- Puerto Rico is becoming a crypto hub as entrepreneurs flock to the lush island.
- Startups and bitcoin companies are finding a comfortable home there, CNBC reported.
- Generous tax breaks for residents are considered a significant benefit.
Puerto Rico has become a magnet for crypto entrepreneurs in search of tax breaks and a picturesque environment.
As CNBC reported, the island offers huge tax breaks to people who spend at least 183 days there every year, making it highly popular among the "crypto contingent."
According to Act 60, bona fide residents do not have to pay any taxes on US source capital gains if they bought assets after establishing residency there.
This law prompted crypto investor David Johnston to move his company and his family to Puerto Rico in March 2021, CNBC reported. "That's where all my friends are. I don't have one friend left in New York, and maybe the pandemic accelerated this, but every single one of them has moved to Puerto Rico," he told the outlet.
"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," Johnston said.
Over the past few years, Puerto Rico has been recovering from the devastation of Hurricane Maria, which hit in 2017.
Insider's Katie Warren wrote in 2020 that the island's tourism industry, which accounted for 6.5% of its GDP, was decimated, and that once-popular areas became deserted.
But the island has since rebounded. In July 2021, tourism organization Discover Puerto Rico reported that revenue from visitor spending and taxes were at an all-time high.
In a press release, Discover Puerto Rico's CEO said: "Despite facing many challenges stemming from the pandemic, the tourism community in Puerto Rico is once again showing the world its strength and resiliency. We are achieving a high rate of return on our marketing, sales and promotional investments."
Crypto-friendly policies are being implemented elsewhere, too. Recently, a nonprofit in Northwest Arkansas said it was offering $10,000 worth of free bitcoin to attract newcomers to the state. The offer includes a free bike too and has garnered more than 35,000 applicants so far.