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Are you living in the US?
Sick and tired of paying obscene corporate, dividend, capital gains, and personal taxes?
Do you like warm weather, beautiful beaches, and beautiful women?
You might want to look into Puerto Rico.
But let’s back up.
It was about a year or so ago I really started getting serious about tax strategies for my business as I have some pretty big goals and wanted to ensure I’m getting the most bang for my buck if I’m committing several years to a venture. After a conversation with @GlobalWealth at the 2018 Fastlane Summit I was introduced to the idea of Panama.
So I started researching. I read all that I could on Panama and other nations out there with favorable tax laws in terms of crypto since at the time I was trading pretty heavily. I also came across Andrew Henderson’s book Nomad Capitalist which was eye-opening to the potential strategies one could utilize by getting passports in different countries around the world.
At the time I was just getting my agency off the ground and had a few clients, but was still a long way off from really being able to benefit from any of these long term strategies that required renouncing US citizenship and the Foreign Earned Income Exclusion (FEIE) was only good up to $100k. I was left with the burning question:
What can I do right now to either completely eliminate or significantly reduce my tax burden on my rapidly growing company?
About a year ago I was on a call with @million$$$smile when I started talking about my plan to move to Panama which would still take 5-10 years to get a passport, but could still qualify for FEIE during that time. He had mentioned Act 20 & Act 22 and I had looked into it, but for some reason it didn’t quite click. Maybe I was too dumb at the time to realize just how valuable that little nugget of insight really was.
Continuing on the path of my original plan to move to Panama, I was supposed to take the leap back in October, just in time for my 29th birthday. I wussed out. I ended up blowing a ton of money getting a 3bd townhouse setup in Raleigh to run my business out of. Then the employee that I orchestrated that setup for bailed. Then I was just paying $1900/mo for an empty place. Granted, it was a nice place. But WTF was I really thinking?
Fast forward to around February of 2019. I owed taxes and I just made it out of a brutal bought of seasonal depression. Something about the cold weather and darkness don’t mix well with me. It was time. I was going to move to Panama, through hell or high water.
It was also around this time I had the chance to see a bunch of my Fastlane friends. After many drunken and sober conversations I believe it was @GIlman who had mentioned Puerto Rico again in passing. But it stuck this time. I immediately started pouring through the articles and of course, my business was a perfect fit for Act 20. And I’ll get to the specifics of it here in a moment.
The original plan was to move to Medellin with @RayAndré & @UnrealCreative for 60 days or so until our visas ran out, then make my maiden voyage to Panama. After discovering the incredible incentives in Puerto Rico, that plan changed a bit. Instead, the 3 of us all moved straight to Puerto Rico in early March.
And would I do it again? In a heartbeat.
The other Act 20/22 people here say we’re still in the honeymoon phase, but it has been nothing but adventure and fun times since arriving. At this point in time, I feel like I’m exactly where I need to be both on a personal and business level.
Now, let’s start getting into the specifics of Act 20/22 and why people REALLY move here. Don’t get me wrong, the beaches, the lifestyle, the people, the island vibe, it’s all amazing. It’s literally the icing on the cake. But the tax incentives, that’s something special.
Move a business to the island and pay only 4% in tax, move yourself to Puerto Rico and pay zero in capital gains, set up a bank or hedge fund and pay only 4% tax, etc. The list of tax incentives in Puerto Rico has become very impressive.
If you run an online service business or have a high net-worth, there is no better place to be if you’re a US citizen. And only Puerto Rico can offer you these tax incentives. We US citizens are taxed on our worldwide income. The ONLY exception to this is residents of the US territory of Puerto Rico.
Act 20/22 Summary:
Act 20 Benefits:
Act 20 Requirements:
Act 22 Benefits:
Act 22 Requirements:
There are other acts that you may be able to benefit from, take a look here for a comprehensive overview: A Detailed Analysis of Puerto Rico’s Tax Incentive Programs - Premier Offshore Company Services
I had someone that came highly recommended to me setup my structure and guide me in the right direction for my business, but happy to answer any other questions outside of the filing of the paperwork as best I can.
Sick and tired of paying obscene corporate, dividend, capital gains, and personal taxes?
Do you like warm weather, beautiful beaches, and beautiful women?
You might want to look into Puerto Rico.
But let’s back up.
It was about a year or so ago I really started getting serious about tax strategies for my business as I have some pretty big goals and wanted to ensure I’m getting the most bang for my buck if I’m committing several years to a venture. After a conversation with @GlobalWealth at the 2018 Fastlane Summit I was introduced to the idea of Panama.
