Charity Donation Requirements

Charity Donation Requirements

Most Puerto Rico investors who apply for Act 60 or Act 22 must donate to a Puerto Rico charity each year.

Note: there is no charity requirement for business owners if you chose not to pursue the Investor incentive.

Rules for Act 60 and Act 22 Charitable Donations

  • Under Act 60, Investors are required to donate at least $10,000 annually, starting in their second year.
    • $5,000 of this must go to a charity on the CECFL list. This indicates it is an approved non-profit that helps to alleviate child poverty in Puerto Rico.
    • The other $5,000 can go to any approved PR non-profit (certified under 1101.01 of the PR law, which is equivalent to 501(c)(3) in the mainland US).
    • As organizations on the CECFL list are also qualified non-profits, it is acceptable to donate the full $10,000 to a CECFL charity. Note that there is some conflicting information on this point on some websites – see below for more details.
  • Many Act 22 Investors also have a requirement to donate $5,000 annually to PR charities.
    • No portion of this is required to go to a CECFL non-profit.
  • For all Investors, there are a few additional rules:
    • The charity cannot be an organization that is owned or controlled by the investor who is donating, or by that investor’s spouse or partner, descendants, or ascendants.
    • You can donate to multiple charities or to just one, as long as the total adds up to at least the minimum required under the Investor program you are in.
    • The deadline each year to complete your donations is December 31 of that year.
    • Receipts must be retained in your records to show evidence of the donations.

Can the full Act 60 donation can go to a CECFL organization?

Yes, it can. Some experts understand the Act 60 law to mean that only half can go to a CECFL charity. Sometimes tax and legal professionals interpret the law differently from the attorneys who work for the PR government. It’s important to find out how the PR government views the law.

Because there is differing professional advice on this point, we consulted with a DDEC attorney for clarification. DDEC is the PR department that administers the tax incentives program. DDEC advised us that investors can allocate the full $10,000 donation to a CECFL entity if they choose.

How do you find a Puerto Rico charity you can trust?

Sites such as Guidestar can help you to identify if a non-profit is transparent in their spending. We prefer to research charities before donating, to ensure that the non-profit has a good, honest reputation. After careful consideration, Puerto Rico Advantage has chosen to endorse Tech My School and is evaluating other non-profits for possible endorsement. You can find out more by downloading a recent webinar we hosted in partnership with Tech My School, or by watching a recording of it posted to YouTube.

Frequently Asked Questions About Puerto Rico

Frequently Asked Questions About Puerto Rico

Below are some of the most common questions we hear from people considering Puerto Rico as a relocation destination. Contact us for more details, and for a free consultation about your unique situation.


Doesn’t Puerto Rico Have a High Crime Rate?

Puerto Rico’s issue has more to do with public relations than actual crime! This image is partly formed by cultural stereotypes and political history.

Like everywhere else, Puerto Rico’s crime rate varies depending upon what area you happen to be in. Its metropolitan areas tend to be higher, especially in less wealthy parts of town. However, it can be argued that the crime in the cities is comparable to US cities. For example, Puerto Rico’s murder rate is half that of Washington DC and Detroit. If Puerto Rico were ranked for safety as if it were a State, it would be 19th in the list.

For those who are relocating and want an extra degree of protection, there are a number of gated community options that are extremely safe.


What is the Food Like in Puerto Rico?

The local cuisine is Spanish with Caribbean accents. It is heavy in meat, particularly pork, and moderately spicy, though typically less spicy than what you might find in other parts of Latin America. As in many “island” cuisines, sweet and coconut flavors can be found in many dishes. Plantains are a major staple.

Dining out, we have found that while many fine options exist in Puerto Rico, good restaurants featuring Asian cuisines, in particular, are rare.

Grocery stores are plentiful, and the locally grown food is inexpensive. For organic food, and other items that are not produced on-island, you may have to go to specialty stores, where the prices are higher.


Is it Safe to Drink the Water?

The tap water is considered safe to drink in Puerto Rico, as the sanitation standards are the same here as in the States.


Is it Necessary to Learn Spanish to Live in Puerto Rico?

The great news is that it is not necessary to learn Spanish to relocate to Puerto Rico!

Both Spanish and English are official languages in Puerto Rico. Most government forms and official sites, as well as most menus and other things you might need to read, are available in English. Also, most service providers and customer service representatives are either fluent in both English and Spanish, or at least know enough English to get by.

However, you will almost definitely encounter some people who speak little to no English. For these encounters, it can be helpful to learn at least a little conversational Spanish, though we have never yet encountered a situation when it was absolutely necessary. Puerto Ricans are generally very friendly and accommodating of a limited Spanish vocabulary; rather than being judgmental or impatient, as some cultures can be in this type of situation, the folks in Puerto Rico usually appear to us to graciously appreciate whatever genuine effort you can make.


What is the Cost of Living in Puerto Rico?

The cost of living varies depending upon the area in which you live. Gated communities tend to be more expensive for real estate, and the dining and entertainment in those areas are also pricier. However, people who move to more expensive areas in Puerto Rico may well have lived incomparably expensive areas prior. There are many areas to live which are still desirable and safe, but affordable.

Gas tends to be just slightly more expensive in Puerto Rico than in the States. (Also note that it is sold in liters rather than gallons, which can be confusing at first.) Electricity is currently about twice the price; however, there is never a need to heat your living space here, and while you may choose to run your air conditioner more, fuel efficient inverter air conditioners are common in most modern homes.

Food can be more expensive, particularly if you prefer to buy organic products, as there is currently very little organic farming happening in Puerto Rico. Other items that must be imported may cost more as well.

Here is a cost of living comparison tool which may give you a good idea of what you might expect, based on an average price for living in Puerto Rico, compared to wherever you may be moving from.


What would happen if Puerto Rico Became a State?

If Puerto Rico became a US State, its residents would become subject to US federal tax. This almost completely eliminates the benefits of the tax incentive Acts, as the low Puerto Rico tax would then become a state tax, owed in addition to what must be paid to the IRS.

It should be noted, however, that the people of Puerto Rico have declined Statehood, by public referendum, on more than one occasion in the past. Many Puerto Ricans are proud of their independence; Puerto Rico competes as its own country in the Olympic Games. Also, with so many of the population living in poverty, few are eager to accept the additional tax burden for many that would come with Statehood. Finally, it appears to us that many Puerto Ricans are savvy about the prospects for economic recovery, growth, and prosperity made possible by the Commonwealth’s unique legal status. Though Statehood may be inevitable at some point in the farther future, we judge it to be unlikely in the near term.

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

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