Serving Clients Off the Island? You May Be Leaving Money on the Table There is a persistent and costly myth in Puerto Rico: that Act No. 60-2019, as amended, known as the Puerto Rico Incentives Code (“Act 60”), is a tax break reserved for wealthy foreigners. Local business owners hear “tax incentives” and assume the conversation isn’t about them. So they keep paying full freight, year after year, while a tool built largely for them sits unused. The numbers tell a different story. Roughly 65% of Act 60’s incentives are dedicated to Puerto Rico’s own economic development, and more than 60% of all decrees granted over the last 27 years have gone to Puerto Rican entrepreneurs. The most popular of these, by a wide margin, is the Export of Services decree (formerly Act No. 20-2012, as amended). It currently draws the highest volume of decree applications at the Department of Economic Development and Commerce (DDEC). If you provide a service from Puerto Rico to clients located outside the island, this chapter was written with you in mind. What “Export of Services” actually means The phrase sounds technical, but the idea is simple. You are exporting a service when you perform it from Puerto Rico for a client located somewhere else. Your office, your team, and your work stay on the island. Your customer are in the US (think Florida, Texas, New York), Virgin Islands, Spain, Latin America, or anywhere beyond Puerto Rico. That’s it. You don’t ship a product. You don’t open a foreign branch. You simply do what you already do, for clients who happen to be elsewhere. The rule that matters most: the 4% rate applies only to income generated from Puerto Rico through exported services. If your business serves both local and international clients, that’s fine. You request a decree covering the export portion of your income, and that portion is taxed at the preferential rate while your local work is treated normally. The condition is recordkeeping: you must maintain books, records, and billing that clearly separate export income, costs, and expenses to the satisfaction of the Treasury Secretary. The 4% rate then applies to the export portion, and your local work is taxed normally. The benefits: more than just a lower rate Securing an Export of Services decree is not a one-time discount. It is a contract between your business and the Government of Puerto Rico, carrying constitutional protection and lasting up to 15 years, with the option to renew for another 15 years. Because it is an agreement with the government itself and not with any particular administration, it gives you a stable foundation to plan around for years at a time. The core benefits include: 4% fixed income tax rate on income derived from your eligible export activity. 100% exemption on dividends. Distributions of those earnings to you as the owner are fully exempt. 75% exemption on real and personal property taxes (CRIM). 50% exemption on municipal taxes (patente). For a business owner, the dividend exemption alone can be transformative. It means the profit you pull out of the company to reinvest or pay yourself isn’t eroded a second time. The PYME advantage: a 2% rate for smaller businesses Small and medium businesses (“PYME” by its Spanish acronym) have an additional gear. If your business has an average business volume of $3 million or less over the prior three taxable years and had not begun operations before Act 60 took effect, you may qualify as a “New PYME.” That status lowers the rate from 4% to 2% for the first five years of the decree. During those five years, you also pay 0% in municipal taxes (patente) and 0% in property taxes (CRIM). After year five, the rate steps to 4% and the property and municipal exemptions move to 75% and 50% for the remainder of the decree. It’s worth understanding that the PYME rate is a modifier applied on top of an Export of Services decree, not a standalone program. You qualify under Export of Services first, then layer the PYME rate on top if eligible. For a growing company, that is essentially capital you fund your own expansion with, instead of sending it to the government. Does your service qualify? Probably. Act 60 lists 19 categories of eligible service activities, and they are broad. They include: Research and development. Scientific, technical, or commercial research performed in Puerto Rico for clients elsewhere. Think third-party contract research, contract labs, product testing, and innovation work where the findings are delivered to a company off the island. Advertising and public relations. Agencies and consultants that build campaigns, manage media, handle press, and shape reputation for clients located outside Puerto Rico. Consulting. One of the broadest categories. It expressly covers economic, environmental, technological, scientific, managerial, marketing, human resources, IT, and audit consulting. Most advisory firms with a defined specialty fit somewhere here. Advisory services on any industry or business. A catch-all within consulting. Where category 3 names specific disciplines, this covers advisory work on matters tied to any industry, giving room for niche or cross-disciplinary advisors. Creative industries. It reaches ticket sales made outside Puerto Rico (or bought by tourists here), transmission and recording rights sold to audiences off the island, musical productions, and eSports and Fantasy League events held in Puerto Rico. This is the category built for entertainment, media, and content producers. Construction blueprints, engineering, architecture, and project management. Design and technical services for projects, including the drawings themselves and the management of the project, performed for external clients. Professional services. Specifically legal, tax, and accounting. A Puerto Rico law firm or CPA serving mainland or foreign clients exports under this category, as long as the work doesn’t touch Puerto Rico (more on that limit below). Centralized management services. Strategic direction, planning, distribution, logistics, and budgeting run out of a company’s headquarters or regional offices. It also explicitly covers strategic and organizational planning of processes, distribution, and logistics for persons outside Puerto Rico. This
The Tourism Tax Benefits Puerto Rico Built for You
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
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.
