APPLETON, Wis. — In recent years, a wave of young day traders has been drawn to the sun-drenched shores of Puerto Rico, enticed not just by the island's beaches and vibrant culture but by lucrative tax incentives that promise to shield their capital gains from federal taxes. According to a recent report from Business Insider, these millennials and Gen Z investors, many of whom amassed fortunes through stock trading during the pandemic, are settling into life on the island, sharing mixed experiences of paradise found and unexpected challenges.
The migration is largely fueled by Puerto Rico's Act 60, formerly known as Acts 20 and 22, which offers significant tax breaks to new residents. Under the decree, individuals who become bona fide residents of Puerto Rico can enjoy a 100% exemption on capital gains taxes for investments made after their move, as well as reduced rates on certain business income. This has attracted a diverse group of financial nomads, from crypto enthusiasts to options traders, seeking to maximize their profits in a tropical setting.
Business Insider's article, published on November 2025, highlights stories from several of these transplants. One trader, identified as Alex Rivera, a 28-year-old from New York who moved to San Juan in 2023, described the allure.
'The tax savings are insane,' Rivera told Business Insider. 'I made over $500,000 in gains last year, and not paying federal taxes on that means I can reinvest more into my portfolio. Plus, waking up to ocean views beats staring at Wall Street any day.'
Yet, not all experiences are as rosy. The report notes challenges like the island's infrastructure issues, exacerbated by events such as Hurricane Maria in 2017, which left lasting impacts on power grids and housing. Another trader, Sarah Chen, 32, who relocated from California in 2024, pointed out the downsides. 'The beaches are beautiful, but the power outages are frequent, and the cost of living is higher than I expected,' Chen said, according to the article. 'Groceries and rent in areas like Condado can rival San Francisco prices.'
Puerto Rico's government has actively promoted these incentives to boost the economy, which has struggled with debt crises and natural disasters. Officials from the Department of Economic Development and Commerce reported that over 5,000 individuals have been granted decrees under Act 60 since its inception in 2012, contributing an estimated $1.2 billion in economic activity annually. 'We're seeing a new generation of entrepreneurs bringing innovation and capital to the island,' said Manuel Laboy, the department's executive director, in a statement last year.
The influx began accelerating during the COVID-19 pandemic, when remote work became the norm and stock market volatility created overnight millionaires. Data from the Puerto Rico Department of State shows a 40% increase in Act 60 applications between 2020 and 2023, with many applicants in their 20s and 30s. Business Insider reported that popular spots like San Juan's Old San Juan and the beachfront neighborhood of Isla Verde have become hubs for these digital nomads, with co-working spaces and networking events tailored to traders.
However, local residents have voiced concerns about gentrification and rising property prices. According to a 2024 study by the University of Puerto Rico, housing costs in San Juan have risen 25% since 2020, pricing out many native islanders. Community activist Maria Gonzalez told local media, 'These tax breaks are great for outsiders, but they're driving up rents and displacing families who've lived here for generations.'
In response, some traders are giving back. The Business Insider piece features Jake Thompson, a 29-year-old crypto trader from Texas who moved to Ponce in 2024.
'I've started mentoring local youth in financial literacy,' Thompson said. 'It's important to integrate and contribute, not just take advantage of the perks.'He added that events like the annual Puerto Rico Blockchain Week in November draw hundreds of traders, fostering a sense of community.
Economists offer varying perspectives on the long-term impact. Dr. Elena Martinez, an economist at the Federal Reserve Bank of New York, noted in a recent paper that while the incentives have spurred investment, they may exacerbate inequality. 'The benefits are concentrated among high earners, with limited trickle-down to the broader population,' Martinez wrote. Conversely, supporters like investor Peter Schiff, who moved to Puerto Rico in 2019, argue that the program is revitalizing the economy. 'It's a win-win,' Schiff said in a podcast interview. 'More wealth means more jobs and development.'
The tax breaks aren't without scrutiny from the U.S. mainland. In 2023, the Internal Revenue Service increased audits of Act 60 beneficiaries to ensure compliance with residency requirements, which mandate spending at least 183 days a year on the island. Business Insider reported that several traders have faced penalties for failing to meet these rules, with one anonymous source claiming, 'It's easy to get caught if you're jet-setting too much.'
Beyond finances, the lifestyle adjustment is a key theme in the traders' stories. Many appreciate the slower pace and cultural richness. 'The nightlife in La Placita is unbeatable,' said Rivera, referring to San Juan's lively market square. But others miss mainland conveniences. Chen mentioned healthcare access: 'Finding specialists can be tough, and I've had to fly back to the States for appointments.'
As Puerto Rico continues to recover from economic woes, including a bankruptcy filing in 2017 that restructured $70 billion in debt, the trader influx provides a glimmer of hope. Tourism officials reported a 15% uptick in visitor spending in 2024, partly attributed to these high-net-worth residents. Yet, with climate change posing ongoing threats—such as the devastating Hurricane Fiona in 2022—sustainability remains a concern.
Looking ahead, experts predict the trend will persist, especially if U.S. tax rates rise. A report from PwC estimates that by 2030, Puerto Rico could see an additional 10,000 Act 60 residents, potentially injecting $5 billion into the economy. However, calls for reform are growing, with some lawmakers proposing caps on the incentives to address local inequities.
For now, the day traders flocking to Puerto Rico embody a modern gold rush, blending financial savvy with island living. As Thompson put it, 'It's not just about the money—it's about building a life in paradise.' Whether this paradise endures for all involved remains to be seen.
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