Act 60 Tourism Incentives Puerto Rico, Explained for Entrepreneurs Who Actually Build Things Puerto Rico’s Act 60 Tourism Chapter isn’t just for major hotel chains. It’s a powerful tax framework built for the entire visitor economy, from mountain glamping to nautical charters. When Mateo first walked his family’s acreage in the mountains of Utuado, he didn’t see just a coffee farm. He saw a destination. He envisioned luxury tents above the clouds, farm-to-table dining, and guided agrotourism tours: a business built around the land he already owned. What he didn’t immediately see was the legal and financial framework that would make it bankable. Like most Puerto Rican entrepreneurs, Mateo initially dismissed Act 60’s Tourism Chapter as something for billion-dollar hotel chains, not a startup in the cordillera. He also thought maybe he could turn to short-term rentals. The turning point came when he sat down with me and realized Puerto Rico’s Act 60 tourism incentives weren’t written just for the Ritz and there is a better way to do tourism in Puerto Rico than with AirBnB. Act 60 was written for the visitor economy, i.e. businesses that support tourism (from locals and foreigners). Every business that contributes to why people visit Puerto Rico, and spend money while they’re here, has a seat at this table. What Actually Qualifies as “Tourist Activity” On the lodging side, the qualifying designations are broader than most entrepreneurs expect. Traditional hotels and condohotels qualify with a minimum of fifteen units, a front desk, and employment requirements. Posadas Puertorriqueñas and Guest Houses operations with seven or more units. Bed and breakfasts (minimum three rooms, resident owner, breakfast required). For those building in the agricultural space, agro-lodging, which refers to accommodations with three rooms integrated into a property operated by a bona fide farmer with a tourism incentive extension, is also an eligible designation. Glamping operations with seven or more units qualify, as do tourist villas, defined as a minimum of seven separate units. Hostels with twelve or more beds and one room, round out the lodging side. The experience side is equally broad. Nautical tourism operations such as vessel charters and jet ski rentals qualify, as do tourist marinas. Agrotourism tours on bona fide agricultural land, theme parks, golf courses operated by or associated with a qualifying hotel, casinos operated within a qualifying tourism project, and medical tourism facilities serving patients traveling from around the globe are all eligible as well. And if a project doesn’t fit neatly into any of those categories, there is a catch-all provision under Section 5(i): the Secretary of DDEC has discretionary power to qualify facilities or activities that significantly stimulate the visitor economy. Also, important to note that lenders and property owners that rent their property to tourism developers can also benefit from incentives. Hotels Condohotel Bed and breakfast Posada Guest House Touristic Villa Agrotourism Paradores Vacation Club Glamping Golf course Nautical Tourism Tourism Marina Medical Tourism 15 year contract 4% Income Tax 0% Distributions 75% exemption on real and personal property taxes (CRIM) 50% exemption on municipal taxes (patente) 100% exemption on SUT 100% 4% capital gains 12% royalties The Decree: Your Tax Environment, Contractually Guaranteed Accessing Act 60’s benefits requires obtaining a tax exemption decree, a formal binding contract with the Government of Puerto Rico protected by the constitution. A decree typically runs 15 years with the option to renew for an additional 15. For a startup navigating unpredictable early revenue, that kind of stability is itself a strategic asset. Under the Tourism Chapter, a qualifying business enjoys a 4% fixed income tax rate on eligible tourism income. For businesses with annual revenue under $3 million in their first year, the PYME (Small and Medium Business) designation reduces that rate to 2% for the first five years, a meaningful advantage during the period when cash flow is most constrained. The income tax rate is only part of the picture. The decree also provides a 100% exemption on dividends, meaning profits distributed to the owner are not taxed at the individual level. For overhead, the law offers a 75% exemption on real and personal property taxes (CRIM) and a 50% exemption on municipal taxes (patente). For operations under construction, the 100% sales and use tax and excise tax exemption on qualifying goods, services, and 75% exemption on construction materials can represent a significant reduction in build-out costs. Tourism: Non-Dilutive Capital for the Build Tax Credits While the decree protects what you earn, Tourism Investment Tax Credits help fund the project itself. Think of these as government-issued certificates with a specific dollar value tied to your qualifying investment: non-dilutive capital that doesn’t require giving up equity. Under Act 60, entrepreneurs choose between two credit structures based on their cash flow needs. The 30% Tax Credit Option is front-loaded and favored by projects with significant upfront construction costs. An initial 10% of the credit is released upon obtaining financing, with the remaining 20% distributed in three parts starting at the anniversary of the first guest’s arrival. The 40% Tax Credit Option offers a larger total credit but is back-loaded: the entire 40% is distributed across three equal installments beginning only after that first anniversary of the commencement of operations and first guest stay. Choosing between them is a function of when the project needs capital most. Larger projects or those that the construction may take years will often prefer the 30% structure for its earlier liquidity. A project with lower construction costs but higher operational ramp-up may find the 40% structure more advantageous over time. Three Ways to Turn Credits into Cash Sophisticated operators do not wait for a tax liability to monetize these certificates. There are three primary paths. The most straightforward is direct offset: applying the credit against the business’s own Puerto Rico income tax liability, dollar for dollar. Alternatively, the tax credits can be sold on the secondary market to a third-party taxpayer for cash, which is the most common route. Conservative underwriting typically assumes 90 to 92 cents on the dollar, though peak demand around tax season has driven secondary market pricing as high as 94 to 95 cents. For those
Tax Season Started. Are you ready?
