A first-person commentary (YouTube video) about US citizens using Puerto Rico residency to avoid federal income tax by paying a low Puerto Rican tax rate. The speaker explains the 51% residency rule, notes large financial savings for high earners/business owners, and reflects on the lifestyle trade-offs—living somewhere undesired, travel burden, and prioritizing personal satisfaction over pure tax-driven moves.
Chapters
If you're a US Citizen living in Puerto Rico, you actually don't have to pay federal income tax. You'll just pay a 4% flat rate tax to the Puerto Rican government. So if you're a high earner or if you own a successful business, then that's a huge amount of savings. Problem is, a lot of the people that do this don't actually want to live in Puerto Rico. In order to get this tax benefit, you have to spend at least 51% of your year in Puerto Rico. And so a lot of people will be flying back and forth constantly to try to maintain family relationships, but still be spending 51% of their time in Puerto Rico. Basically, you're living somewhere you don't want to live just for the tax benefits. Your quality of life, though, is way worse. Not to mention all the time and money you're wasting going back and forth between Puerto Rico and the states. If you want to make a lot of money and you want to live in a tropical paradise, then, hey, Puerto Rico is where it's at. But for most people, they're just doing it for the tax benefits. Personally, I'd much rather live somewhere that's a little bit more expensive, but that I really enjoy living in. Because when it comes down to it, money isn't the reason I'm doing this. The reason I work hard, the reason I'm trying to build this business is to help people and to create the freedom that I want to experience in my life. I.
