Saint Kitts and Nevis Financial Services Regulatory Commission have established the new Virtual Asset Bill 2020 within the Federation of islands. The bill was created to apply regulatory frameworks to cryptocurrencies used in the region.
The two islands represent a Commonwealth realm and the country’s decision follows a similar bill enacted in Antigua in 2018.
The island country of Saint Kitts and Nevis, located in the West Indies, recently passed a bill that legalizes digital currency assets like bitcoin cash.
The act is cited as the Virtual Asset Bill 2020 and it aims to provide the regulation of cryptocurrencies for Saint Kitts and Nevis businesses and residents.
Federation of Saint Kitts and Nevis Passes Virtual Asset Bill 2020
Prime Minister Dr. Timothy Harris told regional press that the new bill will “ensure that each provider participating in virtual asset services in the Federation are subjected to registration and the supervisory regime.”
“This would allow for compliance with the existing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) legislative framework in St. Kitts and Nevis and by extension, comply with the related international standards set out by the Financial Action Task Force (FATF)”, Harris added. Under the Federation of Saint Kitts and Nevis’s latest bill residents and business are legally allowed to:
- Exchange between a virtual asset and fiat currency;
- Exchange between one or more forms of virtual assets;
- Transfer of a virtual asset whether or not for value;
- Safekeeping or administration of a virtual asset or instruments enabling control over a virtual asset; and
- Participation in and provision of financial services related to an issue or sale of a virtual asset;
Tax-Friendly Saint Kitts and Nevis a Popular Region for Dual Citizenship
As news.Bitcoin.com reported in December 2019, Saint Kitts and Nevis is a popular choice for those looking for a second passport. The Federation is one of the most well known regions worldwide for obtaining dual citizenship. Saint Kitts and Nevis Citizenship by Investment Program was established in 1984 and it gives citizenship either through donation or a real estate investment. Just like the new Virtual Asset Bill 2020, the country’s tax laws are pretty lenient compared to places like the U.S. or other countries in Europe. For instance, unless you try to sell an asset within one year of acquisition, no capital gains tax is levied in the Federation. If you do happen to sell before the one-year holding period, then the assets are subject to a 20% capital gains tax.
“Capital gains tax is levied only if the asset is sold within 12 months from the date of acquisition (tax rate is 20%)”, explains the website migronis-citizenship.com.
After the Federation Virtual Asset Bill 2020 passed, the website citizenshipbyinvestment.ch wrote that “virtual currency payments provide the cheapest alternative solution to banking fee and correspondent banking issues faced by the Caribbean.” The website also spoke with Bitcoin.com’s Executive Chairman Roger Ver. The entrepreneur acquired citizenship through the Federation’s program in 2014 after renouncing his U.S. citizenship. “The big benefit is in addition to being able to pay someone from across the cash register table or across the room, you can pay people across the planet”, Ver explained. The Bitcoin.com executive added:
As you know, many of the cars in St. Kitts are bought from Japan, by using a virtual currency you can pay from here to Japan instantly for a tenth of a penny, whereas with the bank wire transfers will cost you a bunch of money and take at least several days.
The Federation’s capital gains guidelines also apply to all types of assets like gifts and inheritance. People researching the friendlier tax laws in Saint Kitts and Nevis will recognize the system of taxation is one of the most lenient worldwide. With friendly capital gains tax laws and the latest bill that legalizes cryptocurrency assets like bitcoin cash (BCH), the Federation of Saint Kitts and Nevis might look even more tempting to those searching for dual citizenship.