03/13/2013 10:54 am ET

Puerto Rico Wants To Become Tax Haven For Wealthy Foreigners

Hedge fund manager and subprime bubble popper John Paulson is considering a move to Puerto Rico after a new law exempted immigrants from capital gains taxes in a bid to attract new residents with Paulson-esque levels of wealth.

There’s really only one question to ask: What took Puerto Rico so long?

The island nation is well positioned to join other offshore locations, like UK territories Jersey and the Cayman Islands, in helping wealthy individuals pay less tax. Puerto Rico is a US territory, which means it is technically part of the United States but largely administered by an insular local government. It is a four-hour flight from New York City, offers a nice climate, and doesn’t have another obvious strategy for economic growth. But most important is the law passed last year, which exempts new residents from the island’s already small 10% capital gains tax.

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