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
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
No le pague taxes a Hacienda – legalmente.
Incentivo para Jóvenes Empresarios en Puerto Rico: Una Oportunidad para el Éxito Empresarial Puerto Rico tiene incentivos increíbles. El mejor es para que los empresarios jóvenes creen su negocio sin preocuparse del Hacienda, el CRIM o patentes municipales. La Ley Núm. 60-2019, según enmendada, conocida como el Código de Incentivos, (“Ley 60”) provee el Incentivo para Jóvenes Empresarios en Puerto Rico ofreciendo un apoyo financiero significativo para que estos jóvenes entre 16 y 35 años conviertan sus sueños en realidades. Este incentivo proporciona exenciones completas contributivas y beneficios económicos diseñados para fomentar la innovación, retención del talento joven y el crecimiento económico entre los jóvenes empresarios. 1. Beneficios Claves del Incentivo Los jóvenes empresarios que califiquen pueden disfrutar de los siguientes beneficios: Exención del 100% sobre el impuesto sobre ingresos – Aplica a los primeros tres años de operación o hasta alcanzar $500,000 en ingresos brutos, lo que ocurra primero. Exención del 100% sobre impuestos municipales, incluyendo: Impuesto sobre la Propiedad Mueble e Inmueble (CRIM) – Exención del pago de impuestos sobre bienes raíces y equipos comerciales. Patente Municipal – Exención del impuesto municipal normalmente aplicado a los ingresos de los negocios. Si eres Joven Empresario admitido a la práctica de la medicina, de la pediatría, sea un(a) cirujano(a) dentista o practique alguna especialidad de la odontología tienes un proceso expedito de solicitud. 2. ¿Quiénes son Elegibles? Para calificar al Incentivo para Jóvenes Empresarios, los solicitantes deben cumplir con los siguientes requisitos: Tener entre 16 y 35 años. Ser residente de Puerto Rico. Tener un grado de escuela superior o grado equivalente o estar estudiando para estos propósitos. Para un nuevo negocio en Puerto Rico que no haya estado operando previo a radicar la solicitud de decreto. Que el negocio no haya sido operado por una afiliada o por razón de reorganización. 3. Restricciones Tener solo un negocio nuevo. No tener otros decretos. Solo aplica a negocios que comenzaron luego de radicar la solicitud con el Departamento de Desarrollo Económico y Comercio (DDEC). El negocio sólo puede ser dueño jóvenes empresarios. 4. ¿Cómo Solicitar el Incentivo? El proceso de solicitud es más sencillo que otros decretos y está diseñado para agilizar el inicio de negocios: Organización: Determina si vas a formar una compañía como corporación intima, compañía de responsabilidad limitada o vas a operar como un DBA. Es importante que tu selección permita que los ingresos de la compañía fluyan a tu planilla, ya que el decreto es tuyo. Si no sabes que es mejor para ti, consulta una abogado o CPA que sepa. Prepara los documentos y la solicitud: Vas a necesitar describir la entidad, cual es el negocio que vas a ofrecer, si vas a tener un producto o servicio, y cuantos empleados vas a tener (te puedes incluir). También recomendamos explicar como generaría el negocio ingresos y alguna proyección de ingresos si la tienes. Recopila la Documentación Requerida – Debes obtener e incluir: Declaración jurada Copia de tu certificado de nacimiento, Identificación con foto emitida por PR o USA; Diploma de escuela superior, equivalente, o educación posterior. Si esta cursando estudios