Blockchain development continues strongly around the world. Much has happened in the crypto space over the past three years. Including serious bitcoin price falls (notably during 2022), easing of crypto expectations, greater understanding of crypto from governments, continuing crypto fraud stories, exchange negligence, and lack of consumer regulation continue to be a brake on the […]
Research Methodology The research methodology used in this work is the doctrinal style of research. It captures and theories digital asset regulation by considering its use in various countries using primary sources such as statutes. The research also adopts various secondary sources, such as textbooks, articles, legal journals, and periodicals, to further elaborate and expand […]
The price of bitcoin has surged back from its 2022 lows of $14k and is now steady at around $23k – despite recent setbacks – but does that mean cryptocurrency can stand alone from the banking industry? Far from it! The demise of Silicon Valley Bank rapidly followed by the implosion of Credit Suisse sent […]
Can I buy Bitcoin and cryptocurrency in Puerto Rico? The short answer is yes.
An introduction to Bitcoin and cryptocurrency trading in Puerto Rico
Puerto Rico has been an enthusiastic crypto and blockchain nation, but like many is looking to capitalize on, and better regulate, this burgeoning space. The snappily named Economic and Commerce Development Department of Puerto Rico DDEC has been busy establishing rules to attract and promote blockchain companies.
As such, Puerto Rico has also been keen to include crypto-related services as part of its latest regulations. A Sales and Usage Tax very much dips into Web3 territory by including NFTs as taxable assets, declaring that sales of these assets are declarable including, of course, the transaction details and gains.
The lure is tax concessions for those that VASPs and other blockchain-related companies that comply with the regulatory framework. Thus Puerto Rico is looking to consolidate itself as a premier destination for blockchain and fintech companies (along with everybody else, it must be said). However, much debate – and heated debate at that – concerns the questions as to how much wealth and opportunity brought by overseas investors (Crypto Colonisers as some put it) actually spreads outwards into the daily lives of Puerto Ricans.
Puerto Rico has earned a reputation as a hub for cryptocurrency, allegedly once having the largest volume of crypto coins concentrated in a single place in the world. Whilst several large financial institutions are located there, including the likes of FV Bank and Mercantile Bank International, recent natural events, including the catastrophic hurricane which devastated the country – and Bitcoin price rollercoasters – have changed the intentions of the country
Blockchain education and promotion in Puerto Rico
The Puerto Rico Blockchain Commerce Association states that the country is actively looking to compete in the global blockchain economy.
A Puerto Rico CBDC?
As a territory of the USA, Puerto Rico does not have its own central bank so any movement on this is likely to originate from the USA
Taxes in Puerto Rico
Bitcoin taxation in Puerto Rico
We’ve lost count of the gorgeous, sun-soaked paradises that are also web3, blockchain progressives, and also, er, low tax havens for crypto investors. This brings us neatly to Puerto Rico.
Puerto Rico for its natural attractions is also able to offer huge tax savings that crypto investors can bask in. As a part of the United States and with its people deemed US citizens, the country enjoys a good degree of autonomy. Puerto Rico is a territory and not a state and as such this autonomy results in its own tax laws.
The US is pretty firm on crypto taxation, with any profit earned on crypto over a year, considered a capital gain, and under a year a short-term gain – but taxed either way (short-term capital gains at a rate of up to 37% and longer-term at anything up to 20%). There are a whole lot of other variables too, we hasten to add, including an additional tax – the Net Investment Income Tax – which can result in another 3.8% of capital gains if the net investment income reaches a certain threshold….
However, Puerto Rico is substantially different. The resident investor can take advantage of tax exemptions which can result in zero tax on capital gains earned from crypto, interest, or dividends. If you’re a US citizen trying to claim you’re Puerto Rican and enjoy zero tax things can naturally get a little bit complicated, Going there for your holidays and claiming tax exemptions from Uncle Sam’s Inland Revenue could end in tears – best leave well alone.
However, as Puerto Rico is a US territory but not a state, it also has a super low corporate tax rate of 4% too – great for all those overseas companies (that aren’t from the US).
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