The Tax Advantaged Investor: A Guide to Legal Tax Reduction!

“You look out your window, past your gardener, who is busily pruning the lemon, cherry, and fig trees… amidst the splendor of the gardenias, hibiscus, and hollyhocks.

The sky is clear blue. The seas is deeper blue, sparkling with sunlight.

A gentle breeze comes drifting in from the ocean, clean and refreshing, as your maid brings you breakfast in bed.

For a moment, you think you have died and gone to heaven.

But this paradise is real. And affordable. In fact, it costs only half as much to live this dream lifestyle… as it would to stay in your own home.

Want to Wake up Every Day in Paradise?”

• NOTICE: This is the official guide to tax arbitrage in Puerto Rico maintained by the University of Puerto Rico MBA Students. The intent of this free public service Udemy course is to assist managers in accessing unbiased and truthful information regarding relocating to Puerto Rico for tax benefits.

Dear taxpayer,

So begins my friend Bill Bonner’s famous promotion that launched his excellent publication International Living.

The reality is that a tropical American dream at 1st world standards is not widely for sale at a two for one discount.

I’ve known oil-rich-bass-fishin’ Texans driven from vacation homes in the mountains of Mexico by machine gun toting “Federali” expropriators. How would you feel if you had bought a pristine beach vacation home pre-Chavez in Venezuela?

Political risk in strange countries is not your only dilemma.

Uruguay’s Punta del Este is one of my favorite places in the world. Make sure you pack an extra suitcase of C-notes if you wish to own there.

The country has no mortgage market.

I love carnival in Rio. How about you?

Brazil imposes complicated restrictions on foreign capital that generally obviates real estate ownership. Most of Europe is no cake walk either.

The list of countries with bumps in their political or financial landscape goes on and on.

Under the searing microscope of independent reason most post-card-coastlines are rejected. In the end analysis these barbed-wire framed masterpieces of nature are nowhere you would really want to live.

A commonly overlooked tropical exception is Puerto Rico.

Discover the 17 Ways to Pay Zero Taxes Living on a Warm Tropical Beach in Puerto Rico!

1. Research and Development
2. Advertising and Public Relations
3. Consulting
4. Advice on matters relating to any trade or business
5. Commercial arts and graphic services
6. Production of construction drawings architectural and endangering series and project management
7. Professional services, such as legal, tax and accounting
8. Centralized management services
9. Centers for electronic data processing
10. Development of computer programs
11. Telecommunications voice and data between persons located outside of Puerto Rico
12. Call centers
13. Shared Services centers
14. Storage and distribution centers (“hubs”)
15. Educational and training services
16. Hospitals and laboratories
17. Investment banking and other financial services

What allows you to buy the American Dream in our paradise here at a 50% discount or more derives over time from money not lost in taxes. And your Caribbean lifestyle is delivered with a lifetime iron clad anti-expropriation guarantee of the United States Common-Law Constitution. This covers not just you but also your inheritors.

You’ll have a clear understanding of the meaning of this by the end of this course. I just might convince you to wind down your days with us on the sunny tropical Caribbean island of Puerto Rico.

But first let me give you a background from which to understand.

The Untold History of Puerto Rico

At slightly less than three times Rhode Island Puerto Rico is the third largest isle in the United States. That’s a hundred and ten by forty miles of prime Caribbean acreage basking in a year round climate ranging between 70 and 96 degrees Fahrenheit at 18.45⁰ latitude slightly north of the equator. This Latin paradise of eternal spring is part of Jimmy Buffet’s most coveted Caribbean sailing grounds.

Only Hawaii’s Big Island and Kodiak Island in Alaska are larger.

The lush tropical land sits on a foundation of 190-million-year old rock. The massive subduction zone slopes into the largest and deepest trench of the frigid Atlantic to the east.

The backbone of the island paradise is a range that composes two thirds of the land mass. It climbs to 4,393 feet above sea level.

The central Puerto Rico cordillera forms the rim of a massive eastern bowl that shelters and warms the Caribbean Sea to the west. Sections are of an unexpected breathtaking beauty normally discovered on a major continent in places as majestic as California’s Yosemite or Washington’s Olympic Peninsula.

