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Under Act 60 or the Individual Investors Act, non-Puerto Rican residents get exempted from paying capital gains for investments realized. This is one of the factors attracting crypto investors, mostly Americans, to the Island.
The rule is crypto-friendly because investors in the U.S. are required to pay 37% of capital gains in the short term and 20% in the long term. It came into effect nearly ten years ago to draw investors to Puerto Rico.
Giovanni Mendez, a corporate advocate and tax expert, acknowledged that most of the entities seeking his services were crypto companies or investors.
David Johnston, a crypto entrepreneur, relocated to Puerto Rico from New York in March 2021 and disclosed that most of his friends had also made the move. He stated:
“I don’t have one friend left in New York, and maybe the pandemic accelerated this, but every single one of them has moved to Puerto Rico.”
Johnston added that his whole office building was surrounded by crypto start-ups and companies.
“Pantera Capital (a crypto fund) is on the fifth floor, and then there’s a co-working space on the sixth floor. My company, DLTx, took over the eighth floor, and NFT.com took over the twelfth floor. That’s all happened in the last 12 months.”
Therefore, crypto-friendly policies, coupled with a year-round tropical climate with picturesque beaches, are making Puerto Rico a popular destination.
Different places are gearing up to become crypto destinations. For instance, Brazilian city Rio de Janeiro recently revealed plans to invest 1% of its reserves in Bitcoin, with plans underway to have tech companies located in Porto Maravalley presented with tax incentives.
Some country is also developing by building a crypto-friendly environment to potential investors. Last November, El Salvador President Nayib Bukele announced the nation’s intention to build the first fully functional Bitcoin city to boost crypto adoption and awareness.
Image source: Shuttstock
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