Puerto Rico, despite being a United States territory, is seeing a wave of positive interest from crypto investors, since the island doesn’t charge federal income tax, and eligible investors can pay zero taxes on crypto income.
According to the local Act 22, each Puerto Rico citizen, living at least six months in the territory, is exempt from taxes on interest, dividends, and capital gains, which means investors can keep most or all of the profits from crypto or other investments.
However, Puerto Rico has been a crypto tax haven for years, but its popularity resurged with news about Frances Haugen, the Facebook whistleblower, moving to the territory in March. Furthermore, the founder of CryptoZoo and social media personality Logan Paul announced that he moved to the island earlier this year, commenting that the island’s tax-free status was a big part of the decision.
“In Puerto Rico, you’re motivated to do more and make more money because of the implications that come with it,” Paul noted.
Meanwhile, not only individuals choose Puerto Rico. Several crypto-related businesses moved to the island, including the Pantera Capital hedge fund, which moved from New York, and the non-fungible token marketplace SuperRare, which came in Puerto Rico from Silicon Valley.
To further increase awareness about the island, the Puerto Rico Blockchain Trade Association (PRBTA) announced its first Puerto Rico Blockchain Week, scheduled for December 2021. The summit seeks to lure more crypto millionaires and investments to the island.
“We seek to connect entrepreneurs with communities in Puerto Rico and educate them on the multiple benefits available in the crypto era,” Keiko Yoshino, executive director of the PRBTA added.
However, the capital inflow in Puerto Rico, apart from boosting economic growth, is also causing housing prices to soar, according to local residents.
Puerto Rico seems to have been closely following El Salvador’s major tax breaks on Bitcoin trading, as investors don’t need to pay capital gains and income tax on Bitcoin (BTC).
The island joins other classic tax havens that have a cryptocurrency-friendly environment, including Switzerland, the Cayman Islands, and Malta. Furthermore, St. Kitts and Nevis, which is home to “Bitcoin Jesus” Roger Ver, offers citizenship in return for an investment program.