Dan Novaes explains legal strategies the ultra-wealthy use to drastically reduce taxes, focusing mainly on Puerto Rico’s Act 60 for U.S. citizens (zero capital gains tax, low business tax) and contrasting this with more extreme options like renouncing U.S. citizenship to move to zero-tax jurisdictions (e.g., Dubai). He details qualifying/residency requirements for Act 60 (presence tests, community ties, donation to a local nonprofit), practical levers (travel days can count toward the 183-day test; limits on days spent in mainland USA), and gives a concrete numeric example: selling a business for $4M could incur roughly $1M federal capital gains tax plus up to ~$400K state tax (California), whereas Act 60 could eliminate the capital gains tax — the speaker then shows how $1M saved invested at 8% for 30 years grows to ~ $10M to illustrate time-value/compounding. The video is educational and promotional (invites viewers to join a community and check resources in comments).
Questions this video answers
At least 183 days per year (travel days can count toward this total).
Not spending more than 90 days max in the mainland USA (48 states) is mentioned as a route to qualify without reaching 183 Puerto Rico days.
A 60-day minimum inside Puerto Rico per year over a three-year period is mentioned as part of qualifying guidance.
About $1,000,000 (speaker gave ~ $1M as an approximate federal capital gains tax).
Up to approximately $400,000 (about 10% in the California example).
Chapters
Most people are stuck in a system designed to work harder and not smarter. We're here to expose the strategies, the loopholes and the Life hacks for 1% use. This is universal basic knowledge. What if I told you if there are people who legally pay almost nothing in taxes on their global income just by changing their address? The ultra wealthy have been doing this for years and now you can too. The constant your citizenship or reside determines where and how you will be taxed. Most people stay tied for high tax systems by default, but the wealthy, they opt out strategically. Now if you're a US citizen, there are going to be different rules that apply to you. If you're one of our worldwide viewers, there are different rules that apply to you. We're going to give you some of the options here. Obviously you should dive in much deeper on this, but this is just to open up your eyes of what's possible and, and as you build your wealth, how you can make that wealth go even further. So let's break down three tax havens high net worth individuals are using right now. So one of the most popular and probably the most popular, easiest one to do is living in Puerto Rico. If you are a US citizen, the X60 allows you to pay 0% on capital gains and as little as 4% on your business income, right? So if you were making a million dollars, you will pay $0 on capital gains, if that is through a stocks or crypto or something of that nature versus in the United States. If you're living even in a state like Florida with zero state taxes, you are still eligible to pay upwards of 20 to 25% on those capital gains pre deductions, right? So this is a really, really big deal if you think about this in the grand scheme of things. Now how do you take advantage of Act 60? So are first you need to move there and establish real residency. You can't just get a license and say hey I live here. You need to actually be able to approve this test and there's some steps that you will need to go through. But if you do this right, you could sell millions of dollars in crypto or stocks for example, and get them essentially tax free on those gains. So how do you qualify? You've got to pass the three prong resonance test, the presence test. You have to spend at least 183 days per year in Puerto Rico at as one of the main criteria is if you want to take advantage of zero cap gains. Now fortunately, what a lot of people don't know is that travel days count. So in theory you could spend less than 183 days if you travel appropriately. So I have heard some of these stories. These are pretty crazy. You know, if you want to do this and live this lifestyle, it works for you. But essentially you could essentially leave on a Thursday and then essentially come back on a Monday. And while essentially you left Puerto Rico on Thursday at midnight, right. And then you came back On Sunday at 11:59pm you essentially were able to count both of those days within your schedule. So this may work if you live in something like Miami and, and you could easily come back and forth. So it depends on how aggressive you want to be here. So you don't have to be exactly 183 days because travel days count. Right. And so if you're really thoughtful about it, in theory you can get this down to closer from six months, closer to four and a half months is kind of like the numbers. But you need to spend time there, right? In addition to the 183 day opportunity with the travel days, another option for you is that you can have, you have to spend at least a second, a 60 day minimum inside of Puerto Rico over a three year period per year. Now another hack here that a lot of people don't know and for