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  • October 16, 2018

Puerto Rico Tax Incentives

Puerto Rico Tax Incentives

Not only is Puerto Rico one of the most beautiful islands in the Caribbean, it is also one of the best places to do business.With labor rates at 30% less than many US cities and tax rates as low as 10% of current US rates, Puerto Rico has become home to many US Businesses. At the Etrends Group we are experts in helping individuals and businesses understand how Puerto Rico can be a solution to increasing their success. Two of the main ways we do this is by educating them on Act 20 and Act 22, and by making them aware of all the other tax incentives Puerto Rico has to offer.

Act 20 Benefits (Export Services)

  • 4% foxed corporate tax rate
  • No U.S. tax on qualified corporate earnings
  • 60% exemption on municipal taxes
  • 100% exemption on property taxes
  • 100% exemption on real estate taxes
  • 100% tax exemption on distribution from earnings and profits
  • A 20 year decree is issued from the government from the date of your application
  • If certain conditions are met the decree will be extended for an additional 10 years

Act 22 Benefits (Individual Investors)

  • 100% tax exemption from Puerto Rico income taxes on dividends
  • 100% tax exemption from Puerto Rico income taxes on all interest
  • 100% tax exemption from Puerto Rico income taxes on all capital gains
  • Investment income accrued prior to becoming a bona fide resident of Puerto Rico will be taxed at 10% if realized within 10 years after residency is established. If the gain is realized after the 10 years, but on or before December 31, 2035 the tax is 5%
  • Capital gains appreciation on investments that occur after becoming a bona fide Puerto Rico resident can be apportioned to Puerto Rico

If you are interested in learning more please schedule an appointment with our Puerto Rico Prosperity Advisor HERE

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