3rd December 2023 > > Archipelago.

tl;dr

Archipelagos are fighting to attract Web3 talent.

Market Snap

Market Wrap

Perpetual futures funding rates went straight back to neutral as the liquidation of leveraged shorts helped to fuel the rally to just shy of $40k.

Curious Cryptos’ Commentary – Republic of Palau

Palau is not the easiest place to get to. A government website describes itself:

“Our island nation is an archipelago made up of about 340 islands, islets, and atolls. Eight of the islands are inhabited. Palau is the western-most island of the Micronesia region of the Pacific Ocean. It is less than 2,000 miles south of Japan, 3,815 miles southeast of India, 400 miles north of Papua New Guinea, 950 miles southeast of the Philippines, and 830 miles southwest of Guam.”

Palau has launched an exciting initiative:

https://www.palaugov.pw/dro/

This is “blockchain-native digital residency program that offers global citizens unprecedented access to economic freedoms”.

At just $248 p.a. digital residents can take up physical residence for up to 270 days per year and pay no tax. Setting up digital companies, with physical postal addresses can be done online. Crypto god Vitalik has signed up, and he is never wrong.

…

Itinerant Web3 workers who can set up base anywhere will increasingly turn to blockchain solutions to manage their residency and tax status. Tax competition is beneficial to everyone – just ask the residents of the Republic of Ireland and Lichtenstein, who enjoy the flow of tax dollars that accrue to being the two largest tax havens in the world.

Global adoption of consumption tax as the only viable means of retaining a tax base can be seen peering over the horizon.

Curious Cryptos’ Commentary – Madeira

Another archipelago – though easier to reach than Palau – Madeira also wishes to attract Web3 entrepreneurs. At the recent Madeira Blockchain 2023 conference, aggressive tax policies were announced. Rogerio Gouveia, finance secretary of the regional government of Madeira, explains:

“For companies aiming to establish a presence in the region, the foremost tax incentive is found in the Madeira free zone or the International Business Center. This area offers a preferential tax regime, capping the corporate tax rate at a competitive maximum of 5%.”

Combined with capital gains tax exemptions for tech-focussed startups based in Madeira, Ireland and Lichtenstein have their work cut out to remain competitive.