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Puerto Rico Act 60 Tax Incentives
Though well worth the time and effort required, obtaining any Puerto Rican tax decree means going through a complex process.
Take it from us – obtaining a Puerto Rico tax break can be prolonged and frustrating! It can also be quite expensive. Our founders’ business relocation utilized 3 different legal firms, 4 different CPAs, and far more of our time than they preferred. This process diverted energy and attention away from running their business – which no busy entrepreneur can afford.
Our team makes it easy for you. We can provide as much management of the process as you elect to outsource – from a little consultation to managing the whole thing, start to finish.
Our tax incentive consulting services include but are not limited to:
- Insurance / Re-insurance (was Act 399)
- Private Capital Funds
- Infrastructure / Green Energy
- Agriculture
- Young Entrepreneurs
- Opportunity Zones
- Tourism Projects
- Film / Creative Industries
- Aerial / Maritime Transportation
- Cruise Industry
Export Goods and Services
formerly called Act 20
The Export Goods and Services Incentive was originally created to bring international business to Puerto Rico. Corporate income is eligible for goods sold or services performed from Puerto Rico for clients located outside of Puerto Rico.
Benefits include:
- 4% Corporate Tax Rate (2% in some circumstances)
- 0% tax on owner profit distributions / dividends
- 75% exemption from property taxes
- 100% exemption on municipal taxes during the first 5 years
- 15-year grant, with a possible 15-year extension
Individual Investors
formerly called Act 22
The Individual Investors Incentive provides tax exemptions to eligible individual investors with their primary tax home and residence in Puerto Rico. Act 22 grantees who are also US citizens would also pay no IRS tax on passive income accrued after becoming residents of Puerto Rico. Includes crypto-currency!
Benefits include:
- 100% tax exemption from Puerto Rico income taxes on dividends
- 100% tax exemption from Puerto Rico tax on interest income
- 100% tax exemption from Puerto Rico on long-term capital gains
- 100% tax exemption from Puerto Rico on short-term capital gains
R&D and Manufacturing
Formerly called Act 73
The Economic Incentives for the Development of Puerto Rico Act offers tax advantages to research and development activities, as well as manufacturing.
Benefits include:
- 4% fixed corporate income tax rate
- 0% or 1% income tax on endeavors categorized as “pioneer industries”
- 0% tax on owner profit distributions / dividends
- Tax credits for jobs created
- Tax credits of up to 25% of products manufactured in Puerto Rico
- Tax credits of 50% of qualified investment
Tourism
hotels, casinos, theme parks, and more
The Visitor’s Economy Incentive encourages the development of many types of construction and activities geared toward the tourism industry.
Benefits include:
- 4% fixed income tax rate
- 0% tax on owner profit distributions / dividends
- 75% exemption from municipal taxes
- 100% exemption on sales tax for operational items / equipment
- Tax credit of 30-40% based on expenses toward acquiring and building the project, from the date the application is filed
Tax Incentive Application Process
We provide and facilitate consulting to optimize your strategy, including business structure and which tax incentives are right for your situation. There are often multiple options, and we can explore them all with you.
Also, for some new Puerto Rico businesses that provide services for businesses also owned by the same people outside of Puerto Rico, it may be necessary to ensure that the Puerto Rico business is being paid a fair price for its services. Business owners in this situation may need to consider the matter of transfer pricing.
For all of the Puerto Rico tax incentives, it is necessary to ensure you understand and monitor compliance with residency requirements.
- Consultation regarding what Puerto Rico tax incentives are appropriate for you.
- Retention of professional advisors to advise on any business structuring needed.
- Assistance in finding a Puerto Rico business location.
- Formation of new Puerto Rico corporate entities as required.
- Writing and filing of tax incentive applications.
- Follow through as the applications are processed, coordinating with government agencies as needed until the incentives are in hand
. Advis e and assist with any questions that Puerto Rico government agencies may have in processing your application.- Obtain the business licenses and certificates needed to ensure your compliance with government requirements.
- Identify appropriate professional service providers to maintain grant compliance ongoing.
- Ensure that you understand the compliance requirements to protect the integrity of your grant.
Act 60 Law
Should you wish to read the actual text of the Act 60 law, we have uploaded the English translation to this link. There are periodic amendments to this which modify it a bit or provide clarification on various points, but this is the baseline law that encompasses all of the tax incentive programs.
We Can Help
Take advantage of Puerto Rico’s incredible tax breaks! 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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