de escuela superior una evidencia que certifique dichos estudios. De Hacienda certificados de no deuda y radicación de planillas últimos 5 años (los consigues en SURI). Certificado de deuda de CRIM. Certificado de cumplimiento de ASUME De ser una compañía, se necesita adicionalmente De Hacienda certificados de no deuda y radicación de planillas últimos 5 años (los consigues en SURI). Certificado de deuda de CRIM. Certificado de cumplimiento de ASUME Certificado de formación o incorporación Información adicional que puedes proveer, pero no es requerida automáticamente por DDEC: registro de comerciante; un plan de negocios o, aunque sea unos párrafos explicando tu visión del negocio, plan de contratación y como la compañía va a generar ingresos; sí haz participado de alguna incubadora; certificado de antecedentes penales; curriculum vitae o resume y otros documentos que denoten tu capacidad de operar un negocio con éxito. Solicitar a través del Portal de Incentivos – Envía tu solicitud en línea a través del Portal de Incentivos de Puerto Rico. Aprobación y Cumplimiento – Una vez aprobado, presentas la aceptación mediante declaración jurada. Luego, debes proveer copia del decreto al CRIM y a la oficina de patente de tu municipio. Recuerda que el decreto te exime de pagar contribuciones sobre ingresos, de propiedad mueble e inmueble al igual que patente. No obstante, debes hacer las radicaciones apropiadas según sean requeridas y recuerda que tienes que pagar debes cumplir con todos los requisitos para mantener la elegibilidad a las exenciones. 5. Apoyo Adicional para Jóvenes Empresarios Puerto Rico también ofrece otros programas para fortalecer el éxito de los jóvenes empresarios, tales como: Incubadoras y Aceleradoras de Negocios – Programas como Grupo Guayacán, Parallel18, y Colmena66 ofrecen mentoría, redes de contactos, herramientas y acceso a capital. Subvenciones y Préstamos a Bajo Interés – El Banco de Desarrollo Económico (BDE) proporciona financiamiento y el decreto de joven empresario que puede hacer elegible para otros fondos del DDEC son los fondos de incentivos económicos y los créditos de investigación y desarrollo. Este apoyo financiero para ayudar a los emprendedores con su capital inicial. Estos recursos ayudan a los jóvenes empresarios a desarrollar modelos de negocio sostenibles y a recibir orientación de expertos. 6. ¿Por qué Puerto Rico? Puerto Rico cuenta con una combinación ideal de ubicación estratégica, jurisdicción estadounidense y beneficios contributivos para negocios, lo que lo convierte en un destino atractivo para los jóvenes empresarios. Además, el costo de vida es más bajo que en muchas ciudades principales de EE. UU., permitiendo a los emprendedores maximizar sus recursos financieros. La Ley 60 reemplazó la Ley Núm. 135-2014 con el objetivo de simplificar y mejorar el acceso a incentivos para jóvenes empresarios. Aunque los beneficios se mantienen en gran medida, la nueva ley ofrece un proceso más centralizado, exenciones más claras y mayor estabilidad en su implementación. Conclusión El Incentivo para Jóvenes Empresarios bajo la Ley 60 es una oportunidad única para jóvenes que desean establecer un negocio en Puerto Rico. Con hasta tres años de exenciones contributivas al 100% o hasta $500,000 en ingresos brutos, los jóvenes empresarios pueden construir el negocio de sus sueños y quedarse con más dinero
Puerto Rico’s Investor Tax Incentives: Are You Leaving Money on the Table?
