Could Puerto Rico Be the Next Hot Tax Haven? A loophole may make it a good place for foreigners to keep cash Some 65,000 Puerto Ricans left their bankrupt U.S. island commonwealth last year. A group of private bankers are moving the other way. They’re increasingly opening offshore banks known as International Financial Entities, which were created by a Puerto Rican law in 2012. There are 44 IFEs now, with 18 opening in the past year, according to data compiled by the U.S. territory’s financial regulator. “Just in the last six months, we’ve probably closed seven deals for international banks,” says Ryan Christiansen, president of Christiansen Commercial Real Estate, a brokerage based in Puerto Rico that leases office space. Tax experts attribute at least part of the influx to a little-known loophole made possible by the IFE structure. It lets non-U.S. account holders put money in Puerto Rico anonymously and potentially avoid taxes at home even as they benefit from the stability and safety of the U.S. That’s become increasingly attractive because of a new global financial-disclosure system taking effect in September. Under the Common Reporting Standard, more than 100 countries have agreed to automatically provide to one another annual reports about accounts belonging to people subject to taxes in each member nation. Previously, they mainly shared information on request, making it harder to identify suspect accounts. Much like the U.S.’s Foreign Account Tax Compliance Act, which requires foreign banks to report on Americans with accounts, the CRS initiative is meant to combat the use of offshore bank accounts to evade taxes. The loophole arises from quirks in various international disclosure agreements. First, the IFEs aren’t subject to the CRS reporting process because the U.S. hasn’t signed on to it, opting to stick with its 113 separate bilateral agreements. But the IFEs don’t have to comply with these because Puerto Rico, like all U.S. territories, is excluded from those deals. Puerto Rico provides substantial confidentiality protection for foreign individual investors, according to Tim Richards, whose law firm, Richards & Sanchez, specializes in international tax law.... https://www.bloomberg.com/news/articles/2017-08-22/could-puerto-rico-be-the-next-hot-tax-haven
When billionaires move in due to promised tax heavens, watch out, the local economy is doomed to split in two with massive inequality.
Cuba in all its might is resisting these parasites with the only known form of Democratic Socialism that has a chance of working: Cooperatives.