you to still qualify on the presence test is that you can actually not have to spend that whole 183 days. You will have to hit the 60 day minimum. But if as long as you don't spend more than 90 days max in the mainland USA, so you know, the mainland of the 48 continuous states, you essentially still can qualify without actually hitting the 183 days. So a lot of people that like to be a nomad or live abroad, this is a great opportunity, especially if you can be really strategic about the time that you spend in mainland USA. Act 60 is somewhat complex. You want to definitely dive in deeper in here. I know a lot of people that have taken advantage of this and love living in Puerto Rico, but the tax savings is quite significant. And it's basically one of the only legal ways that an American citizen that does not renounce their citizenship can save on taxes in a significant way. If you're not making a few hundred thousand dollars at least a year, this is likely not worth your time to pursue. But if you are making north of that and you want to take advantage of this, it does start to make sense because there are some other things that we need to do. So you need to be able to have and prove that this is your primary place of work. Your business is in Puerto Rico, your connections are in Puerto Rico. So your doctor, your church, your friends, the groups, these are the two or three things that people are going to look at, especially the irs, to make sure that you don't get audited. And if you do get audited, that you can prove that you are a Puerto Rican resident. So there's a variety of mechanisms that you need to do, like getting voter registration, mailing address, social, community ties, as we mentioned. And you also will need to donate to a local nonprofit while this is happening. And so essentially every year there is a donation that needs to be made to a Puerto Rican not for profit as part of this program. And so this is a very, very unique program that got renewed. There's a lot of changes that people have talked about over the years of what is happening with Puerto Rico as a territory of the United States. And, and its program is still available for people to take advantage of. And there's a lot of famous people that have done this program specifically, notably Jake Paul, the Paul brothers, they live in Puerto Rico. A lot of crypto millionaires live in Puerto Rico, in some cases crypto billionaires. And so a lot of people have done this. I have had friends that sometimes have gone through the process of actually selling a company of theirs and in order to get the deal to work and the finances to work, have moved to that country in order to make the deal happen. And so it is a very powerful tool if you are in the right circumstance. You know, the things for you to know is that the infrastructure in Puerto Rico isn't quite as developed as the United States. Obviously it has a lot of the benefits that the United States has, but you are going to have to take some of those differentiators from living on an island versus mainland. So, you know, it's a great place. Check it out. Definitely one of the best tax havens. I considered it myself and so definitely would check it out. Now for those of you that are looking for other opportunities, we are going to talk about them specifically if you are open to even renouncing your U.S. citizenship. Now this may not make sense for most people, but there are some famous cases of guys like Eduardo Saverin who renounced his United States citizenship. He was one of the co founders of Facebook and have seen other very well notable 7, 8 figure, 9 figure entrepreneurs do the same and move to places like Dubai that has zero income tax. This is a pretty significant thing to do. You know, you can't take it back. And so, you know, we wanted to talk about the Puerto Rican opportunity first, because that is one of the ones that you would not have to do that if you are living overseas. You know, you may be living in a country in Europe that has a ton of taxes. And whereas countries like Portugal have zero wealth tax and no inheritance tax, Dubai famously zero income tax. I mean, the difference here is very significant when you're talking about if you were earning 100, 200, 501 million plus dollars a year, this is really, really significant, especially if you look at the concept of compounding interest. And we're going to talk about that here in a second just to show as an example of what the savings could look like, whether you take the advantage of the Puerto Rican Act 60 or something like, you know, if you're moving to Dubai and you're an overseas citizen. So I just want to show an example of why this is such a big thing, especially in these ultra wealthy communities, especially for people that are going to have these big exits or are, you know, making a certain amount of money to make this worthwhile and why we'd ever go to the means of potentially renouncing your U.S. citizenship. So, so if you don't know about the concept of compounding interest, there's a ton of information out there. Probably one of the biggest advocates in the world, most famous around