How 480s can keep more money in your pockets Puerto Rico’s tax compliance has many steps; income tax returns, volume of business returns, CRIM personal property return, DOS and DDEC annual reports, informative returns, DTRH returns, and federal returns. Please take this as a reminder that there is an upcoming deadline for your required informative returns (Forms 480). WHAT ARE FORMS 480? Forms 480 are Puerto Rico informative returns, similar to U.S. Forms 1099. They report payments made by a business to vendors, service providers, and other payees during the year. Filing some of these forms is not optional, they are a statutory compliance requirement under the Puerto Rico Internal Revenue Code. For example, you are generally required to file a Form 480.6SP for any professional service provider you paid in excess of $500 and include the amounts withheld or the withholding waiver. Additionally, if Alternative Minimum Tax (AMT) applies, reporting may be required starting at $1 to preserve the deduction. There are also other Forms 480, including but not limited to those applicable to technological tools and subscriptions, royalties, advertising expenses, insurance premiums, among others. WHY ARE 480s CRITICAL? The Puerto Rico Internal Revenue Code conditions the deductibility of many business expenses on the proper and timely filing of the required Forms 480 and, when applicable, the remittance of withholding taxes. Additionally, if you are applying for tax credits under an incentives decree (including Act 60), Forms 480 are an essential part of the AUP evaluation of the compliance process. Failure to file the required 480s may result in the disallowance of expense deductions, even if the expenses were legitimately incurred. WHO MUST FILE AND WHEN? • One Form 480 must be filed by the Company per vendor for payments made during the 2025 tax year. • Filing deadlines vary by form; however, most Forms 480 are due on or before February 28, 2026. Confirm applicable deadlines with your tax preparer. PENALTIES FOR NONCOMPLIANCE. Noncompliance carries significant penalties: • $500 per form for late filing. • $500 per form for failure to file. Penalties apply per vendor, per form. IMPORTANT REMINDERS • Filing Forms 480 is separate from issuing invoices or paying vendors. • Certain payments require withholding unless a valid waiver or certificate of relief applies. • Payments for services rendered by individuals, corporations, and partnerships are generally reported on Form 480.6SP. ACTION REQUIRED. You must contact your tax preparer immediately to: Review all vendors and service providers paid during 2025; Prepare and file all required Forms 480; and Ensure that deductions and tax credits are not jeopardized due to noncompliance. Discuss with your tax preparer about your filing obligations and submitting the required forms accurately and on time. This will enable you to keep more money in your pocket by being compliant. This communication and the attached information are provided for reference and coordination purposes only. Please note that Izquierdo Law LLC is a law firm and does not preparer tax filings. We can provide you with contact information for tax preparers, if you do not have one.
Critical January 30th Deadline for Act 60 Annual Report: Are You Compliant?
Critical January 30, 2026 Deadline for Act 60 Annual Report Compliance What decree holders need to know now If you hold an Act 60 decree in Puerto Rico, the January 15, 2026 deadline for filing the 2024 Exempt Business Annual Report, also known as the Informe Anual Exento (IANE), has now passed. The focus is no longer on extensions. It is now on avoiding penalties and protecting your decree. What is the IANE and why it matters The IANE is a mandatory Act 60 compliance filing submitted through the Incentives Portal. It is how the Puerto Rico Department of Economic Development and Commerce (DDEC) verifies that a decree holder continues to meet the terms and conditions of its Act 60 decree. This filing is separate from the Puerto Rico income tax return and is required even if the tax return was extended. Prior to this year, the Incentives Portal was not enabled for all decree holders under Act 60. This limited which taxpayers could comply electronically and created uncertainty for decree holders under other incentives programs. Historically reporting was only enabled for Act Nos. 73-2008, 20-2012, 22-2012, 135-1997, and 83-2010, as amended (“prior incentives laws”). DDEC Informational Bulletins No. DDEC 2025-007, 2025-008, and DDEC 2025-016 changed this. Now decree holders of Young Entrepreneurs, Scientists, Doctors, Tourism businesses, Private Equity, Historical Zones, Assisted Living, Social Interest Housing, Agroindustries and Bonafide Agriculturer, Film, Air and Maritime Transportation, and Cruise ships can and must file the annual report via the incentives portal. What happens now that the compliance deadline has passed and the January 30 relief window applies Under DDEC Informational Bulletin No. DDEC 2025-016, decree holders who did not file the 2024 IANE are considered non-compliant. DDEC has provided a short relief period, but it is closing quickly. If the IANE is filed on or before January 30, 2026, the non-compliance notice is voided and no automatic penalty applies. This is the final opportunity to file the IANE without financial consequences. Penalties and decree risk after January 30 If the IANE is not filed by January 30, 2026, enforcement escalates: Revocation can result in the loss of Act 60 benefits and the application of regular Puerto Rico income tax rates, which can reach up to 37.5 percent. Who should take action now This applies to Act 60 decree holders, as well as decree holders under prior incentives laws whose decrees are now reported through the Incentives Portal, who were required to file the 2024 IANE and have not yet done so. It does not apply if the report was already filed in accordance with the decree or if the decree does not require filing this report. If you are unsure whether the IANE was required or whether it was properly filed, do not assume compliance. Bottom line January 30, 2026 is the last opportunity to correct non-compliance before penalties and potential decree revocation begin. If you hold an Act 60 decree, now is the time to: Taking action before January 30 can avoid penalties and help protect your Act 60 benefits. If you need assistance reviewing your compliance status or completing the filing, contact us at support@izquierdolawllc.com.
