singapore has one of the most transparent and progressive digital asset regulatory regimes. The country hosts dozens of accelerators and funds and offers legal support for Web3 and Fintech projects. A license from MAS (Monetary Authority of Singapore) gives a company an impeccable reputation among investors and banks. In Singapore, you do not pay taxes on profits from your investments in cryptocurrencies and other digital assets if you are not engaged in active trading.

Since 2020, cryptocurrencies have also been exempt from Goods and Services Tax (GST) because the government recognized them as digital payment means.

Singapore is suitable for DeFi/DEX projects and those interested in entering the Asian market or cooperating with major funds and marketplaces. Major players licensed in Singapore include Crypto.com and Ripple.

What to consider:

But it’s not all simple — Singapore has a lengthy licensing procedure. Obtaining an MPI (Major Payment Institution) License or registering as a DPT provider (Digital Payment Token) can take 6–12 months, including due diligence on the founders and AML (Anti-Money Laundering) system checks.

Crypto companies in Singapore are required to report transactions, maintain internal compliance, and undergo audits and inspections. Besides registration, a company must have a local office, a Singapore-resident director, and a compliance officer. Therefore, your starting budget should be at least $100,000.

We also have clients who obtained licenses in Singapore:

One of them, an international business with a blockchain wallet and custodial solution, initially considered the United Kingdom. However, after in-depth analysis, the company realized that the UK’s Financial Conduct Authority (FCA) had too strict a policy on digital asset custody, so their chances of obtaining a license were low.

As a result, we chose Singapore as an alternative due to its more stable regulatory landscape, openness to innovation, and the ability to legally work with tokenized assets. The company partnered with a local bank and received venture capital funding.

3. Flexible Start in the EU: Cyprus

An EU jurisdiction offering flexible conditions for cryptocurrency business is a good option for those who want to operate under European regulation without strict initial pressure. However, gradual adaptation to MiCA (legislative norms regulating crypto business in the EU) means that companies that already obtained a license may face re-certification and new costs starting in 2025.

Cases:

Cyprus has low taxation — 12.5% corporate income tax — and a simple CASP (Crypto-Asset Services Provider) registration procedure. One of our clients — a mid-sized crypto exchange — received CASP registration in less than four months. Success came from a well-prepared compliance profile and hiring a local director with financial experience. A local director is not mandatory for the license, but a local compliance officer is required.

Another client provides cryptocurrency exchange and token management services. Initially, they considered Portugal but faced difficulties opening a bank account. We recommended Cyprus and are supporting them in document preparation and interactions with CySEC, while also preparing a request to open an account with a crypto-friendly European payment provider.

Key points to consider:

• Hiring a compliance officer with experience in regulated financial institutions;
  
• Creating AML/CTF policies in line with CySEC requirements;
  
• Structuring the business to allow for scaling into other EU markets.
  

Without CASP registration, crypto activity in Cyprus is prohibited even in test mode. Licensing costs start from €15,000 for document preparation and submission, with required capital from €125,000.

4. Lithuania — A Gateway to MiCA

Until December 30, 2024, Lithuania had a simplified registration procedure for virtual asset service providers (VASPs), and it remains popular among crypto companies from Eastern Europe and Asia seeking to operate in the EU.

However, with the MiCA Regulation taking effect, companies wishing to provide crypto asset services must obtain a license. Lithuania set a transition period to adapt to MiCA requirements — until June 1, 2025. During this time, companies that already had registration can operate under the old rules but must obtain a license.

To do so, businesses need a real office, local staff and compliance officer, and capital of at least €125,000. The regulator began thoroughly checking the background of beneficiaries, business models, sources of funds, and AML policies. If anything raises concern, the license can be denied or its review suspended.

5. Portugal: Opportunities for Free Transactions and Residency

Portugal used to be a crypto haven. Although conditions are now stricter due to MiCA integration, the country still supports crypto innovation. Because of this, crypto business owners choose Portugal as a place to live. For example, our client living in Portugal decided to move their product (a crypto wallet with P2P exchange functionality) here from Estonia.

Main advantages of the jurisdiction:

• In Portugal, unlike many EU countries, you can open a bank account for a crypto company — provided you meet requirements and register as a VASP. Although the process may include thorough checks (especially AML/CFT), some banks, such as BiG and Montepio, are ready to work with crypto businesses.
• Profit from the sale of digital assets is taxed at 28% if the asset was held for less than one year. However, profits are tax-exempt if the asset was held for more than one year.

What to consider:

Competition for registration is high, and every application in Portugal is carefully reviewed. Successful registration requires a well-prepared case and often the involvement of local consultants.

Since 2024, Portugal’s central bank, Banco de Portugal, has tightened requirements for companies seeking to operate with virtual assets. Applicants must submit:

• a detailed business plan,
  
• the company’s organizational structure,
  
• compliance and AML policies,
  
• information on beneficiaries and directors (including proof of integrity),
  
• confirmation of company registration in Portugal and tax residency.
  

To obtain CASP* status in Portugal, a company must have a legal entity with a physical office in the country, local GAAP-compliant accounting, and at least one resident director. Additionally, robust AML procedures must be implemented, including the appointment of a compliance officer. The licensing process takes approximately 6–12 months.

*Under the MiCA Regulation, which came into force on December 30, 2024, the term “VASP” is gradually being replaced by “CASP” (Crypto-Asset Service Provider). However, Banco de Portugal may still use “VASP” in official documents—both refer to the same category of virtual asset service providers.

As of 2025, even in crypto-friendly jurisdictions like the UAE or Lithuania, operating without a license has become virtually impossible. When choosing a jurisdiction for your crypto business, consider whether you can meet the licensing requirements and secure access to banking and payment services. It’s also important to evaluate the country’s digital infrastructure and think long-term—will your business be able to scale and grow in this environment.