ACT 60

Export Services Incentives (Act 60)

Puerto Rico offers attractive tax incentives for businesses that export services outside the island.

Key Benefits:

• 4% corporate income tax rate
• 100% tax exemption on dividends from export services income
• Up to 75% municipal tax exemption
• Up to 75–100% exemption on property taxes (subject to decree terms)

To qualify, your business must provide services to clients outside Puerto Rico and maintain a bona fide operation on the island. Owners must receive a reasonable salary, which is subject to regular income tax.

Eligibility

Businesses may qualify by:

• Relocating operations to Puerto Rico, or
• Establishing a Puerto Rico entity that generates export services income

Compliance Requirements

• Initial application fee: $750
• Annual report fee: $300
• Ongoing compliance with government agencies and reporting requirements

Individual Resident Investor Incentives

Puerto Rico also offers significant tax benefits for individuals who become bona fide residents.

Key Benefits:

• 100% tax exemption on Puerto Rico-sourced dividends and interest
• 100% exemption on Puerto Rico-sourced capital gains (after becoming a resident)

Residency Requirements

To qualify, individuals must meet IRS bona fide residency tests, including:

• Spend at least 183 days per year in Puerto Rico
• Establish Puerto Rico as their primary tax home
• Demonstrate closer ties to Puerto Rico than to any other location

Additional Considerations

• Capital gains accrued before becoming a resident may be subject to different tax treatment
• A $750 application fee and $5,000 acceptance fee apply
• Annual requirements include a $10,000 charitable contribution and filing compliance