Beyond the Balance Sheet: 5 Unwritten Rules of Business Financing That Put You in Control
Beyond the Balance Sheet: 5 Unwritten Rules of Business Financing That Put You in Control Most entrepreneurs walk into a bank asking for a loan. The most successful ones arrive ready to present an investment case. That shift in mindset changes everything. When you approach lenders with clarity, structure, and preparation, you stop appearing like someone requesting money and start positioning yourself as a business that is ready to grow. Today, lenders and the AI systems that increasingly assist them look at far more than revenue or credit scores. They evaluate how well your business is organized, how compliant you are, how clearly your numbers tell a story, and how disciplined your operations appear. Based on insights from banking veteran Leah Pérez and my experience advising business owners at Izquierdo Law LLC, these are the unwwritten rules that truly determine whether you secure capital and whether you do so from a position of control. Your Legal Structure Determines Your Financing Power Your legal structure shapes every part of the financing process. Entrepreneurs who operate under a DBA are legally indistinguishable from their business, which means the bank evaluates their personal finances because the business has no separate legal identity. In community property jurisdictions such as Puerto Rico, the marital estate is treated as a shared economic unit, which means a spouse’s assets may also be exposed, even if that spouse has no involvement in the business. Many owners are surprised to learn that operating as a DBA automatically places their personal and family assets at risk. By contrast, operating through an LLC or corporation means the business stands as its own legal person. The bank focuses primarily on corporate financial statements, and although shareholders with substantial ownership must still provide personal information, the separation between personal and business assets provides meaningful protection. Financing becomes easier because the structure itself establishes credibility and reduces perceived risk. You May Be Asking for the Wrong Type of Financing One of the first questions any lender asks is the purpose of the funds. This single question determines the exact structure of the loan the bank can offer. If the need is related to short term working capital, inventory, seasonal fluctuations, or cash flow gaps, the appropriate product is a line of credit, which is meant to revolve and typically supports needs that last less than a year. If the funds are intended for long term investments such as equipment, construction, property purchases, or expansions that will generate returns over several years, then the appropriate tool is a term loan with a defined repayment schedule. Many entrepreneurs slow their own approval by requesting a single lump sum for multiple unrelated needs. Banks do not design financing based on convenience. They design it based on purpose. When business owners are transparent about the use of funds, lenders can create a more accurate, affordable, and efficient financing structure that works with the business’s financial reality. A Quick Online Loan Can Block Your Future Access to Credit Online financing platforms make it easy to obtain fast cash, but the agreements often contain terms that restrict the entrepreneur more than expected. Many fintech lenders file a blanket lien over all current and future business assets. This lien usually places them in first position under secured transaction priority rules, which means they have the legal right to your assets before any traditional bank. Even a small online loan can prevent you from using your receivables, equipment, or inventory as collateral when you later need a larger loan for expansion. Many business owners only discover this problem when a bank informs them that every asset they own is already encumbered. The convenience of these fast loans often comes with long term consequences. This is why I always insist that every financing agreement, even those marketed as simple or routine, should be reviewed by an attorney. A single clause in a contract can effectively mortgage your future borrowing capacity. Your Financial Statements Must Tell a Clear and Coherent Story Many business owners think of financial statements as a compliance requirement, but lenders read them as a story. Before a bank evaluates your profit margins, it examines your compliance documents, including permits, corporate registration, tax certifications, and employment compliance. As banking specialist Leah Pérez often reminds clients, the government must be paid first. Lenders will not proceed until they confirm that your business is in good standing. Once compliance is established, lenders review your revenue, expenses, liabilities, and assets, but they also rely heavily on the notes to your financial statements. These notes provide essential context. If your profits dip one year because you invested in solar panels or upgraded machinery, the notes clarify that these are one time costs rather than signs of instability. Without context, the numbers can appear risky. With proper explanation, the same numbers reflect strategic planning and long term thinking. Lenders want to understand not just what the numbers say, but what they mean. Banks Evaluate Your Team as Much as They Evaluate Your Numbers Financing is never only about the business. It is also about the people who run it. Lenders want evidence that the business is managed responsibly and that the owner is supported by competent professionals. When a company has an experienced accountant preparing accurate financials, an administrator ensuring operational discipline, and an attorney providing legal structure and compliance oversight, lenders interpret this as a sign of seriousness and long term viability. Legal support is especially critical during the financing process. When you sign a loan contract, you are making legal representations. If you unintentionally claim the right to pledge assets that are already encumbered, you may be misrepresenting facts without realizing it. An attorney ensures that your legal structure is sound, your assets are properly protected, and your financing contract reflects reality instead of assumptions. This professional support strengthens your credibility and provides lenders with confidence in your decision making. Preparation Is Not Paperwork. Preparation Is Power. Achieving banking readiness is not simply
