Puerto Rico Tax Incentives

Never before has it been more financially beneficial to take up residence in Puerto Rico. Puerto Rico shares a common currency, common military defense, and citizenship with the United States. Additionally, all federal laws apply to Puerto Rico and passports are not required to travel to and from the U.S. mainland. Because Puerto Rico enjoys fiscal independence and autonomy, it is able to offer attractive tax incentives that encourage businesses and high net worth individuals to establish residence on the island.

Act 60

Export Services and Commerce

Chapter 3 of Act 60 encourages companies to establish and expand export services off the island. Many service industries can benefit, including research and development, advertising and public relations, call centers, consulting, corporate headquarters, investment banking and other financial services, engineering services and more. If eligible, corporations can enjoy an income tax rate of 4% or less on net income derived from the exempt operation. Additionally, distributions of dividends or profits generated by the exempt operation are 100% exempt from Puerto Rico income tax. Other real and property tax exemptions may apply depending on the volume of business.

Individual Investors

Chapter 2 of Act 60 provides new residents of Puerto Rico (as of January 12, 2012) total tax exemption from Puerto Rico and federal income taxes on all passive income accrued after becoming a bona fide resident. Only those new residents, who were not residents in the six years preceding the act, are eligible for these incentives. Those qualified benefit from 100% income tax exemption on all dividends, interest and capital gains.

Additional Incentives

Puerto Rico has many other tax incentives for business endeavors. Industries related to manufacturing, agriculture, creative services, financial services, hospitality and education can also take advantage of other financial incentives available in Puerto Rico.

Find Out More about Act 60

But beyond the stunning scenery and near-perfect weather (how does 80 degrees in January suit you?), there are plenty of other reasons why investing in Puerto Rico makes a lot of sense. To start, the island offers tax incentives that are attracting many wealthy individuals and businesses to Puerto Rico. Find out more about Act 60 incentives and how they could be of great benefit to you.