Hong Kong vs Luxembourg
Crypto regulation comparison
Hong Kong
Luxembourg
Legal
Legal
Hong Kong has positioned itself as a major crypto hub in Asia with a comprehensive licensing regime. The SFC implemented a mandatory licensing framework for virtual asset trading platforms (VATPs) effective June 2023. Hong Kong has no capital gains tax, making it attractive for crypto investors and businesses.
Luxembourg is a major European hub for crypto and blockchain financial services. The CSSF regulates VASPs and crypto-related investment funds. Crypto held for more than 6 months is generally exempt from capital gains tax for individuals, making it attractive for long-term holders. Luxembourg hosts several prominent crypto exchanges and fund administrators.
Tax Type
No tax
Tax Type
Capital gains
Tax Rate
0%
Tax Rate
0-42%
Exchanges
Yes
Exchanges
Yes
Mining
Yes
Mining
Yes
Regulator
SFC (Securities and Futures Commission), HKMA
Regulator
CSSF (Commission de Surveillance du Secteur Financier)
Stablecoin Rules
HKMA developing a licensing regime for stablecoin issuers under a 2024 bill
Stablecoin Rules
Regulated under EU MiCA framework; Luxembourg hosts major stablecoin issuers
Key Points
- Mandatory VATP licensing regime under the AMLO effective June 1, 2023
- No capital gains tax in Hong Kong; profits tax applies only to business profits
- SFC approved spot Bitcoin and Ether ETFs for retail investors in April 2024
- HKMA consulting on stablecoin issuer licensing under a dedicated bill
- Hong Kong actively competes with Singapore as Asia's leading crypto hub
Key Points
- CSSF oversees VASPs under the Luxembourg AML/CFT framework
- Individuals holding crypto for 6+ months are generally exempt from capital gains tax
- Short-term gains taxed at progressive income tax rates up to 42%
- Major hub for crypto investment funds and blockchain companies
- MiCA framework fully applicable from December 2024