Latin American country Puerto Rico has become the new haven for bitcoin millionaires with Act 60, which offers significant tax savings to qualified residents.

Act 60, known as the Individual Investors Act, noted that tax obligation can be down to zero if certain qualifications are met, which can be especially enticing to entrepreneurs and crypto traders, according to a CNBC report.

There is also a huge tax incentive for business owners eyeing to set down roots in Puerto Rico. Mainland companies are subject to a 21 percent federal corporate tax, plus state tax.

However, CPA Shehan Chandrasekera warned that any gains realized before arriving at the nation are still subject to the standard capital gains tax rates on the U.S. mainland.

It is only the gains that are earned after becoming a Puerto Rican resident that is excluded from taxes.

Chandrasekera said that that is the part that people are not talking about.

The tax rules in Puerto Rico were imposed a decade ago to help bring in people and cast at a time when the island was losing substantial amounts of residents and money.

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Puerto Rico For Crypto Millionaires

YouTuber Logan Paul was among the many who flocked to Puerto Rico with its looser tax laws. Paul started his own NFT trading game, CryptoZoo. He is reportedly spending $55,000 per month on a home, according to Facebook whistleblower Frances Haugen.

Haugen moved to the island in 2021 and has been making a living out of crypto investments, according to a New York Post report.

Giovanni Mendez, a local corporate and tax attorney, said that it is not just because of lower taxes, but it was also because everybody is in Puerto Rico. Mendez has been helping onboard new Puerto Ricans. He noted that he started speaking with clients about whether to move to Florida or Puerto Rico. Many opted for Puerto Rico.

The local attorney said that he really was not expecting a lot of people to move with everything going on during the pandemic. However, many did move and coupled with an increase in the value of crypto assets.

Pantera Capital and Redwood City Ventures are also two cryptocurrencies that have recently opened offices on the island, according to TheStreet report.

Brent Johnson, CEO of wealth management firm Santiago Capital, said that moving to Puerto Rico felt like he could do his job while still being connected to the financial community much more, as compared to Hawaii or Mexico.

Locals, however, are seen not to always welcome this type of situation as an influx of high-earning outsiders could worsen inequality and create a situation wherein locals are priced out of neighborhoods and opportunities.

There are also questions whether the tax breaks are achieving what the government was aiming to do, such as creating jobs and sinking more cash into the local economy.

Rising real estate prices and the growing cost of living have also caused concerns.

Keiko Yoshino runs the Puerto Rico Blockchain Trade Association after being a government employee for seven years.

Yoshino said she had been called a crypto colonizer, adding that she is not crypto-rich and does not have incentives. Yoshino said that people need to work on stereotypes going both ways. She added that it does not need to be a social issue; rather it is an opportunity to build community.

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This article is owned by Latin Post.

Written by: Mary Webber

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