It also creates the canvas for more than a dozen ecological micro climes.

The most arid of these in the south are reminiscent of deserts along the southern Arizona border. The most humid is El Yunque, the only tropical rainforest in the National Park System.

The Caribbean Basin Drive for Increased Employment

The Bahamas levy neither income, capital gains nor inheritance tax. But the problem over yonder is that you have to deal with the political risk of a foreign government.

The only choices you have for safely owning your piece of perpetual paradise with United States Federal property protection and tax benefits are St. Thomas, St. Croix, or Puerto Rico.

The U.S. Virgin Islands offer a 90% exemption from U.S. income taxes and 100% exemption from all other taxes and duties if you qualify. You do receive property protection from the United States federal government.

This mitigates political risk.

But over in that neck of our aquatic sports range you end up living on a tropical dirt speck the size of a postage stamp. Ditto for the slightly larger but relatively desolate island of St. Croix.

I am sure that you won’t be surprised to learn that Island fever is the leading cause of exit from the United States Virgin Islands within a few years of relocating.

Most Americans think that Puerto Rico is a third world country. Think again.

I am writing you now to show you secrets from my 23 years of living on the Island of Puerto Rico while engaged in extensive business in the region. I have run the analysis many times over these many years.

Every time I crunch it through I consistently conclude that Puerto Rico is the best place for you to enjoy a Jimmy Buffet lifestyle on a Warren Buffet budget of tax savings.

New initiatives from the top of Puerto Rico’s Free Associated State have just recently created fantastic opportunities for legal tax avoidance in return for job creation. These benefits are bestowed on financial services firms willing to relocate to our Enchanted Isle — and home of the uber-cute Coqui frog.

Amazingly, the benefits are best for retired ultra-high net worth individuals living on portfolio income. And I think you will enjoy a refreshing change to …

A Blended Culture Devoid of Slavery Anger!

This derives from a history largely unmarred by slavery. Slaves at peak population never numbered more than one or two out of ten Africans or descendants during the 1700s in Puerto Rico.

Perhaps this is from the lingering local distaste of the initial enslavement by Ponce de Leon of the Taino Indians in a tortuous fluvial gold panning system. This resulted in bloody rebellion and the wrath of Queen Isabela. Taino descendants populate Puerto Rico as do their ideas and memories.

This contrasts starkly with the United States, Cuba and the Dominican Republic where 9 out of 10 people from Africa were slaves.

Puerto Rican culture offers a refreshing color blindness bequeathed by a history largely devoid of such oppression.

Also unique was the fact that Europeans outnumbered African throughout the post Taino Indian history in Puerto Rico. Cuba and the Dominican Republic were over 90% Africans with regard to total population at the time.

Nearly all were slaves.

The Spanish census reveals that the 583,181-person population of Puerto Rico was listed as just fourteen percent slaves of total and interestingly sixteen percent of “colored.” This was in 1860 well before the 1873 abolition of slavery in Puerto Rico.

Not surprisingly there are no racial riots in Puerto Rico.

The Spanish language spoken on the island is pleasantly devoid of sub-dialects arising from the unjust brutality of slavery.

For further reading see “The Puerto Ricans – A Documentary History” by Kal and Olga Wagenheim.

The True Birthplace of the Puerto Rican Independence Movement

The hunger for self-determination began rather inauspiciously with the birth of Ramón Emeterio Betances on April 8, 1827. As Ramón matured into a competent European trained ophthalmologist and Freemason he grew to loathe the ravaging governance of mother Spain.

Even more he despised the Castilian acceptance of slavery. He was thrown off the island for buying child slaves whom he would immediately free.

His Freemason connections followed a freedom network that connects to the fathers of the American Revolution.

Dr. Betances, the political refugee eventually landed in New York. He gained the respect of Congress after convincing the legislature to vote against the annexation of the Dominican Republic.

His argument rested on the inviolable right of a people to self-determine.

