“Remittances to tax havens” – Puerto Rico Doling Out Millions to the Cayman Islands, Switzerland and the UK
It was widely assumed that the Dominican Republic was the leading destination for remittances from Puerto Rico, however, more surprising data has been recently unveiled. According to data from the National Multi State Licensing System (NMLS), the Cayman Islands received a staggering 14.5 million transactions totaling $5.6 billion, making it the highest remittance recipient from the island.
Following close behind, the United Kingdom accounted for two million transactions totaling $762 million, with Switzerland also making the list receiving one million transactions totaling $493 million. Additionally, the British Virgin Islands (BVI) received 1.9 million transactions amounting to $454 million. All three tax haven jurisdictions are recognized for their zero corporate tax policy, strict confidentiality laws, minimal regulatory supervision and ease of incorporation which makes them an attractive destination for remittance transactions, as confirmed by financial lawyer, Rafael Ferreira Cintrón.
Natalia Zequeira, commissioner of the Office of the Commissioner of Financial Institutions (OCIF) provided insight into the matter, stating that the volume of transactions in the Cayman Islands is closely linked to digital assets, with $5.6 billion of the total $9.3 billion remittances being processed by Coinbase, a digital asset exchange platform. There have been public concerns that these transactions may be utilized for tax evasion or money laundering. Despite the uncertainty, it is clear that the Cayman Islands and other jurisdictions have become the go-to places for remittance transactions, raises concerns about tax evasion and money laundering, which is an issue that still needs to be addressed.