Foreign investors exempt from paying taxes in El Salvador; 3 Bitcoins for permanent residency

Key Takeaways

• El Salvador plans to exempt all foreing investors from possible Bitcoin (BTC) gains in a bid to attract investments
• The country became the first nation to make BTC a legal tender
• In addition, El Salvado plans to grant permanant residency to foreigners investing at least 3 Bitcoins in the country

YEREVAN (CoinChapter.com) — Foreign investors in El Salvador will be exempt from paying taxes on profits from Bitcoin (BTC), as per a government adviser.

Javier Argueta, the legal adviser to President Nayib Bukele, confirmed the news on the government’s behalf.

“There will be no taxes to pay on either the capital increase or the income,” 

AFP news quoted Argueta.

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Attracting foreign investments in El Salvador

Last week El Salvador became the first country to adopt Bitcoin as legal tender. Earlier in June, Nayib Bukele, the country’s president, announced his government would give $30 worth of Bitcoin (BTC) to every adult citizen in the country. El Salvador even came up with Chivo, the official cryptocurrency wallet issued by his Government.

Before the announcement, the President had sent the Bitcoin Law to the nation’s Congress for approval. However, the move had received disapproval from both the World Bank and the International Monetary Fund (IMF).

Many countries, including Ukraine, South Korea, the Philipines, and Thailand, compete to attract investments and become the favorite destination for cryptocurrency stakeholders.

Having made Bitcoin (BTC) legal tender, El Salvador hopes not to be left behind. Hence, Bukele’s Government is taking the next step to catch the fancy of international investors but making Bitcoin tax-free for them.

“If a person has assets in Bitcoin and makes high profits, there will be no tax. This (is done) obviously to encourage foreign investment,”

 the legal advisor to the president, Argueta said.

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Invest in Bitcoin, get permanent residency in El Salvador

In June, President Bukele said his Government was planning to introduce a new law that would give foreign investors and ex-pats the option to gain permanent residency in the Central American country.

To qualify, any foreigner could make a minimum investment of 3 Bitcoins (BTC), which is a little less than $143,000 today. The Bitcoin permanent residency would then enable them to buy real estate or make any other investment in the country.

BTC currently trades a little over $46,000.

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Chivo wallet still down

After El Salvador made Bitcoin legal tender, the country’s official BTC wallet Chivo was crushed. The app was overwhelmed by the traffic and surge in usage, prompting the Government to discontinue the service. 

The country’s president event went on record to confirm the news, informing industry watchers that they were working to fix it. 

A week from that incident, the wallet is yet to be fully functional. Today, President Bukele informed citizens on Twitter that Chivo had been fixed 95%, but the 200 ATMs and 51 Chivo points are fully available.  

The Government has made it mandatory for businesses to use the Chivo app to accept payments in Bitcoin. Failing to do so will result in them facing charges under the country’s consumer protection law.

Met with protests from citizens opposing the country’s Bitcoin policy, President Bukele has gambled his political career, and perhaps his country’s future, on BTC. 

While Cardano Chief Charles Hoskinson thinks other counties will follow, only time will show if Bukele was right.