Kuwait offers low-cost haven for Bitcoin miners
With Bitcoin prices having fallen by more than half this year, the costs of mining for the cryptocurrency have come into sharp focus, and Kuwait has become a haven in a world of rising energy prices.
According to a graphic produced by Visual Capitalist, Kuwait has come out as the cheapest place in the world at present to mine Bitcoin due to heavily subsidised electricity and low taxation, especially for individual investors.
The cost of mining one bitcoin in the Gulf State is about $1,393.95, compared with $4,181.86 in Angola, which was placed as the second-cheapest destination.
With the Bitcoin price standing at EUR21,193.47 ($21,200) on Monday, that creates potential profit of more than $19000 per coin. By way of comparison, Venezuela is the most expensive as energy prices have soared taking costs to $246,530.74 per coin, making mining a loss-making proposition, according to the graphic.
Kuwait has a complicated relationship with cryptocurrencies, but unlike many of its Middle Eastern neighbours, it has not yet banned cryptocurrency mining. However, the government does not recognise Bitcoin, or other cryptocurrencies, as legal tender and financial institutions are not able to handle transactions.
Kuwait doesn’t levy tax on income generated by individuals, but will tax a corporate entity involved in Bitcoin mining at a flat rate of 15 percent for locally owned companies, or those involving Gulf Cooperation Council states.
GCC companies with foreign ownership are subject to taxation to the extent of the foreign ownership, accounting and consultancy firm PwC says.
While economies worldwide are struggling under the burden of rising energy prices, the oil-rich nation still enjoys amongst the lowest electricity prices in the world.
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