Entrepreneurs Pick Puerto Rico to Build Crypto Haven
Despite the devastation from a major hurricane, a bunch of crypto entrepreneurs is gearing to move their businesses to Puerto Rico to capitalize on massive tax incentives.
Some entrepreneurs don’t seem fazed by the fact that Puerto Rico is an island in the middle of the Caribbean that gets constantly pounded by hurricanes. People are moving their wealth from places like California to build a city that operates almost entirely on cryptocurrencies and smart contracts.
Halsey Minor, CNET founder and one of the entrepreneurs moving in from the Cayman Islands, wants to transplant his company, Videocoin, in the new city. He dubbed the situation a “perfect storm,” which might not be the best choice of words after Hurricane Maria battered the island.
“While it was really bad for the people of Puerto Rico, in the long term it's a godsend if people look past that,” he said.
Those who wish to move businesses to the island do not have to pay any capital gains taxes, making it extraordinarily attractive to investors in the cryptocurrency market.
There’s also the added benefit of business owners in the area being able to keep their U.S. citizenship.
However, more established executives that have moved their operations to the island are not as enthusiastic about the cryptocurrency boom there.
“They call me up saying they're going to buy 250,000 acres so they can incorporate their own city, literally start a city in Puerto Rico to have their own crypto world. I can't engage in that,” said Robb Rill, a hedge fund manager who currently operates out of Puerto Rico.
Brock Pierce, who leads the movement known as Puertopia, has concerns that people might see their city as an elaborate tax-dodging scheme.
As governments around the world prepare legislation to tax gains from cryptocurrency investments, Puertopia might very well be an attractive place that incentivizes growth in the crypto world.
On the other hand, there might still be some hope for those who want to avoid taxes in the U.K.: they can simply declare their Bitcoin gains as gambling winnings and keep all the loot without having to pay a penny.