Betances is widely recognized as the father of the Puerto Rico Independence Movement. His Freemason philosophy connected his Caribbean cry for revolution with that of our own. His written pamphlets from 1867 closely resonate the thinking of Ben Franklin and Thomas Jefferson:

The Right to Reject All Taxes

1. Freedom of Religion
2. Freedom of Speech
3. Freedom of the Press
4. Freedom of Commerce
5. The Right to Assemble
6. The Right to Bear Arms
7. The Inviolability of the Citizen
8. The Right to Elect Our Authorities
9. Abolition of Slavery

These are the TEN COMMANDMENTS of Free Men according to Betances.

His 31year battle for independence ended in decree that Puerto Rico would be shaken loose from a collapsing Spanish government. The strongest evidence of the full faith of Spain’s intention was the commissioning of sovereign coinage for the island.

The Puerto Rico pattern coin was formed in 1890.

The design was finalized with the issuance of 5, 10, 20, 40 centavo and 1 peso numismatics minted in 1895 and 1896. The one-ounce sterling silver Peso is the crown jewel of the 11 piece series.

“Dame un Peso” does not refer to a U.S. Dollar.

By August of 1898 the Puerto Rican populace was eagerly awaiting the arrival of King Alfonso from Spain for the formal act of separation followed by planned joyous celebration.

Just Weeks Away From Sovereign Independence…

The United States of America invaded Puerto Rico in July 25th of 1898.

The idea was to create a force as large and powerful as the British Royal Navy. The strategy called for control of marine routes related to the Panama Canal.

Puerto Rican coinage was truncated after its second year of issuance. However, the Spanish symbolism of Puerto Rico’s ephemeral sovereign nature resonates through the local government today.

For the next 19 years Puerto Ricans were exploited as little more than indentured slaves by large American corporations. These were extensions of an already thriving United States banana republic in Central America.

Locals were compliant from acclimation in the Hacienda “ficha” system of the Spaniards. This process came to a grinding halt when the Jones Act conferred United States citizenship to Puerto Ricans in 1917.

Citizenship was received with mixed feelings. Roughly half of Puerto Ricans wanted statehood.

The rest wanted nothing of the sort.

A Pro-Statehood Party (PNP) developed within the population.

Two prominent Puerto Ricans, poet Luis Muñoz Marín and pharmacy chain mogul Teodoro Moscoso negotiated with Congress to secure the right of Puerto Ricans to self-determine.

They worked in conjunction with Congress appointed governor Rexford Tugwell. The renowned Columbia economics professor was highly supportive of both men.

Over his tenure Governor Tugwell had come to love the people and Hispanic culture of Puerto Rico. He did not want it erased by the mandatory linguistic imposition that American-English statehood would unequivocally create.

The American melting pot could not tolerate a second official language.

Tugwell used his influence in Congress that dated as far back as Frankin D. Roosevelt’s “Brain Trust” that led up to the New Deal. His input as an experimental economist was an important guiding force throughout the process.

A Free Associated State model was developed and approved in Congress.

This conferred taxation, insurance, and retirement plan autonomy to the Puerto Rican government in 1947. Medicare and social security benefits for locals are restricted and residents cannot vote in a United States presidential ellection.

This created the only foreign tax system within the borders of the United States.

The combined brilliance of Marín, Moscoso, and Tugwell had birthed the first political economic system that ensured the preservation of the local Hispanic culture and language.

This Free Associated State model of Puerto Rico has many parallels with that of both the American State and the European Union (EU) systems. The theory that led to the EU was published in the 1960s by Bagwell’s Columbia economics fellow faculty member Robert Mundell.

Professor Mundell won the Nobel Prize for his work that formed the European Union.

Luis Muñoz Marín became the first Puerto Rican governor elected by a popular majority of the Puerto Rican people.

The Free Associated State was immediately recognized by the Pro-Statehood (PNP) populace as antithetic to statehood. The right to vote put power into the hands of both sides.

Ironically, the most fervent separatists also viewed the new situation as antithetic to independence. The local Freemason movement started so many years ago by Dr. Betances quickly evolved into a Pro-Independence Party (PIP).

The new Popular Party (PPD) under governor Marín sought to form a free associated commonwealth with the United States as had been planned pre-invasion with Spain.

Both parties seek a degree of autonomy but in a different way.

For this reason, you may hear the Popular Party (PPD) referred to as a watermelon. The green color of the Pro-independence camp wraps around the red of the Popular party.

