Puerto Rico Act 60
The most comprehensive tax incentive program in U.S. jurisdiction history. 0% capital gains, 4% corporate tax, and contractual certainty backed by federal law.
The Strategic Advantage
Puerto Rico Act 60 represents the most sophisticated tax optimization framework available within U.S. jurisdiction. Unlike offshore structures that create compliance complications, Act 60 provides contractual certainty backed by U.S. federal law and territorial sovereignty.
Originally established through Act 20 (export services) and Act 22 (individual investors) in 2012, these incentives were consolidated and enhanced under Act 60 in 2019. The law now includes multiple chapters addressing different business models and investor profiles.
What distinguishes Act 60 from other tax strategies is its foundation in U.S. constitutional law, providing legal certainty that offshore structures cannot match while delivering tax benefits that mainland jurisdictions cannot offer.
By The Numbers
Act 60 Program Chapters
Each chapter addresses specific business models and investment strategies, providing targeted tax relief with clear qualification requirements.
Select a chapter above to view detailed benefits and requirements
Key Tax Benefits
- 0% capital gains tax on appreciation after becoming a bona fide resident
- 0% tax on dividends and interest from Puerto Rico sources
- 5% tax rate on pre-move gains if held 10+ years post-residency
- Cryptocurrency included as qualifying investment income
Qualification Requirements
- Must not have been a PR resident in prior 15 years
- Meet bona fide residency test (183 days, tax home, closer connection)
- $5,000 annual donation to Puerto Rico non-profits
- Purchase real estate within 2 years of decree
Related Reading
The Application Process
From initial assessment to decree issuance, here is what to expect when applying for Act 60 benefits.
- 1
Initial Assessment
1-2 weeksEvaluate your business model, income sources, and goals to determine the best Act 60 chapter for your situation. - 2
Document Preparation
2-4 weeksGather required documents including business plans, financial statements, background checks, and proof of economic activity. - 3
Application Submission
1 weekSubmit complete application to DDEC (Department of Economic Development and Commerce) with all supporting documentation. - 4
DDEC Review Process
2-4 monthsDDEC reviews application, may request additional information, and conducts due diligence on applicant and business. - 5
Decree Issuance
2-4 weeksUpon approval, receive your official tax incentive decree with specific terms, conditions, and benefit periods. - 6
Ongoing Compliance
OngoingMaintain decree benefits through annual reporting, charitable donations, and meeting all operational requirements.
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Puerto Rico vs. Global Jurisdictions
Comparative analysis of tax rates and regulatory environments across major business jurisdictions worldwide.
| Jurisdiction | Corporate Tax | Capital Gains | Regulatory Status |
|---|---|---|---|
Puerto Rico (Act 60) | 4% | 0% | U.S. Territory |
Delaware | 21% | 23.8% | High Tax State |
Singapore | 17% | Varies | Foreign Compliance |
Ireland | 12.5% | 33% | EU Regulations |
Cayman Islands | 0% | 0% | Offshore Jurisdiction |
Maintaining Your Benefits
Securing your decree is just the beginning. Ongoing compliance is essential to maintaining your tax incentives.
Frequently Asked Questions
Puerto Rico Act 60-2019, also known as the Puerto Rico Incentives Code, consolidates various tax incentive programs into a single law. It provides significant tax benefits for individuals and businesses that relocate to Puerto Rico, including 0% tax on capital gains for individual investors and a 4% corporate tax rate for export service businesses.
No, U.S. citizenship is not required. However, you must become a bona fide resident of Puerto Rico by spending at least 183 days per year on the island, establishing your tax home there, and demonstrating closer connections to Puerto Rico than to any other jurisdiction. For detailed requirements, see our complete bona fide residency guide.
Under Act 60 Chapter 3 (Export Services), eligible businesses pay a fixed 4% corporate tax rate on income derived from services provided to clients outside of Puerto Rico. This compares to the standard U.S. corporate rate of 21% and state taxes that can push the combined rate to 30% or higher.
The timeline varies by chapter. Export Services (Chapter 3) applications typically take 4-6 months, while Individual Resident Investor (Chapter 2) applications may take 6-8 months. Working with experienced advisors can help ensure a smoother application process.
Under Act 60 Chapter 2 (Individual Resident Investor), Puerto Rico residents pay 0% tax on capital gains earned after becoming a bona fide resident. Gains on assets held before residency may qualify for a 5% rate if held for at least 10 years after becoming a resident.
You can maintain business interests on the mainland, but the structure matters significantly for tax purposes. Income must be Puerto Rico-sourced to receive Act 60 benefits. Our team helps structure businesses to maximize compliant tax benefits while maintaining necessary mainland operations.
To qualify as a bona fide Puerto Rico resident, you must: (1) be physically present in Puerto Rico for at least 183 days during the tax year, (2) have your tax home in Puerto Rico, and (3) have closer connections to Puerto Rico than to any other jurisdiction.
Unlike offshore jurisdictions, Puerto Rico offers unique advantages: it is a U.S. territory (no visa or foreign compliance issues), uses U.S. banking and legal systems, has no language barrier for English speakers, and provides legitimate tax benefits recognized by the IRS.
Read our complete comparison: Puerto Rico vs global jurisdictions
Act 60 decree holders must meet ongoing obligations including annual reports to DDEC, charitable donations (varying by chapter), maintaining required employment levels, and filing both Puerto Rico and federal tax returns correctly.
DDEC conducts periodic audits to ensure compliance with decree terms. Being prepared with proper documentation is essential to maintaining your tax benefits.
Deep-Dive Resources
Explore our comprehensive guides on Act 60 topics, from application strategies to industry-specific benefits.