Guellord MbusaMore and more bitcoiners are emigrating to the island of Puerto Rico. It is not for its beautiful landscapes that fans of Satoshi Nakamoto's creation move to the Caribbean island, but for its crypto policy. After the announcement by the United States of payment of ltax on crypto gains, several investors from thecrypto ecosystem flock to Puerto Rico to take advantage of its tax regime that is far too lenient for crypto businesses
The payment of thecrypto gains tax remains one of the most controversial subjects in the ecosystem to this day. In the United States, the crypto-assets are considered properties. This means that holders of virtual currencies are also subject to tax like stock holders. Although many people in the community disapprove of this policy, failure to pay this crypto tax leads to prosecution.
Puerto Rico, a tax haven for crypto investments?
Everyone can say what they think but in any case the territory, although in the United States, does not levy federal income tax on cryptographic gains. In fact, the local law Act 22, provides that residents of Puerto Rico are exempt from taxes on capital gains, interest, and dividends. As a result, island residents are free to keep all their profits for themselves for at least six months.
This law remained unknown to the general public for a long time until Frances Hagen, American engineer and former employee of Facebook, lets the cat escape into its cattery. After Haugen, a media mogul, Logan Paul, also moved to the island. Logan Paul is a (relatively subversive) social media personality and founder of NFT projects like Cryptozoo. He rents a mansion on the island for $55 per month. Paul declared to Time Magazine that the island's tax-exempt status was a big part of the appeal. “In Puerto Rico, you are motivated to do more and make more money because of the implications that come with it. ": he said. It was the beginning of the influx of entrepreneurs to the Caribbean island.
We can also cite Dubai, as a welcoming city for crypto-millionaires. However, Dubai remains an expensive city to live in. Puerto Rico turns out to be more interesting in terms of purchasing power.
Cryptocurrency businesses on theCaribbean island
Apart from individual actors, some companies have moved from their location to the island. This is the example of Pantera Capital, a hedge fund. Another hedge fund tycoon, John Paulson, now lives in Puerto Rico. Super Rare also moved to the island. SuperRare is a marketplace NFT which previously operated in Silicon Valley.
The millionaire David Johnston also moved his entire family from Austin to live in Puerto Rico in March 2021. Immersed in the crypto space since 2012, the millionaire calls the move an “obvious choice.” He also said that many of his friends had made a similar decision. “This is where all my friends live. I don't have any friends in New York anymore, and maybe the pandemic has accelerated that, but every one of them has moved to Puerto Rico,” Johnston told the newspaper CNBC.
As a result, the Blockchain Trade Association of the island hosted its first Blockchain week in December 2021. The initiative aims to encourage more people and businesses to come and settle on the island. With the influx of all these entrepreneurs, it's no surprise that Puerto Rico's economic growth is reaching a new level.
Competition between Puerto Rico and El Salvador
El Salvador is one of the countries where crypto investments are exempt from taxes. Thus, there is continuous competition between Puerto Rico and the country of Nayib Bukele.
—-> Read the article « "Don't drink the lies of the elites" by Nayib Bukele.
Like many developing countries, El Salvador is struggling to lift its people out of poverty. And this despite a high level of industrialization and the adoption of the dollar as the national currency for around twenty years. With a rate of inhabitants living below the poverty line estimated at 30% according to TV5 Monde and " Ratio of the poor population according to the national poverty line” which is 26.2 according to World Bank data; the statistics do not praise this small South American country.
Faced with this situation, the new and young president of the country elected on February 3, 2019 should act as quickly as possible. One of the alternatives chosen by Nayib Bukele is the legalization of bitcoin(BTC), two years after his election. Added to this are successive purchases of bitcoins which have earned him tons of criticism from all over the world. In total, El Salvador has 2 bitcoins. At the time of writing, October 16, 2022, one bitcoin is trading for just under 19 150 dollars. Therefore, the country's bitcoin reserves represent an equivalent of just under 45 million.
New laws in the country allow crypto investors to trade without paying income tax and capital gains tax on Bitcoin (BTC). With vast projects like EL Zonte (“Bitcoin Beach”), the Salvador is also attracting more and more Bitcoiners.
Final reflections
Since cryptocurrencies have gained popularity, many islands (see Satoshi Island) and countries (such as the Central African Republic and the sango corner) become lenient towards crypto investors. Apart from these two of Puerto Rico and El Salvador, crypto investors can enjoy the same freedom in places like the Cayman Islands, Malta, the Switzerland, Georgia or Nevis, where miners and traders do not pay taxestax on income.
Some crypto-holders therefore decide to settle in these crypto-friendly countries and some go even further by purchasing a second passport to avoid taxes in their countries.
However, other players in the crypto industry have been forced to relocate to other countries in order to avoid large expenses and continue their operations. Indeed, the crypto space has many examples where policies are unfavorable towards cryptocurrencies.
That being said, the overall trend indicates that more and more countries are deciding to be supportive judging by countries launching their own MNBC (National Currency of Central Bank).
—–
Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.
Read other related articles:
- Discover " Satoshi Island, a new bitcoin island is born
- More and more bitcoin villages around the world
- Plan B Passport: Do you need a second passport?
- Bitcoin Beach: How “El Zonte” became a model bitcoin city?
- Nayib Bukele: “Stop drinking the Kool-Aid of the elites”
—–
Our affiliate links:
Buy cryptocurrencies (the easy way):
Generate interest on your cryptocurrencies:
- Public chat Youhodler (Earn up to 12% interest)
Secure your cryptocurrencies:
To have fun and play
- The best for Esport and bitcoin sports betting : CloudBet
- Discover the bitcoin casinos
