Rich Crypto Investors Flock to Puerto Rico – Media
Some locals are reportedly not pleased by the crypto investors moving to their island, in part due the capital gains tax exemption there is essentially “designed for non-Puerto Ricans."
Cryptocurrency investors, such as “crypto billionaire” Brock Pierce and YouTube personality and “NFT investor” Logan Paul, have now started flocking to Puerto Rico, which has apparently become “the new hot destination for the crypto contingent,” CNBC reports.
According to the media outlet, “crypto entrepreneur” David Johnston, who moved to Puerto Rico with his family and his company, told them that there’s more than one crypto company based in his office building.
"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, we took over the eighth floor, and NFT.com took over the twelfth floor. That's all happened in the last 12 months," he said.
As the media outlet explains, while mainland companies in the United States pay 21 percent federal corporate tax plus a state tax, companies that export their services from Puerto Rico only have to fork out 4 percent tax.
And while Shehan Chandrasekera, tax strategy head at crypto tax software company CoinTracker.io, noted that gains realised prior to one’s arrival to Puerto Rico are subject to US mainland capital gains tax rates, it is possible for an investor with “a certain amount of gain” to sell their stake after establishing residency at Puerto Rico, and then to buy it as a new position.
20 December 2021, 13:19 GMT
Some locals, however, are reportedly not too thrilled about the increase of new arrivals, due to being unhappy with the fact that they themselves are not qualified for capital gains tax exemption “designed for non-Puerto Ricans."
The influx of rich crypto investors had also resulted in rising real estate prices, which, along with the increasing cost of living, had also “fanned the flames of resentment,” as the media outlet put it.