compounding interest is Warren Buffett. This guy has obviously really proven himself, especially over the last few months here in the United States. We've had a ton of chaos in the markets. This is the only person that has actually gotten richer during the tariff issues that we've had faced here in the first quarter of 2025. And he has this entire concept around compounding interest and would highly recommend you checking that out on your own. But the concept of compounding interest is really important when we're talking about saving money on taxes and really anything in your life, but especially in these big outcomes. So let's say that you're an entrepreneur and you're going to sell your company as an example and you decided to move into Puerto Rico maybe a couple years before or something like that while you're building this business or you're thinking about building your next business. This is why you may want to do it. And we're just going to use some very simple numbers here. So, so that you can see the impact, right? So say that you're going to sell your business for $4 million. The approximate tax that you're going to pay on this cap gains wise federally in the United States is going to be a little, it's going to be close to a million dollars, right? Might be a little bit more. But I just want to keep very simple numbers here. And so effectively you're going to take home $3 million, which is nice. You know, you're paying a million dollars. This is just federal. If you live in California, if you live in a state with high income tax or income tax in any capacity, you're going to also pay another 10%. Right? In the case of California, that could be up to 400k. So you're paying $1.4 million. Okay. And so you know, effectively you can get anywhere from 2.6 million to 3 million net. Right. And you were basically paying the government $1.4 million in taxes. Now what you can do, if you want to be intelligent and you are interested in taking advantage of one of these hacks, is that the cap gains rate of this, if you did it in time, you did it in that two year window. Because there is a window. You can't just like decide next week, hey, I'm going to sell my company next week, I'm going to move to Puerto Rico. It doesn't work like that. You have to pre plan some of these things at least a couple years in advance so you can prove that, hey, this, a lot of this growth happened over time. But you can effectively save 1 to $1.4 million depending on your stay. Now just for the sake of math, let's just use the $1 million example and say that we're in 2025 and you know, you're 40 years old and you're going to sell your business for $4 million. And so essentially, you know, that million dollars, what is that worth by the time you're 70, right? So 30 years over time with the concept of compounding interest. Now if you take 8% interest rate, which is a pretty reasonable conservative interest rate of compounding interest rate growth, what that will equal after 30 years of being applied to the market for this one year that you decided to take advantage of this milestone is $10 million. It's a 10 million and like $62,000, something of that nature, right? So you know that is significant, right? That is a, that's your, that's your entire retirement here for that $1 million just in tax savings, right? This isn't the entire thing. This is not the entire $4 million. If we're talking about applying it here that you know that you could 4x that number, right? So that's even more money. The point is though that $1 million in savings could be 10 million. And that's just one year. So think about it. The next business you built, right, or the next opportunity, or now the stocks that you're gaining. Because all of these gains, in theory, if you stayed in Puerto Rico, would also be tax free. So you know, this is why people take advantage of this. Especially you know, in these cases where you have people that are having multi billion dollar outcomes, why they may be interested in renouncing their citizenship because it's saving them billions of dollars and they're not thinking about the time value of money in that year alone. They're thinking about that over the course of the next 30 years compounded. And that's where you get these insane figures. Now, there are other ways to save money on taxes. There are other ways to be intelligent about how you do taxes, but this is a way that significantly reduces it and that potentially could work with your lifestyle depending in your circumstance. So that's why people take advantage of it. If it's interesting for you, please check it out and dive in deeper with the resources that we've posted in the comments. So while most people are stuck in one country paying top tax rates, the wealthy are living around the world and keeping more of what they earn and building generational wealth faster. You don't need to escape the system, you just need to understand how to move within it. That's the difference. If this sounds interesting to you, join our free community. You don't need to be rich to live like the 1%. You just need to learn what they do. This is universal basic knowledge.