New Hacienda Guidance Changes How R&D Tax Credits Are Applied in Puerto Rico
Puerto Rico’s Department of the Treasury (Hacienda) has issued Administrative Determination No. 25-02 (DA 25-02), clarifying how Research & Development Tax Credits (RDTCs) can be claimed and used by businesses operating under Act 60-2019, as amended (“Act 60”) or prior incentives laws. Although DA 25-02 expressly references Acts 73-2008 and 83-2010, note that Act 60 recognizes prior incentive decrees and coordinates RDTC use across regimes. The ability to generate and use RDTCs is not new (see our prior posts and videos). Act 52-2022 (“Act 52”) previously changed how RDTCs may be used. DA 25-02 now changes how the credit is split and recorded in the Manejador de Créditos Contributivos (MCC). This update impacts only businesses with an incentives decree that are engaged in qualifying R&D activities in Puerto Rico. Background: R&D Tax Credits Under Incentives Laws If you hold an Act 60 or prior-law incentives decree and invest in eligible R&D activities in Puerto Rico, you can generate an RDTC of up to 50% of your special eligible investment. To claim the credit, you must obtain a Certification from the Department of Economic Development and Commerce (DDEC), supported by an Agreed-Upon Procedures (AUP) report from a licensed Puerto Rico CPA. Historically, the Certification, the AUP, and any amended returns were submitted to the MCC, and the credit appeared as a single transaction per tax year. Act 52 established that credits from tax years beginning after December 31, 2021 may be taken in two (or more) installments: up to 50% in the tax year the DDEC certification is issued (and it may be applied to a not-yet-due income tax return, including extensions), with the balance in subsequent tax years until exhausted. This change created ripples in the tax credit market because the RDTC usage year may no longer match the investment year, and taxpayers can be negatively affected by DDEC issuance timing and market dynamics (including caps under Act 73 of $300mm). It also directly affects cash flow: the purchase price an RDTC seller can obtain often depends on when the RDTC is issued and which returns are due at that time. While unfavorable for some taxpayers, this has been the rule since Act 52. Before DA 25-02 (but after Act 52), the law already required splitting the credit into installments, yet the MCC typically displayed one transaction. In practice, when an RDTC was sold to more than one taxpayer, sale agreements would specify which tax year the credit related to. DA 25-02 addresses monitoring challenges by splitting the MCC record into two transactions aligned with the tax years of use. Why This Matters for Incentives Businesses Doing R&D Under DA 25-02, the RDTC for a single tax year is divided into two separate installments, and each installment has its own identifier in the MCC. The two installments cannot first become available in the same tax year; the first is available in the certification year (or a prior year if the return is still open), and the second is available in subsequent years until exhausted. Each installment is independently transferable, and buyers step into the seller’s timing rules. For lawyers, RDTC sellers and buyers, and CPAs, this means you must review documentation carefully to ensure the RDTC sold and applied matches the correct installment and tax year. If you are executing a block sale, expect additional compliance steps and two separate MCC transfers—one for each installment ID. This structure may also affect pricing, since the market can now value each installment separately—something Hacienda can also track more explicitly via the MCC. Example Company ABC has an Act 60 decree and invests $2 million in R&D in 2024. On September 1, 2025, DDEC issues a $1 million RDTC certification. In the MCC, the RDTC appears in two tranches (installments): Tranche 1 (up to 50%) and Tranche 2 (the remainder). ABC sells the RDTC to Company XYZ, which filed for an extension; its 2024 return is not yet due, so XYZ can use Tranche 1 for its 2024 income tax liability and Tranche 2 for 2025. The transaction documents must reference the specific tranche identifiers, and the MCC transfer must be executed twice—once for each tranche. When the buyer’s CPA applies the credit, they must reference the correct tranche. Our Take DA 25-02 does not change the substantive eligibility of RDTCs; it clarifies how and when they can be used and operationalizes the split inside the MCC as two separate transactions, with timing and transfer rules that can materially affect pricing and cash-flow planning. Questions about R&D tax credits or other Act 60 matters? Contact Izquierdo Law LLC. We’ll help you navigate the new rules, optimize credit use, and stay fully compliant with DDEC and Hacienda requirements.
Unlock Your Business’s Potential: How Puerto Rico’s Act 60 Boosts Manufacturers (Big and Small!)
