The major sectors of Puerto Rico’s economy are manufacturing (primarily pharmaceuticals, petrochemicals, and electronics) followed by services (tourism and hospitality). The Caribbean island is a perfect blend of relaxation, nature and history, thanks to its colonial past that has left numerous testimonies here and its territory is capable of giving unique suggestions, consisting of volcanic rocks and the splendid sea. Puerto Ricans have been U.S. citizens since 1917, and can move freely between the island and the mainland. However, as residents of an unincorporated territory, American citizens of Puerto Rico are disenfranchised at the national level, do not vote for the president or vice president, and generally do not pay federal income tax. Puerto Rico is becoming a crypto hub as startups and crypto companies are finding a comfortable home here, CNBC reported. Generous tax breaks are considered a significant benefit to people who spend at least 183 days there every year. According to Act 60, bona fide residents do not have to pay taxes on US source capital gains if they bought assets after establishing residency there and can keep ahold of their American passports at the same time. In the U.S., investors pay as much as 37% on short-term capital gains and up to 20% on long-term gains, which applies to crypto and other assets held for more than a year. One of the tax breaks under Act 60, known as the Individual Investors Act, drops that tax obligation down to zero if certain qualifications are met. This is especially huge for entrepreneurs and crypto traders. There is also a major tax incentive for business owners to set down roots in Puerto Rico. Mainland companies are subject to a 21% federal corporate tax, plus a state tax, which varies. If a firm exports its services out of Puerto Rico, to the U.S. or really, anywhere else, they pay a 4% corporate tax rate.
In March 2021, crypto entrepreneur and investor David Johnston moved his family and company to Puerto Rico. The crypto fund Pantera Capital has opened an office in San Juan. Sean Walsh (founder of Redwood City Ventures, a Silicon Valley investment firm targeting the Bitcoin, and Blockchain ecosystems) and crypto billionaire Brock Pierce also moved to Puerto Rico. Many other entrepreneurs have taken a flight and moved here. In April 2022 Puerto Rico has become the fourth jurisdiction in America to grant a money transmitter license to Binance.US.
According to the announcement, Brian Shroder, Chief Executive Officer of Binance.US, said, “Following the successful close of our seed round, we are thrilled to build on our momentum with the receipt of this license and are grateful for the trust of the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF). As America’s home to buy, trade, and earn digital assets, our goal is to offer the most compliant and customer-centric exchange in all 50 states and territories. Puerto Rico, in particular, is an important market for the growth of crypto and we look forward to continuing to offer its residents secure, reliable, and low-fee access to a robust selection of tokens.”
In addition to the economy, the Blockchain can also bring other benefits to the Caribbean island. According to Bloomberg, Puerto Rico lawmakers want to use Blockchain to cut corruption after a local mayor in December 2021 pleaded guilty to accepting more than $ 100,000 of bribes in cash.
Interest in cryptocurrencies is growing on the island and the Puerto Rico Blockchain Trade Association was established to build an inclusive crypto community and propel Puerto Rico to the forefront of Blockchain innovation, attracting new talents and businesses, and positioning the island as a leader in the cryptocurrency space. The association promotes many initiatives, including Crypto Mondays, a weekly meet-up held at nice hotels and restaurants in the capital, as well as Crypto Curious, which draws people new to the space and covers topics like NFTs, DeFi, and how to open your own crypto wallet. Hundreds of locals have begun to partake in those gatherings, which are now also being offered in Spanish. Puerto Rico Blockchain Week will be held from 5 to 10 December 2022 with numerous guests, events and conferences.
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