Puerto Rico's Premier Tax Incentive
Act 60 Tax Incentive Decrees
Act 60 of 2019 consolidates Puerto Rico's most powerful tax incentives into a single framework — offering qualifying residents and businesses some of the lowest tax rates available to U.S. citizens anywhere in the world.
What Is Act 60?
Act 60 (the Puerto Rico Incentives Code) replaced and consolidated prior incentive acts — including the well-known Acts 20 and 22 — into a unified code. It offers qualifying individuals and businesses dramatically reduced tax rates on income earned in Puerto Rico, capital gains, and dividends.
The incentives are real, legitimate, and backed by Puerto Rico's status as a U.S. territory. But they come with meaningful compliance obligations — annual reporting, residency requirements, charitable contribution requirements, and ongoing DDEC and OIN oversight. Getting it right requires an advisor who knows the rules inside and out.
4%
Corporate / Export Services Tax Rate
0%
Capital Gains Tax on PR-sourced gains
0%
Dividend & Interest Tax
0%
Tax on Puerto Rico-sourced passive income
Decree Types
Which Decree Is Right for You?
Act 60 covers several distinct decree categories. The right one depends on your income type, business structure, and residency situation.
Chapter 2
Export Services (formerly Act 20)
For businesses that export services from Puerto Rico to clients outside the island. Qualifying export service companies pay a 4% corporate income tax rate on eligible income. Ideal for consultants, financial services firms, technology companies, and professional service providers.
- 4% corporate tax rate
- Eligible for remote service businesses
- Requires bona fide Puerto Rico operations
Chapter 3
Individual Investors (formerly Act 22)
For individuals who become bona fide Puerto Rico residents. Qualifying individuals pay 0% tax on Puerto Rico-sourced capital gains, dividends, and interest. Requires genuine residency — not just a mailing address — and an annual charitable contribution.
- 0% capital gains tax on PR-sourced gains
- 0% tax on dividends and interest
- Annual $10,000 charitable contribution required
Chapter 6
International Financial Entities (IFE)
For international banking entities, investment funds, and financial services companies operating in Puerto Rico. Provides a 4% tax rate on eligible income and exemptions on dividends and interest.
- 4% tax on eligible income
- Dividend and interest exemptions
- OCIF regulatory oversight
Chapter 11
Young Entrepreneurs
For Puerto Rico residents under 40 who establish a new business on the island. Provides a 0% income tax rate on the first $500,000 of net income for up to five years.
- 0% income tax up to $500K
- Must be under 40 at time of application
- New business must be established in Puerto Rico
The Process
How We Guide You Through Act 60
Eligibility Review
We assess your income type, business structure, and residency situation to determine which decree — if any — is the right fit. We won't push you toward a decree that doesn't make sense for your situation.
Entity Formation & Planning
If needed, we help structure the right Puerto Rico entity — LLC, corporation, or other vehicle — to hold your decree and optimize your tax position from day one.
DDEC Application
We prepare and submit your application to the Puerto Rico Department of Economic Development and Commerce (DDEC), including all required documentation and supporting materials.
Decree Issuance & Onboarding
Once your decree is issued, we walk you through its specific terms, compliance obligations, and reporting requirements so there are no surprises.
Annual Reporting & Ongoing Compliance
We handle your annual Act 60 reports, OIN filings, Hacienda returns, and ongoing compliance — keeping your decree in good standing year after year.
Compliance Matters
The Incentives Are Real. So Are the Obligations.
Act 60 decrees are not set-and-forget. They require annual reports to DDEC, OIN oversight, Hacienda filings, residency documentation for individual investors, and charitable contribution compliance. Decrees can be revoked for non-compliance — and the IRS pays close attention to Puerto Rico tax incentive claims. We keep our clients in full compliance so the incentives hold up.
Annual DDEC Reports
Required every year to maintain your decree in good standing.
OIN Oversight
The Office of Industrial Incentives monitors decree compliance on an ongoing basis.
Hacienda Tax Filings
Puerto Rico income tax returns must be filed correctly and on time.
Residency Documentation
Individual investor decrees require documented bona fide Puerto Rico residency.
Ready to Explore an Act 60 Decree?
Schedule a consultation with Alejandro to discuss your eligibility, the right decree type for your situation, and what the process looks like from start to finish.
We serve clients relocating to Puerto Rico and businesses already operating on the island.