The US territory of Puerto Rico is experiencing a resurgence in interest among cryptocurrency investors, because they are not charged federal income taxes, and some investors are completely tax exempt on their cryptocurrency earnings.
Under local law, Law 22, those who live in Puerto Rico for at least half of the year are exempt from taxes on interest, dividends, and capital gains. That means they can keep most or all of their income from cryptocurrencies or other investments without having to give up their US residence.
The territory’s popularity as a crypto tax haven was highlighted when it was revealed that Facebook whistleblower Frances Haugen had moved to Puerto Rico in March. However, it has been a haven for cryptocurrency investors for years.
Logan Paul, a social media personality and founder of CryptoZoo, moved to the island earlier this year, where he rents a mansion for $ 55,000 a month. Paul told Time Magazine that the island tax’s free status was a big part of the appeal:
“In Puerto Rico, the effects of it make you feel more motivated to do more and make more money.”
Cryptocurrency-related companies that have moved to Puerto Rico in recent years include New York-based hedge fund Pantera Capital and the Silicon Valley SuperRare non-fungible token market. More traditional types of finance, like legendary hedge fund manager John Paulson, have also become residents.
The Puerto Rico Blockchain Commerce Association (PRBTA) recently released the first edition of the Blockchain Week from Puerto Rico by December 2021, which aims to attract more crypto millionaires and investments to the island.
â ???? We seek to connect entrepreneurs with the communities of Puerto Rico and educate them about the multiple benefits available in the age of cryptocurrenciesâ ????, said Keiko Yoshino, CEO of PRBTA.
The capital migration that cryptocurrencies bring to Puerto Rico is driving economic growth, but it has disadvantages for locals. Projects like Puertopia, a crypto-utopian community in San Juan, are blamed for causing property prices to skyrocket.
Puerto Rico isn’t the only place to invest in crypto.
With the aim of attracting investors and cryptocurrency companies, El Salvador also offers significant bitcoin trading tax breaks, exempting investors from paying capital gains and income taxes on Bitcoin (BTC).
Other classic tax havens have a crypto-friendly environment, such as Switzerland, the Cayman Islands and Malta. Home of “Bitcoin Jesus” Roger Ver, St. Kitts and Nevis enables savvy investors to avoid taxes and provides citizenship to cryptocurrency companies and millionaires through an investment program and asset protection benefits.
In Portugal, cryptocurrency traders and miners are exempt from income tax. and in April, the country approved the Digital Transition Action Plan, which will encourage the creation of economic spaces dedicated to promoting blockchain-based businesses.