Are you an entrepreneur or business owner looking to optimize your finances and scale your operations? Puerto Rico offers one of the most powerful tools for doing just that—Act 60, also known as the Puerto Rico Incentives Code. In a recent conversation, Attorney Ana Izquierdo from Izquierdo Law LLC and Víctor Merced from the Department of Economic Development (DDEC) discussed how Act 60 can put “more money in your pocket”—and not just if you’re a massive corporation like Pfizer or Goya. This law was designed to benefit businesses of all sizes, from startups to established conglomerates. Why Act 60 Is a Game-Changer for Manufacturers 1. Drastically Reduced Tax Rates ⚪ Pioneer businesses: as low as 1% corporate income tax. ⚪ SMEs: 2% for the first five years. ⚪ General manufacturing: 4% rate. That’s a huge drop from the usual 37.5% corporate rate. 2. Additional Tax Breaks Act 60 reduces property taxes (CRIM), and even municipal patents—meaning more savings across the board. Eliminates sales and use tax for raw materials and machinery and equipment used in manufacturing. 3. Long-Term Stability Enjoy 15 years of reduced rates, with the possibility of extending another 15 years—30 years of tax benefits in total. A Broader Definition of “Manufacturing” Manufacturing under Act 60 isn’t just assembly lines—it’s any “eligible activity” capable of generating profit. This opens the door for a variety of industries: ⚪ Software Development – A top category for DDEC applications thanks to its low startup costs. ⚪ Intellectual Property Ownership – Qualify even without physical production if you own the IP. ⚪ Third-Party R&D / Contract Manufacturing – Outsource production but keep ownership of the product and benefit from the reduced tax rate. ⚪ Contract Research – Clinical trials and process development can also qualify. ⚪ Key Suppliers – If your products feed into larger manufacturers, you’re eligible too. ⚪ Conglomerates – Yes, they qualify. ⚪ Property Owners – Lease 25%+ of your space to a manufacturer? You could get a 4% decree yourself. The R&D Credit Advantage Act 60 offers up to 50% credits on R&D expenses—with no cap. These credits can be sold forward, giving you extra liquidity while minimizing your tax burden. The only catch? The financial risk of R&D must be with the contracting entity, not the contractor. Don’t Self-Reject – The most common mistake is assuming you don’t qualify. Just ask. Final Takeaway Whether you’re running a high-tech R&D lab, a niche supplier, or a software company, Act 60 could be your key to major tax savings and growth in Puerto Rico. Don’t dismiss your business’s eligibility—evaluate, validate, and see how much more money you could keep in your pocket. 📞 Ready to explore how Act 60 can transform your business? Reach out to Izquierdo Law LLC today. We’ll guide you through the process and help you tap into Puerto Rico’s powerful manufacturing incentives. Learn more about this topic watch the video here. https://youtu.be/Lu05lHSabuk?si=i6q4eOjudSlUkJ4I
3 Errores Costosos Legales Que Cometen Las Empresas Nuevas
https://youtube.com/shorts/pD6zsNTeXFE Lo Que Debes Hacer Antes de Registrar Tu Marca o crear tu Negocio en Puerto Rico Iniciar un nuevo negocio es un viaje emocionante lleno de planificación, creatividad y trabajo duro. Una de las primeras y más importantes decisiones que tomarás será elegir la estructura legal adecuada y seleccionar un nombre y logo memorables. Aunque la emoción de comenzar puede tentarte a “disparar de la vaqueta”, omitir un paso crítico puede causarte dolores de cabeza y gastos significativos más adelante. ¿Ese paso? Investigar a fondo el nombre, logo y elementos de marca que has elegido para tu negocio. Antes incluso de radicar cualquier documento o invertir en el desarrollo de tu marca, es fundamental verificar la disponibilidad del nombre, logo y branding que deseas usar. Esto implica realizar búsquedas tanto en el Departamento de Estado de Puerto Rico como en la base de datos de la Oficina de Patentes y Marcas de los Estados Unidos (USPTO). No hacerlo puede resultar en errores costosos. Las Estructuras Legales de Negocios en Puerto Rico En Puerto Rico, las formas principales para organizar un negocio con fines de lucro son: Negocio Propio (DBA – Doing Business As): Este es un negocio creado por una sola persona natural sin formar una entidad legal separada. Es la forma más sencilla de operar un negocio, ya que no requiere registro como entidad en el Departamento de Estado, aunque puedes registrar un nombre comercial para proteger tu identidad. El dueño reporta las ganancias y pérdidas del negocio en su planilla de contribución sobre ingresos personal y está sujeto a la contribución sobre trabajo por cuenta propia (self-employment tax) sobre las ganancias. En esta estructura, el dueño es personalmente responsable por las deudas y obligaciones del negocio con