The pro-statehood party color is the same navy blue of the American flag. The blue of the Puerto Rican flag that flies on the governor’s mansion oscillates between navy and original powder blue depending on the party of the sitting governor.

The lack of a clear vision for an acceptable path to independence has led to the near extinction of the PIP party today. And there has never been a sitting governor from the independence party.

Meanwhile, the Free Associated State has flourished into a working synergy between the Popular Party, the Pro-Statehood party, and the Congress of the United States.

Economic Development in Puerto Rico

Teodoro Moscoso became the first administrator of economic development. He created Operation Bootstrap in 1947 to transition Puerto Rico from an agrarian to an industrial society.

A shrinking farm job market forced lesser skilled but now passport holding Puerto Ricans to the United States. West Side Story is a portrayal of conflict between dislocated lower class Puerto Rican households and those of other New York immigrants competing for menial jobs.

Nonetheless Puerto Ricans thrived giving rise to superstars such as Jennifer Lopez, Marc Anthony, Raul Julia, Ricky Martin, Rita Morena, José Ferrer and Benico del Toro. And that is just the entertainment field. Most Americans know that the Honorable Sonia Sotomayor is the first Hispanic United States Supreme Court Justice.

The Puerto Rican Diaspora centers around New York, Chicago, and Florida.

Attempts at developing industries around heavy products were eventually throttled by high freight costs. The negotiation that formed the Free Associated State came with the agreement that all freight on and off island would come and go by vessel flying an American flag under the Jones Act.

The next phase of economic development under Section 936 focused on high value products with low weight. Margins on featherweight products are insulated from high freight costs.

Section 936 tax exclusions created a vibrant hub of pharmaceutical firms. President Bill Clinton squashed the program.

This stripped the island of between fifty and one hundred thousand highly skilled pharmaceutical jobs.

The New American Dream — The Puerto Rico World-Class Export Service Sector Super Hub

In 2008 Harvard trained governor Aníbal Salvador Acevedo Vilá signed into existence Act No. 73-2008. This new law reestablished a tax benefit system designed to incentivize the relocation to Puerto Rico of commercial scale firms.

It is intended to repair the economic crater from the loss of Section 936 through the creation of new jobs on the island. This aligns well with the Popular Party’s utopian “Jibaro” philosophy that only hard Criollo work will guarantee “bread, land, and liberty.”

The Popular Party desired the strongest possible tax incentives to repair the damage of extensive job loss from the Clinton Administration. And fortunately, pro-statehood PNP party successor Luis Guillermo Fortuño Burset gave his full support of the formation of a vibrant export services hub in Puerto Rico — in return for tax incentives.

Act No. 73 was gradually overhauled. In 2012 it was signed into new form as Act 20 and Act 22 by new PNP governor Luis Fortuño.

Only a 4% tax remains.

Enroll in this course today. It is the only official course on tax-incentives-for-jobs relocation to Puerto Rico.

This course is your go-to-source for knowledge you can use to take intelligent directed action. Our training puts you in direct contact with the attorneys, accountants, human resource specialists, managers, service employees, and realtors you need.

And we watch them closely within our UPR-MBA alumni web. This ensures a focus on your needs.

This is the official University of Puerto Rico guide to relocating to our Enchanted Isle under act 20 and 22.

This program is assembled in an academic team with my MBA students. You can enroll in this Udemy course now for free.

This program offers you the inside track to Puerto Rico available nowhere else, such as ….

Cutting taxes on interest, dividends, and capital gains.

Karate chopping your corporate rate to 4% if you operate a highly profitable, heavily taxed exportable service; professional consultants, software firms, cardiologists, hedge fund managers, or any of many other businesses and occupations.

Watching unfolding developments in Puerto Rico tax incentive laws.

Applying for tax incentives.

Determining for yourself if you can benefit without paying thousands to an attorney.

Asking our erudite experts on matters regarding day to day living in the Caribbean paradise of Puerto Rico.

Enroll today,

Dr. Scott Brown, Ph.D.

Associate Professor of Finance of the AACSB Accredited Graduate School of Business of the University of Puerto Rico.