Sectoral migrations in the crypto space aren't a new phenomenon. As one nation comes down firmly on the crypto and web 3.0 sector, participants from that sector move to another place. Recently, several Japanese Web 3.0 companies were reportedly shifting to or setting up new offices in Singapore.
The heavy taxation on purchasing crypto tokens is one of the primary reasons for the shift. As Director of Matsubara Oasys, Daiki Moriyama states that the Japanese crypto regulations have pushed them towards operating from Singapore. Some firms have even adopted a hybrid operation mode.
Japan deducts 55% of the gains made on crypto and 35% on token issuers. Evidently, the gains have been at an all-time low amongst Japanese investors, probing them to look for alternatives. Furthermore, a dynamic crypto market with unpredictable bull and bear markets has made profit-maximizing difficult for most traders. Reports claim that the high taxation rates seldom allow them to make up for their profits at times of market boom.
Singapore levies relatively low taxes on the gains and hence serves to be a better business opportunity for most investors. According to Singaporean law, individual gains earned from the rise in crypto prices are not taxable. Thus, individuals involved in buying or making profits from such a scenario are exempted from paying a huge chunk of their earnings. However, the law holds profits earned from trading virtual assets taxable. Thus, the choice of operating from Singapore, or setting up offices in the city, is an obvious choice for most crypto traders. The city also offers a similar time zone, sharing proximity with Japan.
News agencies report that the number of Japanese web 3.0 companies likely to shift to Singapore is expected to rise to 100 in 2022, owing to the city's benefits.