Against the backdrop of tightening tax policy in the United States, more and more crypto investors are obtaining a residence permit in Puerto Rico. This American offshore allows you not to pay tax on digital assets.
Now in the US, investors pay up to 37% for short-term capital gains and up to 20% for long-term capital gains. Long-term income is considered to be income from assets held by the investor for more than a year.
By obtaining a residence permit in Puerto Rico, an island nation in the eastern Caribbean, an investor can retain US citizenship. And at the same time receive tax benefits in accordance with local legislation, which reduces the tax on income from cryptocurrencies to zero.
Profits earned prior to moving to Puerto Rico are subject to US income tax anyway. Therefore, investors sell their assets, and then, having received a residence permit, they buy back.
“This is something that is not customary to talk about,” says Shehan Chandrasekera, head of cryptocurrency tax software company CoinTracker.io.
Entrepreneur and investor David Johnston reveals that a major relocation of the cryptocurrency business from the US to Puerto Rico is taking place right now:
“Literally: Pantera Capital is on the 5th floor, my company DLTx is on the 8th floor of the same building, and NFT.com is on the 12th. And all this happened in the last 12 months.”
Local corporate and tax attorney Giovanni Mendez says nearly half of his clients are either crypto companies or crypto investors, and the number is growing exponentially.
Locals are not thrilled that, unlike visitors, they are not exempt from capital gains tax. The rate for locals in Puerto Rico is 15% long-term capital gains. Moreover, the influx of Americans drove up real estate prices. Local authorities are going to introduce the first restrictive measures: mandatory vaccination for those migrating to the island.
In early 2021, the founder of Cryptozoo, crypto billionaire Logan Paul, migrated to the island. In April, Puerto Rico Governor Wanda Vazquez signed into law a bill that increased the annual fee for crypto entrepreneurs from $300 to $5,000.

Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.