John Paulson loves Puerto Rico.

The billionaire hedge-fund manager has bought municipal debt of the commonwealth, invested in its hotels and is building a vacation home in one of its most exclusive resorts. Paulson’s firm is working on 10 real estate deals in the territory known for its low taxes, according to Alberto Baco Bague, secretary of economic development and commerce for Puerto Rico.

“Puerto Rico will become the Singapore of the Caribbean,” Paulson, 58, said yesterday at the 2014 Puerto Rico Investment Summit in San Juan, a conference designed to promote the territory and attract investors. “Opportunities to buy real estate here won’t last much longer.”

Paulson & Co., which is based in New York and oversees $22.8 billion, is adding to its Puerto Rico investments as the commonwealth and its agencies wrestle with a $73 billion debt load and an economy that’s shrunk in five of the past seven fiscal years. The three biggest ratings companies cut the island’s credit ranking to junk earlier this year.

Paulson’s firm is on track to invest $1 billion in the territory over the next two years through land purchases and properties to be torn down and rebuilt, Bague said in an interview yesterday. He said Paulson, who helped come up with the idea of the conference, will announce one of the deals within eight weeks.

Armel Leslie, a spokesman for Paulson with WalekPeppercomm, declined to comment on Baco’s remarks.

Capital Gains

Under a 2-year-old Puerto Rican law, new residents pay no local or U.S. federal taxes on capital gains, a move designed to lure wealthy residents. Singapore, the most-expensive Asian city for luxury homes after Hong Kong, according to property broker Knight Frank LLP, has a top tax rate of 20 percent and has encouraged hedge-fund firms to set up in the city-state.

Paulson, who briefly considered moving to Puerto Rico to take advantage of the tax law before abandoning the idea, said in yesterday’s speech that he’s seeking to develop sites to serve people he expects to relocate here because of the legislation.

The firm took a stake in the St. Regis Bahia Beach Resort and the Bahia Beach Resort & Golf Club in September. Paulson & Co. bought resort complex La Concha Resort and the Condado Vanderbilt, neighboring beach-front hotels in the capital city of San Juan, last month for $260 million, including costs to complete construction of the Vanderbilt.

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