So I started researching. I read all that I could on Panama and other nations out there with favorable tax laws in terms of crypto since at the time I was trading pretty heavily. I also came across Andrew Henderson’s book Nomad Capitalist which was eye-opening to the potential strategies one could utilize by getting passports in different countries around the world.
At the time I was just getting my agency off the ground and had a few clients, but was still a long way off from really being able to benefit from any of these long term strategies that required renouncing US citizenship and the Foreign Earned Income Exclusion (FEIE) was only good up to $100k. I was left with the burning question:
What can I do right now to either completely eliminate or significantly reduce my tax burden on my rapidly growing company?
About a year ago I was on a call with @million$$$smile when I started talking about my plan to move to Panama which would still take 5-10 years to get a passport, but could still qualify for FEIE during that time. He had mentioned Act 20 & Act 22 and I had looked into it, but for some reason it didn’t quite click. Maybe I was too dumb at the time to realize just how valuable that little nugget of insight really was.
Continuing on the path of my original plan to move to Panama, I was supposed to take the leap back in October, just in time for my 29th birthday. I wussed out. I ended up blowing a ton of money getting a 3bd townhouse setup in Raleigh to run my business out of. Then the employee that I orchestrated that setup for bailed. Then I was just paying $1900/mo for an empty place. Granted, it was a nice place. But WTF was I really thinking?
Fast forward to around February of 2019. I owed taxes and I just made it out of a brutal bought of seasonal depression. Something about the cold weather and darkness don’t mix well with me. It was time. I was going to move to Panama, through hell or high water.
It was also around this time I had the chance to see a bunch of my Fastlane friends. After many drunken and sober conversations I believe it was @GIlman who had mentioned Puerto Rico again in passing. But it stuck this time. I immediately started pouring through the articles and of course, my business was a perfect fit for Act 20. And I’ll get to the specifics of it here in a moment.
The original plan was to move to Medellin with @RayAndré & @UnrealCreative for 60 days or so until our visas ran out, then make my maiden voyage to Panama. After discovering the incredible incentives in Puerto Rico, that plan changed a bit. Instead, the 3 of us all moved straight to Puerto Rico in early March.
And would I do it again? In a heartbeat.
The other Act 20/22 people here say we’re still in the honeymoon phase, but it has been nothing but adventure and fun times since arriving. At this point in time, I feel like I’m exactly where I need to be both on a personal and business level.
Now, let’s start getting into the specifics of Act 20/22 and why people REALLY move here. Don’t get me wrong, the beaches, the lifestyle, the people, the island vibe, it’s all amazing. It’s literally the icing on the cake. But the tax incentives, that’s something special.
Move a business to the island and pay only 4% in tax, move yourself to Puerto Rico and pay zero in capital gains, set up a bank or hedge fund and pay only 4% tax, etc. The list of tax incentives in Puerto Rico has become very impressive.
If you run an online service business or have a high net-worth, there is no better place to be if you’re a US citizen. And only Puerto Rico can offer you these tax incentives. We US citizens are taxed on our worldwide income. The ONLY exception to this is residents of the US territory of Puerto Rico.
Act 20/22 Summary:
Act 20 Benefits:
- 4% corporate tax
- Tax credit for hiring Puerto Rico residents
- You can pay yourself in dividends at a 0% tax rate.
- Exempt from Federal taxes.
- You get to live in Puerto Rico
Act 20 Requirements:
- You must maintain Closer Connection in PR which essentially means ditching ties to the mainland.
- This translates to closing US business bank accounts, setting up PR bank accounts, among a long laundry list of other criteria which must be met.
- Rent or own property here.
- Get PR Drivers license
- Get registered to vote
- This translates to closing US business bank accounts, setting up PR bank accounts, among a long laundry list of other criteria which must be met.
- You must pass the physical presence test and be on the island for half of the year.
- Create a new entity in PR and have all of your income sourced outside of PR.
- There is no employee requirement currently for Act 20 companies, however if you leave the island you will want to have an employee on the island to “source” the income.
- You must pay yourself a reasonable salary from your company which is taxed at normal Puerto Rico tax rate (pretty high)
Act 22 Benefits:
- 0% capital gains tax
Act 22 Requirements:
- $5000 to Puerto Rico gov’t.
- $5000 annual donation to charity in Puerto Rico.
- Basically the same requirements as Act 20 as far as closer connection and being a bona fide PR resident.
There are other acts that you may be able to benefit from, take a look here for a comprehensive overview: A Detailed Analysis of Puerto Rico’s Tax Incentive Programs - Premier Offshore Company Services
I had someone that came highly recommended to me setup my structure and guide me in the right direction for my business, but happy to answer any other questions outside of the filing of the paperwork as best I can.
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