The Commonwealth of Puerto Rico, is an unincorporated US territory with self-governing status. It is located in America, northeast of the Caribbean, east of the Dominican Republic and west of the Virgin Islands. Its west coast is located approximately 1536 kilometers southeast of the coast of Florida. The archipelago of Puerto Rico includes the main island of Puerto Rico and a number of smaller cays and islands, of which the largest are Mona, Vieques and Culebra. It is populated by 3.6 million inhabitants and its capital is San Juan. Its official languages are Spanish and English. Its official currency is the US Dollar.
Despite its small size and limited availability of natural resources that can be exploited economically, Puerto Rico’s productivity is exceptionally high, with the highest nominal per capita income in Latin America.
Puerto Rico imports 85% of the food it consumes and all energy. It does not have any coal, natural gas, nor oil reserves. Manufacturing is the largest economic sector of the island, almost half of its GDP. Its major industries are the pharmaceutical, textiles, petrochemicals, and electronics. Tourism is another of its main sources of wealth, with about 5 million tourists visiting the country annually. The financial sector is an economic bloc of great preponderance for its economy, which is integrated to the American financial system, being governed under its regulations, being part of the jurisdiction of the Federal Reserve Bank of New York.
Puerto Rico used to have tax exemptions for US companies that settled in the Commonwealth, and allowed its affiliates operating on the island to send their profits to the parent company tax-exempt. In 2006 the US Government cut this tax benefit and the economy of Puerto Rico entered into recession which lasts until now. The Commonwealth has serious problems to meet its obligations to the debtors, declaring bankruptcy in May 2017 to restructure its multimillion-dollar public debt.
Puerto Rico has currently, under the Individual Investors Act, several tax exemptions for passive income, such as dividends, capital gains or interests, for foreign individuals (including Americans) relocating to its territory and setting tax residency there. At Flag Theory, we offer internationalization options to diversify your life, personal finances and business internationally. Below, you will find how to get residency in Puerto Rico, business and investment opportunities and banking options.
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