todos sus bienes presentes y futuros, incluyendo los ganaciales. Corporación: Una corporación es una entidad legal reconocida por ley, separada de sus dueños (accionistas). Un beneficio clave es la responsabilidad limitada de sus dueños. Este tipo de estructura es común para levantar capital (por preferencia de inversionistas foraneos menos familiarizados con las LLC) pero tiene mayores requisitos del Departamento de Estado y en general menos flexibilidad contributiva. Una corporación requieren procedimientos formales bajo la Ley General de Corporaciones, tener estatutos (bylaws), una junta de directores, llevar contabilidad y mantener libros corporativos. Deben radicar un informe anual en el Departamento de Estado a más tardar el 15 de abril. La formación requiere radicar un certificado de incorporación en el Departamento de Estado. El nombre debe distinguirse de otras entidades registradas en el Departamento de Estado y debe incluir términos como “Corporación”, “Corp.”, “Incorporado” o “Inc.”. Deben mantener una oficina designada y un agente residente en Puerto Rico. Los tipos comunes incluyen la Corporación Regular, Corporación Intima (máximo 75 accionistas, menos formalidades), y Corporación de Servicios Profesionales (para profesionales licenciados, todos los accionistas deben estar licenciados, el nombre incluye siglas como CSP o PSC). Por defecto, las corporaciones están sujetas a contribución sobre ingresos corporativa, lo que puede llevar a doble tributación, pero pueden elegir tributación de pass-through si son elegibles. Compañía de Responsabilidad Limitada (LLC – Limited Liability Company): Una LLC es también una entidad jurídica independiente de sus dueños (“Miembros”), cuya responsabilidad es limitada generalmente no excede su aportación de capital. Se organizan radicando un certificado de organización en el Departamento de Estado. Su nombre debe distinguirse de otras entidades registradas en el Departamento de Estado y debe contener las siglas CRL o LLC. Deben tener una oficina registrada y agente residente en Puerto Rico. Por defecto, las LLCs tributan como corporaciones, pero comúnmente eligen ser tratadas como entidades conducto (“Pass-through”) o entidades ignoradas (“Disregarded Entity”) para evitar la doble tributación. Sociedad (Partnership): Una sociedad es un contrato donde dos o más personas acuerdan aportar dinero o bienes para compartir ganancias. Existe cuando varios dueños no han formado una corporación o LLC. Si se aporta un bien inmueble, requiere escritura pública. Una sociedad termina si cambia la composición de los socios. Las fuentes no detallan la responsabilidad de los socios en esta estructura, pero en una sociedad general, los socios suelen ser conjuntamente y solidariamente responsables por las deudas de la sociedad. Nota importante: Independientemente de la estructura, todo negocio en Puerto Rico debe cumplir con requisitos contributivos y regulatorios del IRS, Hacienda, CRIM, municipios, Departamento del Trabajo, Fondo del Seguro del Estado, OGPe, ASUME y otras agencias según la industria.No registrarse y pagar las contribuciones o permisos correspondientes pudiera tener muchisimos costos para el negocio, irrespectivo de su estructura. ¿Qué es una Marca y un Nombre Comercial? Ya que entendemos como un negocio puede operar en Puerto Rico, vamos a discutir que son marcas y nombres comerciales. Una marca (trademark) es un signo o medio signo distintivo que identifica productos o servicios en el mercado. Incluye marcas de fábrica, servicio, certificación y colectivas. Puede estar compuesta por palabras, nombres, frases, símbolos, sonidos, colores o combinaciones. Un nombre comercial (trade name) distingue la actividad comercial de una empresa frente a otras. Usar una marca otorga derechos limitados localmente, pero registrarla en la USPTO proporciona protección nacional. Beneficios clave de registrar una marca: Protección frente a marcas similares para productos/servicios relacionados en EE.UU. y Puerto Rico. Fortalece el valor comercial de la marca. Facilita expansión y licenciamiento. La búsqueda previa (“clearance search”) evita solicitudes rechazadas o conflictos. ¿Por qué registrar también en Puerto Rico? Aunque el registro federal se extiende a PR, el registro local refuerza la posición legal dentro de la jurisdicción, facilita procesos ante tribunales locales, y brinda mayor visibilidad en el entorno comercial puertorriqueño. También permite proteger nombres comerciales que no están cubiertos por la USPTO. ¿Dónde y Cómo Hacer la Búsqueda? Independientemente de la estructura que elijas, antes de usar o registrar un nombre o marca, realiza estas búsquedas: Departamento de Estado de Puerto Rico: En el Departamento de Estado hay que hacer dos búsquedas separadas: (1) Registro de Corporaciones y Otras Entidades Jurídicas (2) Registro de Marcas y Nombres Comerciales.
