CNN Money Talks to Peter Schiff: Puerto Rico the Next Singapore?
“Let’s say you want to start a business. Just start it in Puerto Rico. Why would you start it anywhere else?” This is what Peter Schiff told CNN Money in an article published yesterday. Peter and John Paulson are two of many successful investors CNN mentions as moving their businesses – and eventually themselves – to Puerto Rico.
CNN floated the idea that Puerto Rico could become the next Singapore by continuing to attract businesses with the tax advantages. Peter was the focus of their article:
Peter Schiff moved his asset management firm from Newport Beach, Calif., to San Juan in 2013. Schiff has bought a house in the Ritz Carlton compound just outside San Juan and water is not a problem for him. He plans to move there once his son graduates from high school. Individuals must live in Puerto Rico for 183 days a year to qualify for tax breaks.
“But his company is already enjoying financial benefits, paying a low corporate tax rate of 4%. In California, Schiff’s firm had to pay the U.S. corporate tax rate, which is about 35%. He says tax breaks like those encourage him to create more jobs, which Puerto Rico badly wants.
“‘I’m saving a lot of money,’ says Schiff, CEO of Euro Pacific Capital. ‘It’s the closest thing to renouncing your U.S. citizenship without actually doing it…You’re still an American, you’re just out from under the IRS.’
Of course, Peter has been recommending this strategy for years. In a recent commentary, “How Socialism Destroyed Puerto Rico, and How Capitalism Can Save It“, Peter explained how Puerto Rico’s economic problems stem from socialist policies that are not much different from what we see in Greece. However, he also points out that the island already has the foundation to dramatically reform itself:
With the current incentives provided by Acts 20 and 22 (which basically exempt Puerto Rico-sourced income for new arrivals from local as well as federal income tax) and with some additional local free market labor reforms, in a generation it’s possible that Puerto Ricans could enjoy higher per capita incomes than citizens of any US state.”
Earlier this year, Peter recorded a video from his condo in Puerto Rico. He explains not just why he’s moving to Puerto Rico, but why Americans are renouncing their United States citizenship at record rates.
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