Tax Saving and Asset Protection in Puerto Rico: Here's Why and How

When it comes to offshore jurisdictions, there are few that are more popular than Puerto Rico. As an entrepreneur, you likely understand why asset safety and tax savings are so important to your bottom line, which is probably why you’ve arrived at this article. We’re going to discuss how you can use Puerto Rico as an offshore jurisdiction for both asset protection and tax savings, a combo effect that you can enjoy with additional perks.

The case for securing your assets in Puerto Rico is a strong one. As the Panama Papers and other negative media attention have done a great job on casting a shadow on offshore investing, the truth it that the only time offshore investing is done wrong is when people try to evade taxes or launder money. For the typical individual or business entity, investing offshore is perfectly legal and acceptable.

Unfortunately, as scrutiny continues to rise, it’s getting more and more difficult to find reputable offshore jurisdictions that are going to offer the benefits you’d want. For instance, the once talked about “Swiss bank account” isn’t really all that great anymore because of regulations.

The good news, however, is that there is another option.

Puerto Rico: The Best Offshore Jurisdiction Today

If Puerto Rico isn’t on your radar as an offshore jurisdiction, it really should be. Puerto Rico is arguably one of the strongest offshore jurisdictions today, and it offers a long list of benefits that investors love. As an entrepreneur, these are benefits you’ll want to take note of. In a nutshell, opening an offshore account in Puerto Rico can bring major advantages for you and your company. Some of these highly sought after benefits include a low corporate tax, no capital gains, and zero U.S. taxes on income earned in Puerto Rico.

Located in the northeast Caribbean Sea, Puerto Rico is a U.S. territory. It’s a tourist destination, and it’s also become a popular spot to invest when opening an offshore account. In fact, it’s one of the last true to the core offshore jurisdictions in the world. Puerto Rico has worked diligently to keep regulations in place that favor investors.

For example, Act 60 has been widely talked about as one of the most pro-investor movements in offshore jurisdictions. Thanks to Act 60, you can enjoy a range of benefits when you open an offshore bank account in Puerto Rico. Some of these perks include a 4% corporate tax rate. Entrepreneurs don’t pay any taxes - at all - on income that’s earned in Puerto Rico. You also won’t pay taxes on dividends, capital gains, royalties, or interest.

Other Perks of Opening an Offshore Account in Puerto Rico

Aside from the tax savings, there are plenty of “hidden” reasons why entrepreneurs enjoy opening offshore accounts in Puerto Rico. For example, over the past few years, more than 18 International Financial Entities have opened up shop in Puerto Rico. This shows immense confidence and versatility in the market there. Puerto Rican banks tend to let you open up accounts online, which means you can get all of the benefits of a Puerto Rico bank account without stepping foot on the island.

The banks in Puerto Rico have a $0 minimum balance with the usual deposit requirement hovering at $500. Plus, the banking there is designated as full reserve banking. This means that 100% of depositors’ funds are kept on-hand as cash. This shows us that the banking system in Puerto Rico is very stable.

This world-class banking system also offers a number of trading and investing opportunities that pique the interest of entrepreneurs.

Puerto Rico is conveniently located between North and South America, making it a unique link between two major markets. This could be a serious advantage for any entrepreneur.

If you’re looking for confidential banking, then Puerto Rico is an obvious choice. The United States refused to adopt AeOI/CRS, and as a territory of the U.S., Puerto Rico has also not accepted these regulations. AeOI and CRS are reporting requirements, and since they aren’t used in Puerto Rico, you can rest assured that your information won’t be reported. The only time reporting is required is if a financial crime is suspected.

Protecting Assets and Saving on Taxes is Getting Harder

Options for offshore banking with all the perks have become harder and harder to find for the entrepreneur. Fortunately, Puerto Rico is one of the last true places where you can protect your assets, remain confidential, and save on taxes.

As offshore jurisdictions around the world raise minimum deposits and tighten restrictions, Puerto Rico is a last holdout.