The Crypto Rich Are Flocking to Puerto Rico

[wxa7115]

Tax free, crypto friendly who wouldn't want that, seem like the perfect place for crypto lovers to reside on, more people will take advantage of this but I hope this is not just a bait offered to lure people in before they will have a reason to change this policy, I hope the government has a strong source of generating revenue because tax plays a vital role in that aspect.

You bring an important angle to the discussion, there are people that are rich enough that they can decide where to live in order to save on taxes, however one of the most important aspects is the stability of the jurisdiction where they want to live.

After all even if things are attractive when it comes to the taxes other aspects need to be taken into account, like the weather, the standard of living you can expect on the country and the political stability of the country, the last aspect is key, after all, you do not want to go through the trouble of moving to another country only for the laws to be changed while you are there and then you will have to pay huge taxes because of it.

[hello_good_sir]

Not sure how sustainable this is.

The U.S. government is probably going to impose sanctions on it sooner or later in order to stop this from happening.

Personally at least, this is just not a worthwhile trade off. I'd rather be able to see friends and family than to save a couple hundred thousand bucks.

[stompix]

The U.S. government is probably going to impose sanctions on it sooner or later in order to stop this from happening.

Definitely, the US will never tolerate this, pretty sure they are going to put sanctions and invade....their own territory.  Act 22 was created a decade ago, it's nothing new and cryptocurrencies won't be the things that would put any pressure on it to be amended.

I wonder if this tax-free policy for newcomers actually helps Puerto Rico. It's quite a desperate move, and it seems that their economy keeps declining overall anyway.

Puerto Rico lost 12% of its population in the last 10 years, that's why there is such a decline in the GDP, but if you look at GDP per capita it has grown 22% in the last decade.There is literally no comparison between them and any other country around:

[odolvlobo]

Not sure how sustainable this is.
The U.S. government is probably going to impose sanctions on it sooner or later in order to stop this from happening.
Personally at least, this is just not a worthwhile trade off. I'd rather be able to see friends and family than to save a couple hundred thousand bucks.

Sanctions? The tax advantages for Puerto Rico are purposefully and explicitly given by U.S. law.

[Fortify]

The St. Regis Bahia Beach Resort in Puerto Rico boasts a golf course and oceanfront residences in a 483-acre nature reserve, set along azure waters and lush rainforest. But what’s perhaps most appealing to those who are now rushing to this property is the section on its website explaining tax benefits for island residents.

That was the case for Anthony Emtman, who left Los Angeles behind and bought a condo at the resort in March. The chief executive officer of Ikigai Asset Management is now a part of a burgeoning crypto community along Puerto Rico’s north shore, where the tropical weather is just a bonus.

Emtman and his crypto peers are taking a page out of hedge funds’ books and seeking residence on the island to reap huge tax savings. High-earning investors in the U.S. pay up to 20% in capital gains tax and as much as 37% on short-term gains. In Puerto Rico, they pay nothing. And companies based on the American mainland pay 21% in federal corporate tax plus an individual state tax, compared to just 4% on the island. That makes the move a no-brainer for some investors, especially as the crypto market’s meteoric growth continues and Democrats push for higher taxes on the rich.

The presence of digital currency enthusiasts is already palpable on the small island, where chance encounters and networking opportunities abound: Run-ins at taco stands; spontaneous drinks and dinner at luxury condos; “Crypto Mondays” gatherings at hotels and restaurants across San Juan.

Crypto funds Pantera Capital and Redwood City Ventures are among those that have established offices on the island. Facebook product manager-turned-whistleblower Frances Haugen recently told the New York Times she's living in Puerto Rico in part to be with her “crypto friends.” New York City’s mayor-elect, Eric Adams, even flew there in November with crypto-billionaire Brock Pierce for dinner with Puerto Rico’s Governor Pedro Pierluisi.

Now, “it’s not just, ‘Move to Puerto Rico to save tax,’” said Giovanni Mendez, a corporate and tax attorney advising those who relocate. “It’s, ‘Move to Puerto Rico because everybody is there.’”

The Puerto Rican government created the tax breaks in 2012 with the hopes of infusing the island’s struggling economy with cash and diversifying its job pool. Hedge funds gradually began seeking a toehold on the island, but what’s really supercharged the flurry of arrivals is the pandemic — which drove a shift away from big cities and popularized remote work — and the recent explosion in crypto markets.

-snip-

It's an interesting read but from what I understand any US citizen will be paying taxes on their global income regardless of where they are based? I guess this just means what people are prepared to pay on top of their US tax obligations to  live in another country? Once you get to that level of rich where you're managing your multiple millions, then your country of residence becomes rather flexible. They might have an official home residence in this country, but spend much of the year travelling around whatever destinations they choose - a flag of convenience in nautical terms. No matter how many acres this millionaires playground is, the rest of the country cannot serve their luxurious needs indefinitely.