Capital city: San Juan
Currency: United States dollar (USD)
Language: Spanish and English
GDP: USD$125.8 billion
GDP per capita: USD $36,877
Puerto Rico is an unincorporated territory of the United States located in the northeast Caribbean Sea. Puerto Rico means ‘rich port’ in Spanish and is also known as ‘la isla del encanto’ (meaning ‘the island of enchantment’). The island's name was changed to ’Porto Rico’ by the United States after the Treaty of Paris in 1898.
Originally populated by the indigenous Taíno people, the island was claimed in 1493 by Christopher Columbus for Spain. At the beginning of the 16th century, the Spanish people began to colonise the island. On July 25, 1898, during the Spanish–American War, the U.S. invaded Puerto Rico with a landing at Guánica. As an outcome of the war, under the Treaty of Paris, Spain ceded Puerto Rico to the U.S.
Puerto Ricans are by law natural-born citizens of the United States, and may move freely between the island and the mainland, but do not vote in US elections. Constitutionally, Puerto Rico is subject to the plenary powers of the United States Congress under the territorial clause of Article IV of the U.S. Constitution.
The United States code gives Puerto Rico its own independent tax-levying authority and as a consequence, Puerto Rico has its own tax laws. That said, the individual tax rate is an attractive 4%. In addition, Puerto Ricans do not have to pay the US federal personal income tax on income sourced from Puerto Rico. Their US income is taxable (although they may get a credit for any Puerto Rican taxes paid on that income).
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2