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