The new billionaires of cryptocurrency are searching for legal tax solutions to keep the IRS away from their recently acquired fortune, so they have started to look for new spots to settle in. One option that has attracted a large mass of Crypto billionaires is Puerto Rico. Puerto Rico is the tax haven for crypto investors because only here can you avoid capital gains tax on passive investments.
Keep in mind that US citizens living abroad are taxed on their worldwide income. No matter where you live in the world, so long as you hold a US passport, Uncle Sam wants his cut. The ONLY exception to this rule on the planet is the US territory of Puerto Rico.
For more on tax planning for crypto investors, see: How to Trade Bitcoin Tax Free
Dozens of entrepreneurs, recently enriched by block chains and cryptocurrencies, are heading to Puerto Rico. They are selling their homes in Silicon Valley and establishing their residence on the Caribbean island in the hope of avoiding state and federal taxes on their growing fortunes, some of which reach billions of dollars.
For more than one year, Investors in Cryptocurrencies have been looking for a place to establish a “Crypto Haven” and they found one in Puerto Rico. After the devastating hurricanes Irma and María decimated the country’s infrastructure this Crypto magnates may be the key to get the island back to the caribbean paradise it used to be.
Investors are looking for properties where they can have their own airports and docks and an amazing view of the waterfront. They are close to getting the local government to allow them to open the first cryptocurrency bank under the island’s Act 273. For more, on Act 273, see: Lowest Cost Offshore Bank License is Puerto Rico.
For information on setting up a bank for the crypto industry, see: How to Setup an Offshore Bank for the Marijuana Industry
For my book on international bank licensing on Amazon, see: Offshore Bank License Guide, 2017
These entrepreneurs have a plan of what to do with their acquired wealth. They want to build a new city where money is virtual and contracts are on the blockchain, to show everyone what the crypto future would look like. The idea is to create a city where you can only use cryptocurrencies and use blockchain technology. This new city will be called “Sol” and has already broken ground.
The Crypto billionaires still debate the exact form that the new city in Puerto Rico will take. Some think that they should build a city, others that it is enough to move to Old San Juan. In any case they expect to mobilize very quickly. They have never seen any industry being the catalyst for a place as they will see it now.
The local government is happy to offer the old San Juan so that the people settle there. In addition, the governor plans to speak at the “Puerto Crypto” summit that will take place in March to address the topic.
Some of the island’s residents are open to the proposal and see it as an injection of investment and a sanctuary for new ideas. Some owners of local stores see this opportunity as a new entrance of money after the hurricane. Even when that money is digital.
Others worry that their island will be used for an experiment and consider the initiative a kind of ‘cryptocolonialism’. Puerto Rico has always been a victim of those who want to take advantage of tax issues. That’s why not everyone is happy with the idea of transforming it into a paradise for cryptocurrencies.
Until the Crypto Billionaires find an adequate place to live in the island, they have found a home in the Monastery. A hotel of 20,000 square feet that they rented as a base and that to a large extent had not been damaged by the hurricane. The Crypto Haven has not yet started to operate and money is already flowing to the island. One question that has to be answered is why did the Crypto Billionaires choose Puerto Rico as their residence and not another country.
Cryptocurrency investments often lead to huge profits, which creates many different taxes that the Crypto investor has to pay to the government. According to the laws of the United States, you have to pay a tax on capital gains of up to 39%.
Those who have established accounts and businesses in Puerto Rico do not pay any income tax with cryptocurrencies, and no capital gains on assets acquired after they move to the island. Puerto Rico, which is a commonwealth of the United States, has relaxed tax laws compared to the rest of the country. One of those laws is related to the capital gains tax, which is 0% in this part of the US.
It is still very early to tell what will happen with Puerto Rico and cryptocurrencies, but the future looks bright and affluent for the island.
I hope you’ve found this article on Puerto Rico and Cryptocurrencies to be helpful. For more information, or for assistance in investing in Puerto Rico or opening an offshore company, please contact us at firstname.lastname@example.org or call us at (619) 550-2743. We’ll be happy to assist you with your international tax plan and support you.