Act 60 (20/22)

Puerto Rico's ACT 60 Law - Your Path to Tax Advantages and Paradise Living

Puerto Rico, often referred to as the "Island of Enchantment," is not just known for its pristine beaches, rich culture, and breathtaking landscapes. It has also become a hotspot for individuals seeking tax advantages and a high-quality lifestyle. At the heart of this allure is Puerto Rico's ACT 60 law, a game-changer for those looking to benefit from reduced taxes and a tropical paradise.

What is ACT 60?

The Puerto Rico Incentives Code, commonly known as ACT 60, is a comprehensive tax incentive program designed to attract individuals and businesses to the island. This legislation offers a wide range of tax benefits and incentives, with the primary aim of boosting economic development, creating jobs, and driving investment in Puerto Rico.

Benefits of ACT 60:

ACT 60 provides a multitude of benefits, which make Puerto Rico a compelling destination for those seeking a favorable tax environment and a superb quality of life:

1. Significant Tax Savings: Under ACT 60, eligible individuals and businesses can enjoy a 4% corporate tax rate and a 0% tax rate on most types of passive income, such as dividends and capital gains.

2. Individual Tax Benefits: Resident individuals who meet the requirements can reduce their income tax to 0% on certain dividends, interest, and long-term capital gains.

3. Economic Incentives for Businesses: Businesses that establish or expand operations in Puerto Rico may qualify for attractive incentives, including a 4% corporate tax rate, 100% tax exemption on dividends from Puerto Rican subsidiaries, and a 90% reduction in property taxes.

4. Act 60 Certainty Decree: Participants in the program receive a decree from the government, providing certainty and clarity on the benefits they qualify for, typically for a 15-year period, extendable for an additional 15 years.

5. No U.S. Federal Taxes: Puerto Rico is a U.S. territory, but residents are generally not subject to certain U.S. federal taxes on Puerto Rican-source income.

6. Beautiful Island Lifestyle: Beyond the tax benefits, Puerto Rico offers a diverse and vibrant culture, stunning beaches, lush landscapes, and a warm climate, making it an ideal location to live and work.

Basic Requirements for ACT 60 Eligibility:

While the benefits of ACT 60 are enticing, there are specific requirements to meet to qualify for this program:

1. Residency: To be eligible for individual tax benefits, you must become a bona fide resident of Puerto Rico. This involves spending at least 183 days per year on the island and establishing substantial ties, such as purchasing a home and obtaining a local driver's license.

2. Business Activity: Businesses seeking tax incentives must establish a substantial presence in Puerto Rico and actively engage in eligible activities, such as manufacturing, services, and exportation of goods.

3. Compliance: All participants in ACT 60 must comply with the reporting and compliance requirements outlined by the Puerto Rico Treasury Department.

4. Investment and Job Creation: To qualify for certain business incentives, companies may need to make substantial investments and create jobs for Puerto Rican residents.

Why Choose Puerto Rico for ACT 60?

Puerto Rico is uniquely positioned as an attractive destination for individuals and businesses alike, due to its combination of tax benefits and lifestyle advantages:

1. Strategic Location: Its strategic location in the Caribbean offers easy access to both North and South America, making it a hub for international business.

2. Diverse Culture: Puerto Rico is a melting pot of cultures, with a rich history and a fusion of influences from indigenous Taino, Spanish, African, and American traditions.

3. Language: English and Spanish are both official languages, and many locals are bilingual, making it accessible to a diverse international community.

4. Education and Healthcare: The island boasts a well-developed education system and quality healthcare facilities.

5. Paradise Living: With a tropical climate, beautiful beaches, and a laid-back lifestyle, Puerto Rico is the epitome of paradise living.

Puerto Rico's ACT 60 law is a golden opportunity for those looking to optimize their tax situation while enjoying the benefits of life in a tropical paradise. With its alluring tax incentives, rich culture, and vibrant lifestyle, Puerto Rico has become an attractive choice for individuals and businesses seeking a tax-friendly environment and a high quality of life. If you're looking to explore the advantages of ACT 60, Puerto Rico may just be your ticket to a brighter financial future and a taste of Caribbean paradise.