David Johnston, a crypto-entrepreneur and investor, relocated from the US to Puerto Rico with his family and company in March 2021.
Apart from the fact that Puerto Rico enjoys a tropical climate all year round and beautiful beaches, the US territory also boasts cryptocurrency-friendly legislation, such as large tax reductions for people who stay in the country for at least 183 days per year.
Residents can keep their US passports and avoid paying capital gains taxes, and this undoubtedly helps bitcoin millionaires to make their decision.
Act 60 provides large tax savings to qualified citizens which is a great lure for many people. If certain conditions are met, one of the tax exclusions in Act 60, known as the Individual Investor Act, decreases that tax liability to zero. This is extremely crucial for cryptocurrency traders and entrepreneurs. Law 60-2019, which was advocated to strengthen the island’s struggling economy, is the reason for this migration of young billionaires to Puerto Rico, a US territory.
In the United States, short-term capital gains are taxed at up to 37%, while long-term capital gains are taxed at up to 20%, which applies to cryptocurrencies and other assets held for more than a year.
For this reason, Puerto Rico has become a popular vacation spot for high-net-worth Americans, many of whom are interested in cryptocurrencies and seduced by the island’s tax exemptions. In spite of it, the phenomenon is attracting a growing number of critics.
Furthermore, tech entrepreneurs are flocking to the Caribbean country due to the tax advantages and tropical lifestyle, however, not everyone is following this trend.