Puerto Rico grows as a cryptocurrency haven
Recent months in the island territory of Puerto Rico have seen a surge in entrepreneurs. Cryptocurrency enthusiasts have appointed Puerto Rico as a tax sanctuary. The reason for the rush in self-made crypto fanatics moving to the island territory: no US domestic tax law nor the FATCA (Foreign Account Tax Compliance Act).
Unlike in the US mainland, cryptocurrency investors in Puerto Rico need not hand over money earned by cryptocurrency. Under Act 22 – a law in Puerto Rico, investors are absolved from taxes on interest, dividends, and capital gains. The outpouring of outsiders moving to Puerto Rico started in 2018, and hasn’t stopped there; now, cryptocurrency millionaires continue uprooting their lives in the US mainland for a cheaper life in the territory.
Entrepreneurs are choosing the islands over startup cities like San Francisco. In Puerto Rico, those involved in cryptocurrencies have formed a “crypto-community” of US millionaires. This community boasts luxurious, comfortable living neighborhoods in San Juan, the capital of Puerto Rico. However, moving to Puerto Rico from the mainland United States isn’t as straightforward or tranquil as it might seem.
Maintaining and starting residency is complicated. In order to obtain residency and be exempt from US tax bills, cryptocurrency investors need to live in Puerto Rico for at least 183 days per calendar year, as well as not have closer connections with another country. Another form of obtaining residency: getting a driver’s license, bank account, and registering to vote.
Not only are self-made cryptocurrency millionaires moving to Puerto Rico, but so are cryptocurrency companies. Pantera Capital—which launched the first cryptocurrency fund in the US—has recently shifted its operations to Puerto Rico to take advantage of lax tax rules.
Through these cryptocurrency enthusiasts, enticing “crypto-communities,” and local tax regulations (or lack thereof), the US territory continues to see an incline in outsiders moving to Puerto Rico.