Year One in Review: Reflecting on a Transformative First Year at Izquierdo Law LLC
One year ago, Izquierdo Law LLC opened its doors with a clear mission: to deliver strategic, pragmatic legal counsel that helps businesses in Puerto Rico not just stay compliant—but thrive. As we mark our first anniversary, we’re reflecting with immense pride and gratitude on everything we’ve accomplished in just 12 months. It has been a year of growth, impact, and meaningful connection with our clients and communities. 🎤 Making Our Voice Heard This year, we had the privilege of participating in major business forums and conferences shaping Puerto Rico’s economic future. We spoke at: Boricua Emprende Fest, or BE Fest, is a dynamic event highlighting the island’s entrepreneurial spirit. We joined Gustavo Diaz from IncentivesPro to discuss Act 60 incentives. Our conference was named one of the top ones, and our room was packed, even with so many other competing events going on at the same time. The Women’s Economic Forum (WEF), where we joined powerful conversations on leveraging the research and technology opportunities in the private and public sectors for innovation. The Puerto Rico Chamber of Commerce shares insights and breaks myths regarding Puerto Rico Act 60 in the Chamber’s program, in the Section: Pica y Se Extiende. We were also invited to share our perspectives in the media. We appeared on two impactful podcasts—SparkOf and Rolando López—discussing business incentives, compliance, and how legal strategy can unlock operational efficiency. 📝 Contributing to Thought Leadership One of our proudest moments was publishing an original article in SparkOf Magazine, offering practical legal guidance for creative businesses navigating Puerto Rico’s incentive landscape. Act 60 offers substantial tax and economic incentives that can be strategically applied across the music and events industry, benefiting artists, producers, managers, and support businesses through export services, manufacturing, and creative industry decrees. These incentives include reduced income tax rates, exemptions on municipal and property taxes, and eligibility for transferable tax credits, particularly when services or content are exported outside Puerto Rico. With proper legal and structural planning, the entire music ecosystem—from merchandise to licensing, live events, and software—can optimize operations and reduce fiscal burdens significantly under Act 60. We believe in empowering the business community with knowledge, and it was an honor to contribute to this respected publication. 🎓 Mentoring the Next Generation As part of our commitment to Puerto Rico’s entrepreneurial ecosystem, we served as mentors for Cohorts 18 and 19 of Grupo Guayacán’s I-Corps Program. We were even part of I-Corp’s Instructor Academy and “instructor in training” for Cohort 19, which elevated the experience immensely as we learned from the best instructors. Working with driven founders and researchers gave us fresh perspectives and renewed our passion for entrepreneurship and understanding your customer’s needs. It was also a reminder that mentorship is a two-way street—it deepens our understanding of the evolving needs of startups and small businesses. Feel free to join the Cohort 20 waitlist at https://bit.ly/icorpsprcohort20waitlist. 🤝 Building Community & Connections We made it a priority to show up and stay connected. We attended major events hosted by: APAF (Asociación de Planificadores Financieros) The Puerto Rico Chamber of Commerce The Puerto Rico Society of CPAs (Colegio de CPA) And the always-inspiring Uncommon Entrepreneurs These events gave us the chance to listen, learn, and collaborate with the people and institutions working tirelessly to drive Puerto Rico’s economy forward. 🏢 Establishing Our Roots This year also marked a big operational milestone: we opened our first physical office. A space where clients can meet with us face-to-face, where ideas can be exchanged over coffee, and where our mission becomes tangible. Beyond that, we’ve forged alliances with key businesses and professionals—accountants, consultants, compliance experts, and financial advisors. These relationships have strengthened our ability to offer clients holistic, results-driven legal strategies that align with their broader goals. ❤️ Why This Year Was Truly Special Despite all the public-facing accomplishments, what made this year truly meaningful was the trust our clients placed in us. Whether we were helping optimize cash flow, navigate Act 60 incentives, or restructure operations for efficiency—every single project was a chance to make a real difference. Your support, referrals, and belief in our approach have made this journey not only possible but deeply rewarding. 🚀 Looking Ahead Year one laid the foundation. Year two will be about scaling our impact, deepening our expertise, and continuing to support the businesses that are shaping Puerto Rico’s future. To our clients, colleagues, and friends—thank you for being part of our story. We’re just getting started. Here’s to building smarter, stronger businesses—together. 🥂 Want to stay in the loop on upcoming events, legal insights, and resources? Follow us on our socials. 🔖 #IzquierdoLaw #PuertoRico #BusinessLaw #Act60 #LegalStrategy #Incentives #YearOneReview #Entrepreneurship #CashFlow #Compliance #SparkOfMagazine #OneYearStrong
April 15 Tax Deadlines: What You Need to File Today (Puerto Rico & U.S. Overview)
Today is April 15, 2025, and if you haven’t already filed or extended your returns, you’re out of runway. Whether you’re a corporation, pass-through entity, employer, or individual — today is packed with federal and Puerto Rico tax deadlines that carry real consequences if missed. Here’s your rapid-fire breakdown of what’s due, where to file, and how to avoid penalties. Puerto Rico Tax Filings Due Today Income Tax Returns & Reports Withholding & Estimated Tax Payments Informative Returns Employer Responsibilities Additional Items U.S. Federal Tax Filings Due Today Quick Access Portals Final Word: File extension and Call Your CPA Immediately This isn’t a drill. You have multiple critical deadlines converging today. If you’re not 100% sure what applies to you — call your CPA immediately. Filing extensions are available in some cases, but tax payments are not excused by indecision. Don’t assume you’re covered — confirm it. Pay what’s due. File what’s required. Avoid interest, penalties, and surcharges to keep more of your money in your pocket.
