In the United States, Puerto Rico has seen a resurgence of interest among crypto investors, drawn by the fact that they do not levy federal income tax and qualified investors can pay zero tax on their cryptocurrency.
Under Local Law No. 22, people who live in Puerto Rico are exempt from interest, dividend, and capital gains taxes for at least half a year — which means they can withhold most or all profits from cryptocurrency or other investments without having to give up the US states. Accommodation.
The region’s popularity as a crypto tax haven was highlighted when news broke that Francis Hogan, a Facebook alert, moved to Puerto Rico in March. But for years, it has been a haven for cryptocurrencies, including the Puerto Rican Bitcoin billionaire who owns a nine-bedroom mansion.
Logan Paul, social media personality and founder of Cryptozoo, moved to the island earlier this year, renting a mansion for $55,000 a month. Paul told Time magazine that the island’s tax-exempt status was a big part of the appeal:
“In Puerto Rico, you have the incentive to do more and make more money because of the consequences.”
Cryptocurrency firms that have moved to Puerto Rico in recent years include New York-based hedge fund Pantera Capital and Silicon Valley’s NFT SuperRare. More traditional forms of financing, such as legendary hedge fund manager John Paulson, are also becoming residents.
The Puerto Rican Blockchain Trade Association (PRBTA) recently announced the first edition of the Puerto Rican Blockchain Week in December 2021, which aims to bring more crypto millionaires and investments to the island.
“We strive to connect entrepreneurs with communities in Puerto Rico and educate them about the many benefits available in the age of crypto,” said Keiko Yoshino, CEO of PRBTA.
The capital exodus that cryptocurrency brings to Puerto Rico increases economic growth, but it has disadvantages for the local population. Projects like Puertopia, a crypto utopian community in San Juan, have been blamed for high home prices.
Puerto Rico is not the only place where cryptocurrencies compete.
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With the aim of attracting crypto investors and companies, El Salvador also offers significant tax incentives when trading bitcoin, while exempting investors from paying capital gains and bitcoin income tax.
Other classic tax havens are crypto-friendly environments, including Switzerland, the Cayman Islands, and Malta. Saint Kitts and Nevis, the home of Bitcoin Jesus Roger Ver, is allowing savvy crypto investors to avoid taxes and offer citizenship by investment and value-protection and benefits programs for crypto-millionaires and businesses.
In Portugal, cryptocurrency traders and miners are exempt from income tax, and in April the country approved a digital transition action plan that will help create economic zones designed to encourage blockchain-based businesses.