Why do crypto investors move to Puerto Rico?

Crypto investors move to Puerto Rico mainly for taxes. Puerto Rico is a US territory with its own tax system, and its resident investor incentive can exempt certain capital gains for people who obtain a decree and become bona fide residents. Bloomberg reported in 2021 that the island had drawn a wave of crypto founders and funds, citing taxes, remote work and a growing crypto community.

What is Act 60, and how did Act 22 apply to crypto?

Act 22 of 2012, the Individual Investors Act, offered new residents a Puerto Rico tax exemption on interest, dividends and capital gains. In 2019 it was folded into Act 60, the Puerto Rico Incentives Code. According to the US Government Accountability Office, Puerto Rico granted 5,852 resident investor decrees from 2012 through 2024. Under the decree, gains that accrue after the move can be fully exempt, while gains that built up before the move face a 5% rate if realized after ten years of residency. The incentives do not single out crypto, but crypto gains are covered by the same capital gains rules.

How does Puerto Rico bona fide residency work?

Federal tax law lets bona fide residents exclude Puerto Rico source income from US income tax. Income from US sources is still taxable. GAO explains that bona fide residency under section 937 requires three things: no tax home outside Puerto Rico, no closer connection to the US or another country, and meeting a presence test, such as 183 days on the island in a year. An IRS training document notes that some taxpayers have wrongly treated gains on property bought while living in the US as Puerto Rico source income.

What is the IRS Act 60 compliance campaign?

The IRS announced a campaign on Puerto Rico Act 22 individual investors on January 27, 2021. GAO's December 2025 report said it was still one of 46 active campaigns as of July 2025. GAO found that the average federal tax paid by recipients fell about 46% after they moved, and recommended that the IRS get better data from Puerto Rico's Treasury and send educational letters. The IRS agreed. For how audits work more generally, see does the IRS audit crypto.

What changed with Act 38-2026?

Act 38-2026 amended Act 60 in early 2026. According to Kevane Grant Thornton and DLA Piper, applications filed after December 31, 2026 would pay 4% on interest, dividends and post-move capital gains, instead of 0%, with the program extended to December 31, 2055. Existing decrees stay valid through 2035. DLA Piper noted in March 2026 that the law was pending final endorsement by Puerto Rico's Fiscal Oversight Board, and Cryptoweek could not confirm the outcome of that review as of October 2026. For other jurisdictions, see which countries have no crypto tax and how crypto is taxed in the US.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.