The Greenfield cryptocurrency investment firm recently ranked Lisbon as the premier crypto hub globally, surpassing the likes of New York, Berlin and Singapore. This is due to the city's high quality of life combined with tax regulations that are friendly to digital currencies and the rising number of expats arriving there.
In Lisbon, Portugal, a neo-Moorish bullring known as Campo Pequeno is where matadors and bitcoin maximalists alike are regular visitors. Both are defiant and eager to challenge the norm, whether it be the laws of nature or the financial establishment. Every month, a diverse group of expat digital nomads arrive at the 19th century arena to not only sip Licor Beirão, but discuss the potential of decentralized ledger technology and a world powered by bitcoin. To the avid bitcoiners, the bullring symbolizes the 'bull run' they are hoping to see during the current crypto winter, a term for the long period of decreased pricing of digital assets.
Software engineer Lorenzo Primiterra has been attending gatherings since they first began. With his black chipped nail polish and small black hoop earrings, combined with the tattoo of 'WHAT'S MY AGE AGAIN?' in all caps on his right inner forearm, he appears to be a Peter Pan-type. Primiterra hails from Italy and spent two of the past seven years travelling in Portugal. Sitting at a picnic table near the 10,000-person capacity arena, he revealed to CNBC that the initial bitcoin gathering was held in that same venue in spring 2022, shortly after the collapse of Terra Luna - a well-known, U.S. dollar-pegged stablecoin project that went bankrupt in one night, wiping out a market cap of half a trillion dollars. "A lot of people got burned," Primiterra commented on the stablecoin's downfall. "That's when many people became bitcoiners. They understood the necessity of owning bitcoin, on the bitcoin blockchain especially, and not on other chains."The chain of crypto bankruptcies, unfeasible tokens and the disclosure that some of the major players in the industry were running ostensibly illegal activities, revealed to many that bitcoin is king.However, Lisbon is still not very fond of blockchain. Every night during the week, there's some sort of industry meet up - regular events such as Web3 Wednesdays and Crypto Fridays at The Block - a famous club where industry buffs can rent out co-working space. The city also hosts major industry conferences such as Web Summit and NearCon. Primiterra recollects, "Two years ago, there should have been an ethereum event here, then solana organised another event and then they said, 'Let's do a blockchain week' and it turned into a blockchain month." He continued, "During the bull market, I visited other blockchain events since they were all providing drinks, and I was like, 'Why not?' "
According tothe recently released State of European Crypto Report, Lisbon has been named the most important crypto hub on theplanet by Greenfield, an investment firm specialized in crypto. This is due to the city's "profound DeFi scene", attractive tax incentives and the newly launched digital nomad visa. Primiterra, a digital nomad that has traveled extensively across the globe, has decided to make Lisbon his home during the pandemic, citing the city's appealing cost of living and the tech-minded community as two big factors that sealed the deal. Primiterra is passionate about tech and has some side projects, such as launching a co-working space dedicated to bitcoin.
Taking a promenade in Portugal's capital city can make one feel like they are walking in San Francisco. Hills filled with kite surfers and sailboats line the shore, while a two-towered suspension bridge signifies the outer boundaries. Antique trams fill the streets with a vivid hue.What is also true is the fact that these two coastal cities attract techies, like Jemson Chan from Singapore. After being in Portugal for nine months, Chan is currently working for a company that is unrelated to crypto, but his fervor lies in bitcoin and decentralized tech.“The quality of life, thriving tech startups and a burgeoning tech scene are what brought me to Lisbon,” stated Chan.
Guy Young, the CEO and founder of crypto startup Ethena Labs, cites Lisbon's pleasant atmosphere as a major motivator for settling there, citing the city's picturesque architecture, vibrant history, delicious cuisine, good weather, and tight-knit crypto community. Young's opinion is widely shared, as Portugal was named sixth in the Global Peace Index in 2022 and is the #1 place for expatriates. The number of people from foreign countries in Portugal has noticeably risen over the last 10 years, with an overall 40% increase in the last decade. Portugal is also especially attractive due to MiCA, a law established by the European Union providing a common regulatory framework for digital assets, making it fairly straightforward to run cryptocurrency-related businesses or invest in cryptocurrencies.
Chan, who hosts a podcast to teach others about bitcoin, finds Portugal preferable to the U.S. due to the latter's enforcement-based policies such as those employed by the Securities and Exchange Commission. He also mentions grassroots-level platforms like Pocket Bitcoin, RoboSats, Bisque and Peach that allow users to buy and sell bitcoin. Primiterra, who previously worked to measure global internet censorship and volunteered for the Tor project, devotes his time to Bitcoin Map - an open-source tool permitting one to search for merchants that accept bitcoin anywhere in the world. Though Lisbon is crypto-friendly, there aren't many businesses there that use bitcoin as a payment option - the few that do include a ramen place and a dentist.