Did you know that Puerto Rico offers some of the most attractive tax incentives in the world? If you’re a business owner or investor, you could be saving thousands—maybe even millions—in taxes! How Act 60 Benefits Investors Puerto Rico’s Incentives Code (Act 60-2019, as amended) grants a tax decree to individual resident investors who meet specific criteria. This decree allows eligible individuals to PAY ZERO TAXES on interest, dividends, and capital gains. To qualify, you must become a bona fide resident. This incentive became especially popular in the crypto and investment communities since it covers gains from stocks, commodities, digital assets, and blockchain-based holdings. But you have to hurry, as these incentives all end in 2036. Additionally, individuals can pair this with an operating business in Puerto Rico, which may qualify for a 15-year tax decree at just 4% corporate income tax. Some industries even benefit from tax rates between 0% and 10%, depending on their economic activity. While business incentives come with technical requirements (which we’ll cover in a future post), today’s focus is on individual resident investors and their residency qualifications. Key Requirements for the Individual Resident Investor Decree If you want to retain your tax benefits, you must meet strict requirements: Residency – You (and your family) must establish Puerto Rico as your primary residence. You must have not lived in Puerto Rico between January 17, 2006 and January 17, 2012. Real Estate – Within two years of obtaining your decree, you must purchase a home in Puerto Rico that is exclusively owned by you and/or your spouse. Charitable Contribution – A $10,000 annual donation to a Puerto Rico-based nonprofit is mandatory. Annual Report – You must file an annual report with the Department of Economic Development and Commerce (DEDC), which costs $5,005. Please note that Act 22 and Act 60 have grandfathered clauses, meaning some people with Act 22 decrees do not have to buy a house and only pay $5,000 to charity. Since it is a contract between you and the government, you have constitutional protection that no future law can amend to impair your contract. However, if Act 60 is amended with better benefits, you can request your decree be amended to benefit from the better terms. ⚠️ Failure to comply with these requirements can lead to disqualification, revocation, and back taxes.While the housing requirement is non-negotiable (if not met, your decree is automatically revoked), other failures—like missing your donation or annual report—can sometimes be corrected by paying late fees, amending your decree and requesting clemency from the DEDC. Residency: What You Think You Know is Wrong Most people assume they need to spend at least 183 days per year in Puerto Rico to qualify as a resident. But that’s only partially true. 🛑 The 183-day rule is just a presumption—not a requirement. 📌 The Puerto Rico Internal Revenue Code (PRIRC) states that spending 183 days physically in Puerto Rico automatically establishes residency. However, not meeting this threshold does NOT mean you are automatically a non-resident. Instead, if you spend less than 183 days in Puerto Rico, you must prove your residency using facts and circumstances under Puerto Rico’s domicile test. How to Prove Puerto Rico Domicile Under the PRIRC, a resident individual is someone domiciled in Puerto Rico. But what does that mean? Your domicile is the place where you habitually reside when not away for work or other temporary reasons. You can only have ONE domicile at a time—if you want it to be in Puerto Rico, you must take intentional actions to establish it. You must demonstrate Puerto Rico is your “home base,” meaning it’s the place you return to during “seasons of repose.” On top of this, the IRS applies its own three-part test to determine if someone is a bona fide Puerto Rico resident: Presence Test – Being physically present in Puerto Rico for 183 days OR showing a “significant connection” to the island. The Internal Revenue Service (“IRS”) in Publication 570 establishes other ways to meet the Presence Test, which are outside the scope of this article, but you can check it out. Tax Home Test – Proving your primary place of business or employment is in Puerto Rico. Closer Connection Test – Demonstrating that your strongest ties (family, home, voting registration, community, mail, assets, etc.) are in Puerto Rico rather than the U.S. 🚨 Example: The IRS once ruled that a taxpayer who moved to Puerto Rico to start a business but whose spouse and children stayed in California was not a bona fide Puerto Rico resident. Despite owning a home in Puerto Rico, the taxpayer frequently traveled to the U.S. for business, family visits, and vacations. Because of his closer connections to the U.S., he failed the residency test. The Bottom Line: Residency is Fact-Specific Puerto Rico has incredible incentives but you have to comply with the rule to avail yourself of them. The key takeaway? Puerto Rico residency isn’t as simple as counting days. It depends on your lifestyle, economic ties, and personal connections. If you’re considering relocating or need help optimizing your tax structure, consult a professional. Every case is different, and the consequences of getting it wrong can be costly. 💬 Thinking about moving your business to Puerto Rico? Not sure if you would qualify as a resident?📩 Let’s talk! Schedule a consultation today and ensure you don’t leave money on the table. Legal Disclaimer This post is for informational purposes only and does not constitute legal advice. You should consult with legal counsel before making any decisions regarding residency, taxation, or business incentives. Accessing this post does not create an attorney-client relationship.