Puerto Rico as a Tax Haven: Insights and Experiences

Introduction

• Puerto Rico attracts US citizens with beautiful beaches, amazing weather, and significant tax benefits.
• Speaker lived in Puerto Rico for over three years and shares insights into the pros and cons.

Tax Programs in Puerto Rico

• Act 20: Provides a 4% corporate tax rate for businesses.
• Act 22: Offers 0% capital gains tax, popular with stock traders and crypto investors.
• Act 60: Combines the benefits of Acts 20 and 22.
• Restrictions under Act 20 include no US office space or employees; Act 22 requires buying a home within two years.
• Misconception: You can’t sell a business or crypto not built/acquired on the island.

Setting Up in Puerto Rico

• Expect to do a lot of paperwork; recommended to use a company like "P Relocate."
• Set-up costs: Approximately $5,500 - $6,000, taking about 4 months.
• Visit the island first to get a feel for it before moving.

Living in Puerto Rico

• Physical Presence Test: Must spend at least 183 days a year on the island.
• Closer Connection Test: Establish ties such as registering to vote, having a local phone number.
• Maintaining a home year-round; cannot rent it out while away.
• Cost of living varies; a decent apartment starts around $3,500. High-end areas like Condado can be significantly more expensive.

Lifestyle and Recreation

• Puerto Rico offers great golf courses and beautiful beaches.
• Dorado Beach: An upscale community with significant costs.
• Safety: Importance of having a concealed carry license, mixed experiences with crime.

Challenges and Considerations

• Government and infrastructure may not function well; unreliable phone service.
• Safety concerns: Gunfire, crime; personal experiences of witnessing crime.
• Healthcare can be a challenge with skilled professionals often leaving the island.
• Natural beauty and activities like bioluminescent bay tours.

Reasons for Leaving Puerto Rico

• Travel inconvenience: Far from mainland US and other regions.
• Lifestyle did not align with personal and professional goals.
• Increased cost of living despite tax savings.
• Environment felt restrictive and less conducive to personal growth.
• Concerns about safety and quality of infrastructure.
• Encountered racism and discrimination.
• Trash and cleanliness issues on the island.

Conclusion

• Despite challenges, living in Puerto Rico was a valuable experience.
• Encouragement to consider global options for tax reduction and importance of choosing a residence that supports personal well-being.

Final Thoughts

• Personal growth, health improvements, and learning experiences were positive aspects.
• Reiterates that personal comfort and motivation levels are influenced by living environment.
• Encourages others to explore different global opportunities for tax benefits.