Seb True relocated to Lisbon over the summer, having originally traveled to Portugal to give a presentation at the monthly bitcoin gathering. He quit his job to focus on traveling the world and teaching people about bitcoin from a libertarian perspective. He has named his educational modules 'The Bitcoin Student', and is looking to use his engineering background to expand the brand. True had previously held underground workshops in Egypt, where bitcoin is illegal, but was undeterred by the risks. He felt that teaching people about decentralized virtual money that existed outside the control of governments and central banks would be highly beneficial, as the nation had experienced 50% inflation in the same year. True found that many people initially thought bitcoin would not help them, as it was 'controlled' by someone, but he was able to convince them otherwise. Now, True is focusing his attention on Portugal and particularly Lisbon, which he sees as the ideal place to grow his enterprise. He is impressed by the passionate community that is interested in collaborating and contributing to his mission for no money or fame, but simply because they believe in it.
Chan carefully examined the tax laws of the European Union before settling down to move from Asia, eventually narrowing down two jurisdictions - Switzerland and Portugal - to choose from. He commented,“If you know anything about Switzerland, it's a millionaires' and billionaires' paradise. Looking at me, I don't think I've achieved that level of success yet, so I chose the poor man's Switzerland.”The resident-non-habitual (NHR) status of Portugal is a highly attractive trait, offering taxation exemption on income up to a period of 10 years in certain cases.In contrast to the United States' stance of viewing cryptocurrencies as property, Portugal recognizes them as a form of payment. This differentiation is highly beneficial tax-wise. For a brief period until December 2022, capital gains through cashing out and crypto-to-crypto trades weren’t taxable. The government has subsequently made some modifications on the cryptocurrency tax reliefs, including an obligation to hold on to digital currency for over a year in order to avoid taxes on sales. This implies that gains from fiat and cryptocurrency trading aren’t taxed if the trader holds on to their coins for over 12 months; conversely, profits made on crypto held for shorter than 1 year is taxed at 28%. Shehan Chandrasekera, a CPA and head of tax strategy at CoinTracker.io, noted, “This makes Portugal a really attractive place for crypto users to live.” An exception exists for those companies registered in Portugal which deal with crypto, having to face taxes in certain situations such as earning cryptocurrency through services provided in Portugal.
Expats explain to CNBC that the process of settling in Portugal is relatively easy. There is no need to own real estate, and, unlike some other crypto havens, like Puerto Rico, foreigners do not have to remain in the country for a certain number of days.
Members of the European Union have the right to permanent residence in Portugal. For non-EU citizens, the nation offers multiple options for residency, such as the golden visa and D7 visa (also known as the retirement visa or passive income visa). These visas mainly attract wealthy foreigners.
The Portuguese golden visa is issued to those who buy property or invest a certain amount of capital in the country. Further steps include acquiring a tax ID number, opening a bank account, and officially applying for residency. Organizations like Plan B Passport facilitate the application process for expats.
Katie Ananina, the CEO of Plan B, reports that the firm has aided numerous people from the U.S., the U.K., Australia and Canada to obtain a secondary passport in one of seven countries, with Portugal being one of them. Plan B works in tandem with the government's residence- or citizenship-by-investment programs.
One downside to Lisbon's rising popularity is the complaints of the longer-term inhabitants regarding the increasing prices. This is something comparable to other tech hubs across the globe. Young from Ethena mentions, "Recently, there has been a great influx of foreigners. The locals have pushed back in regard to property prices and certain restaurant costs. As a foreigner who has come here, however, I am content."
Wout Deley, who has had an interest in cryptocurrencies and the tech behind them since 2013, was working as an international sales manager for an organization based in Ghent, Belgium when he sold his house, invested the proceeds in tokens and began a journey across Europe during the start of the Covid pandemic, ending in Portugal. He put two-thirds of the money into crypto and lived off the other third. At any time, Deley has about 10,000 euros in his bank; the rest is in crypto. He decided to establish residency in Portugal as they have more favorable taxation for profiting from tokens, as opposed to the 40% he'd have been liable for in Belgium. As he puts it: "You want to double your profit? Just move to Portugal."
Deley resides in Lagos, Portugal, situated on the southwest tip of the Iberian Peninsula. He describes discovering a villa with a remarkably low long-term rental rate as sufficient to formally take up residency in the area. According to Deley, the climate is comparable to Los Angeles, providing sunny skies and excellent surfing, yet without the constant congestion of traffic. There is also a vibrant social scene comprised primarily of expatriates. He has learned of at least fifteen people, a majority of them from the U.K., who are relocating to Portugal to take advantage of the crypto-tax advantages. Deley does not possess fluency in the language, however, finds little difficulty due to the widespread command of English. People in the vicinity share a keen interest in cryptocurrenty, with nearly everyone being knowledgeable on even the most technical aspects of bitcoin. Deley relates the migration of crypto investors as being beneficial for Portugal, since it acts to counter the outward movement of the younger generation. Didi Taihuttu of the 'Bitcoin Family' has further proposed the notion of a crypto village to disrupt the traditional expat lifestyle. They are currently in the process of choosing from three potential areas of land, one with an area of 250,000 acres, situated in the Algarve. It has been proposed that the land would be split and sold as non-fungible tokens (NFTs) in order to designate ownership. Taihuttu additionally wishes to exploit solar and wind energy to mine for bitcoin and apply the advanced heat generated from the rigs to warm homes in the winter. The plan is to use a Decentralized Autonomous Organization (DAO) to oversee the management of the village. Meanwhile, the Taihuttus have adopted a former inn and are adapting it to become the first web3 hotel in the Algarve, which would be sustained by the collective community.
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