• Foreign investors can find tax incentives on the island to invest and live there. There are also spectacular beaches that you can enjoy during most of the year.
• Recent months have seen an increase in crypto investors, attracting people from other parts of the US.
• However, not all Puerto Ricans love the new arrivals.

In the past year, Puerto Rico and Texas have been attractive places for crypto-investors. Not only does the US protectorate have friendly laws for foreign investors but it also has beautiful beaches and sunny days throughout the year.

The fact that residents keep their US passports and won’t have to pay capital gains taxes is a big plus. It is because of this that many Americans have moved to the Caribbean to spend at least six months each year.

A warm and sunny island environment has many benefits over living elsewhere. This is why Puerto Rico is becoming a popular destination for crypto investors. They have all the infrastructure and office space needed to invest in this country.

Massive influx of crypto-investors

Bitcoin enthusiasts have prompted other members of the community, friends and family, to make similar moves. David Johnston (36-year-old American) decided to relocate to the island with his family in March last year.

“That’s where all my friends are. I don’t have one friend left in New York, and maybe the pandemic accelerated this, but every single one of them has moved to Puerto Rico,”
CNBC was informed by him.

He is a cryptocurrency investor and entrepreneur who lives in San Juan.

“Pantera Capital (a cryptocurrency fund) is on the fifth floor and then there is a co-working space on the sixth floor. DLTx, my company, took the eighth floor. NFT.com took the twelfth. All of that happened in the last 12 months,”
He stated.

According to corporate and tax attorney Giovanni Méndez around half of all his current clients are crypto asset companies or cryptocurrency investors. Over the past six year, the number of foreign clients has increased dramatically.

Investors will love these attractive laws

The Law 60, or Law of Individual Investors is one of the most attractive features of the island. If they are eligible for exemptions, this legal instrument can help residents save thousands or hundreds of dollars each year in taxes.

Contrary to the US, where investors must pay as much as 37% for short-term capital gains or 20% for long-term gains (which is applicable to crypto assets that have been held more than one year), Puerto Rico Law 60 lowers the percentage to zero for crypto investors and entrepreneurs.

A second incentive is the fact that businessmen who have established themselves on the island do not have to pay the 21% corporate tax which is levied on businesses in the mainland. Nor are the variable state taxes. This tax in Puerto Rico is 4% on services outside of the island.

CPA Shehan Chandrasekera is a specialist on cryptocurrency business and warns that companies need to be established in order to qualify for these tax advantages.

“This is the bit people aren’t talking about.”
Chandrasekera said. These benefits are only available to crypto entrepreneurs who first apply for Puerto Rican citizenship

Some investors choose to donate their earnings to the island. Investors invest, then after they obtain residency, sell the shares and buy them back like new assets.

They do this to prevent US profits from causing accounting problems.

Flipside

• Not everyone is thrilled with the new arrivals to Puerto Rico. Not least because the new tax laws that were intended to encourage foreign investment do not provide any benefit for locals, but only for foreigners.
• Puerto Ricans are required to pay 15% for capital gains. This has led to a widening gap.
• A significant increase in real estate prices on the island has been caused by the avalanche crypto investors.

What You Need to Care About

• Recent years have seen the destruction of the island by financial troubles, earthquakes, and hurricanes. The pandemic that struck the tourism sector added to the problem.
• With the new arrivals of foreign investors, this US territory overseas is gaining momentum.

EMAIL NEWSLETTER

Get the other side of crypto!

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7]
With just one click, you can unsubscribe at any time.

Continue reading on DailyCoin