Stop wasting time and money due to supply chain issues
Puerto Rico is the Smart Choice for Optimizing Your Supply Chain Manufacturers today face mounting external and internal challenges that threaten supply chain stability. Over-reliance on distant suppliers has proven risky, as COVID-19 exposed the dangers of single-source dependency, causing massive disruptions across industries. Now, looming tariffs and trade restrictions add further uncertainty, driving up costs and forcing companies to rethink their global sourcing strategies. Internally, manufacturers struggle with rising labor costs, supply chain visibility issues, and logistical inefficiencies, making it harder to remain competitive. Puerto Rico provides a strategic alternative—offering the benefits of “Made in USA” manufacturing with shorter lead times, lower costs, and a skilled bilingual workforce, all while sidestepping many of the regulatory and financial risks associated with offshore production. it offers the perfect combination of proximity, financial incentives, and regulatory benefits—making it a strategic alternative to overseas locations. As a U.S. territory,Puerto Rico presents a unique solution: “Made in USA” advantages with offshore-like cost savings, seamless regulatory compliance, and a fast-tracked investment climate under Executive Order OE-2025-012. Key Benefits of Leveraging Puerto Rico 1. Tax Incentives for Business Growth 💰 Lower Tax Burden: Puerto Rico-sourced income is excluded from U.S. federal taxation. Under Act 60, many businesses qualify for tax rates between 0% and 10.5% (generally 4%). OE-2025-012 Fast-Tracks Investment: The newly enacted executive order establishes “Fast Track” approval processes and unique funding mechanisms, further reducing operational hurdles. Reinvestment Opportunities: Lower taxes mean higher profits that can be reinvested into innovation, workforce expansion, and infrastructure. 2. Regulatory & Legal Advantages ⚖️ U.S. Federal Laws Apply: Puerto Rico follows many of the same regulatory standards as the mainland, simplifying compliance. “Made in USA” Labeling: Products manufactured in Puerto Rico qualify as “Made in USA,” meeting domestic and federal procurement requirements. Robust IP Protection: U.S. intellectual property laws apply, ensuring strong patent, trademark, and trade secret protections. 3. Highly Skilled, Bilingual Workforce 👩💻👨💻 STEM Talent Pipeline: Over 20,000 STEM graduates annually from 80+ universities. Lower Labor Costs with Subsidies: Programs like WIOA and Registered Apprenticeships cover 50-90% of wages. Bilingual Workforce: Fluent in both English and Spanish, Puerto Rico offers a gateway to Latin America and U.S. markets. 4. Strategic Location & Logistical Efficiency ✈️ Proximity to Mainland U.S.: Puerto Rico is closer than most offshore locations, reducing shipping costs and delivery times. Time Zone Alignment: Operates in Atlantic Standard Time (AST), which is on a similar if not equal time-zone as your mainland teams facilitating real-time communications. Tariffs & Trade Restrictions: Geopolitical tensions are driving up costs and creating uncertainty for manufacturers. While Mexico and Canada are often considered nearshoring alternatives, potential tariffs could make them expensive options for U.S. companies. Meanwhile, China remains the largest supplier to U.S. manufacturers, but its distance, ongoing trade disputes, and looming tariffs pose significant risks to supply chain stability. 5. Fast-Tracked Reshoring & Expansion 🚀 OE-2025-012 Creates a “One-Stop Shop” for Investment: The new executive order mandates a single-window system for site selection, permitting, and tax incentives . Specialized Manufacturing Hub: Puerto Rico ranks #1 in U.S. pharmaceutical and medical device exports, making it an ideal location for biotech, aerospace, defense, and high-tech industries . Dedicated Workforce Development Funds: OE-2025-012 establishes a Workforce Training Fund to help businesses up-skill employees in advanced manufacturing . Why Now? The combination of reshoring incentives, streamlined regulatory processes, and Puerto Rico’s strong industrial ecosystem makes this the perfect time to relocate or expand your operations. Puerto Rico is competing directly with locations like Ireland, Singapore, and Costa Rica—but with the added advantage of U.S. jurisdiction and protections. By leveraging Puerto Rico’s unique advantages, businesses can enhance supply chain resilience, reduce operational costs, and stay competitive in a shifting global market. Ready to Optimize Your Business? If your company struggles with supply chain issues, it may be time to rethink where and how you manufacture and distribute. Puerto Rico could be the answer. 🚀 Puerto Rico offers a seamless, cost-effective, and strategic solution for companies looking to strengthen their supply chains. Take advantage of OE-2025-012’s fast-tracked investment opportunities and position your business for long-term success. Want to evaluate whether moving your operations to Puerto Rico is right for your business? Contact us today for a free consultation at ana@izquierdolawllc.com. #BusinessStrategy #PuertoRicoAdvantage #SupplyChainOptimization #TaxSavings #Reshoring #Growth
