The Puerto Rico Asymmetry
Bad Bunny Just Showed 130 Million People Where the Smart Money Lives.
Last night, Bad Bunny did something no Latin solo artist had ever done: he headlined the Super Bowl halftime show. He turned the field at Levi’s Stadium into a Puerto Rican street — piragua carts, domino games, the casita from his residency, sugarcane fields. Ricky Martin showed up. Lady Gaga sang salsa. 130 million people watched Puerto Rico go mainstream. This morning, millions of Americans are Googling “Bad Bunny Puerto Rico.” I’ve been living here for six years. Not because of the music. Because of the math.
THE SIGNAL
Puerto Rico has, quietly, one of the most asymmetric tax structures available to any American citizen. It’s not a loophole. It’s not a gray area. It’s federal law — Section 933 of the Internal Revenue Code — combined with local incentive legislation known as Act 60.
Here’s the deal:
• 0% tax on capital gains (on assets acquired after establishing residency)
• 4% corporate tax rate (vs. 21% federal + state on the mainland)
• 0% on dividends and interest from Puerto Rico sources
• 0% state income tax (Puerto Rico has no federal income tax obligation for bona fide residents)
Read that again. If you are a bona fide resident of Puerto Rico and you buy Bitcoin, stocks, or real estate after you move — and you sell them — you pay zero capital gains tax. Not reduced. Zero.
For context: if you’re sitting in California, you’re paying up to 37% federal plus 13.3% state on short-term gains. That’s over 50 cents on every dollar. In New York, it’s similar. In Puerto Rico, it’s zero.
This is not theory. This is my life.
THE 6-YEAR CASE STUDY
I moved to Puerto Rico in 2020. I didn’t come for the beaches (though they help). I came because I saw an asymmetric bet: trade a high-tax jurisdiction for a zero-tax jurisdiction, within the United States, without renouncing citizenship.
Here’s what that looks like in practice:
Year one is an adjustment. You need to establish bona fide residency — 183 days on the island, a real home, a real life. You need to get a tax decree (it takes a few months). You need to actually live here. The IRS is watching, and they audit Act 60 residents aggressively.
But once you’re in, the compounding is extraordinary. Every dollar of capital gains I’ve earned since establishing residency has been taxed at 0%. Every business I’ve run through a Puerto Rico entity has been taxed at 4%. The delta between what I would have paid on the mainland and what I’ve paid here is — conservatively — life-changing.
And I’m not alone. The island has become a magnet for entrepreneurs, crypto founders, hedge fund managers, and anyone else who understands that tax efficiency is the single highest-ROI financial decision you can make.
THE MATH THAT MATTERS
Let’s make it concrete. Say you have $5 million in capital gains over five years. On the mainland (let’s use a blended 40% rate): you owe $2,000,000. In Puerto Rico: you owe $0.
That $2 million stays invested. It compounds. Over a decade, the difference isn’t just $2 million — it’s $2 million plus every dollar that $2 million would have earned.
That’s the asymmetry. The tax you don’t pay becomes your most productive capital.
Now multiply that by every year you live here. The gap doesn’t close. It widens.
THE LIFESTYLE ARBITRAGE
Here’s what surprises people: Puerto Rico isn’t a sacrifice. It’s an upgrade.
I wake up in a tropical US territory. I drive on American roads (well, mostly). I use American banks, American healthcare, American legal protections. My mail arrives via USPS. I vote in local elections. I fly to Miami in two and a half hours, to New York in three and a half — no passport required.
The real estate is stunning. The food culture is deep. The weather is 80 degrees year-round. The surf breaks are world-class. And the community of builders here — the people who moved for the same reasons I did — is one of the most ambitious, high-agency groups I’ve ever been around.
Bad Bunny showed America what Puerto Rico looks like. I can tell you what it feels like: it feels like freedom with a tax advantage.
THE FINE PRINT
I’m not a tax advisor, and this is not tax advice. Act 60 has real requirements:
• You must be a bona fide resident (183+ days per year, tax home on the island, closer connection to PR than anywhere else).
• You must apply for and receive a tax decree.
• Capital gains on assets acquired BEFORE moving are not tax-free (they’re taxed at 5% after 10 years of residency, or at regular rates if sold sooner).
• There is an annual $10,000 charitable donation requirement.
• As of 2026, new applicants face a 4% tax on investment income (still dramatically lower than mainland rates).
• The IRS audits Act 60 residents. You must be compliant. No half-measures.
This is not a hack. It’s a commitment. You are relocating your life to an island. But if you’re already location-independent — if your wealth comes from investments or a portable business — the question isn’t “why would I move?” It’s “why haven’t I already?”
THE BIGGER PICTURE
Bad Bunny closed his set last night by saying “God Bless America” and shouting out every country in the Americas. Puerto Rico is America. It’s a US territory with 3.2 million American citizens. And yet most Americans couldn’t find it on a map.
That’s changing. The culture is going mainstream. The economics have been favorable for years. The infrastructure is improving. And the window — while not closing — is narrowing as more people discover what’s been hiding in plain sight.
The best time to move to Puerto Rico was six years ago. The second best time is now.
Currently Reading: The Technological Republic by Alexander C. Karp & Nicholas W. Zamiska. The Palantir co-founder and CEO makes the case that the tech industry has lost its way — building photo-sharing apps and ad algorithms instead of defending the institutions that make Western freedom possible. It’s part manifesto, part biography, part indictment of Silicon Valley’s complacency. Karp argues that hard power requires hard technology, and that the engineers who build it need to care about more than market cap.
The Sovereign Individual by James Dale Davidson & Lord William Rees-Mogg. Written in 1997, it predicted the rise of jurisdictional arbitrage, digital nomads, and the decline of the nation-state’s ability to tax mobile capital. We are living in the book.
Worth a Click: PuertoRico.com (http://puertorico.com/) — I’m building the definitive resource for luxury real estate and relocation in Puerto Rico. If you’re serious about making the move, start here.
Cheers to the Freedom Fighters,
Jordan Fried