Puerto Rico has developed a strong tax code coupled with unique tax breaks and advantages making paying taxes easier and less costly.
Puerto Rico offers:
• Numerous and significant tax advantages
• Bilingual workforce
• Nationally-ranked schools
• US jurisdiction and central location
• Attractive and supportive business environment
Since the introduction of Law 73 of 2008, Puerto Rico has fostered an excellent business climate and continues to provide and enhance a host of tax incentives for the relocation and expansion of business facilities. On January 17, 2012 the Puerto Rico government enacted Act #20 Export Services Act and Act #22 Individual Investors Act.
To enjoy the benefits granted under these Acts, you will need to apply for and obtain a tax decree under the applicable Act, and enter into a tax relief and investment contract which will be signed by the Secretary of the Department of Economic Development and Commerce of Puerto Rico. MOVETOPR assists clients with the tax decree application process and with other relocation needs and requirements.
The Export Services Act # 20, as amended on July 11 of 2012 includes the following incentives:
• 4% maximum corporate tax rate
• 100% tax exemption on dividends from export services businesses (for residents of Puerto Rico)
• 60% exemption from municipal license taxes
• Decree duration of 20 years, guaranteeing the benefits
• Individuals and corporations who "reside" in Puerto Rico are not subject to any US Federal taxation.
Act #22 to Promote the Relocation of Individual Investors provides that when an individual moves to Puerto Rico and becomes a "resident individual investor" (RII), this individual may enjoy significant tax advantages. The individual must be a Puerto Rico resident and must not have been a resident of Puerto Rico during the 15 years prior to January 17, 2012.
Any gain for investment appreciation that was accrued prior to becoming a RII will be taxed at: a) 10% if such gain is recognized within 10 years after the individual became a RII. b) 5% if the gains are recognized after the individual has been a RII for 10 years.
In addition, the law contemplates other tax benefits:
• No taxes on dividends
• No taxes on interest
• No taxes on short or long term capital gains
• As with the other laws, individuals and corporations who "reside" in Puerto Rico are not subject to any US Federal taxation.
Puerto Rico can be considered the only tax haven within the US jurisdiction. By taking full advantage of the current Puerto Rico tax law individuals and companies can reduce taxes, enjoy a Caribbean life style, and keep their US passport.
Puerto Rico also provides tax shelters that can favor certain individuals and companies such as Hedge Funds. For example a Puerto Rico Hedge Fund with $300 million of assets under management can save at $3.4 million a year. Puerto Rico does not levy taxes on any profits or dividends remitted or retained.