How to Apply for an Act 60 Decree: Your Complete Step-by-Step Guide

CRITICAL 2025 UPDATE: Act 60 has been extended through 2055, guaranteeing stability for an additional 30 years. New applicants starting January 2026 will face a 4% rate on passive income and must certify they have not been Puerto Rico residents for the previous 6 years. The application process maintains its structure but with greater emphasis on compliance and documentation.

Applying for an Act 60 decree may seem like a complex process, but with proper preparation and understanding each step, you can navigate the system efficiently. This guide will take you from initial evaluation to final approval of your decree.

Reading time: 15 minutes to master the entire process.

Before You Begin: The Essentials

Are You Ready to Apply?

Answer these questions first:

Have you determined your specific eligibility?

Do you have clarity on which chapter to apply for?

Do you have the necessary capital for the process?

Does your timeline allow for a 4-6 month process?

If you answered "yes" to all, you're ready to proceed!

Realistic Timeline

Complete process: 4-6 months

Pre-application and preparation: 4-8 weeks

Formal application: 2-4 weeks to prepare

DDEC review: 12-16 weeks

Approval and setup: 2-4 weeks

Step 1: Evaluation and Pre-Planning

Determine Your Optimal Chapter

Chapter 2 - Individual (Ex-Act 22)

For: Investors, traders, wealthy individuals

Benefit: 0% capital gains tax

Key requirement: Must not have been a PR resident for 15 years

Chapter 3 - Export Services (Ex-Act 20)

For: Companies providing exportable services

Benefit: 4% corporate tax rate

Key requirement: Services exported outside PR

Chapter 4 - Manufacturing

For: Manufacturing companies and R&D

Benefit: 4% industrial rate + additional incentives

Key requirement: Production or R&D in Puerto Rico

Preliminary Financial Analysis

Calculate your potential ROI:

Chapter 2 Example:

Estimated annual gains: $1,000,000

Current taxes (23.8%): $238,000

Taxes with Act 60 (0%): $0

Annual savings: $238,000

Process cost: ~$50,000

ROI: 476% in year 1

Chapter 3 Example:

Corporate income: $2,000,000

Current taxes (21%): $420,000

Taxes with Act 60 (4%): $80,000

Annual savings: $340,000

Process cost: ~$75,000

ROI: 453% in year 1

Step 2: Documentation Preparation

Personal Documents (All Chapters)

Basic Documentation:

[ ] Valid U.S. passport

[ ] Birth certificate

[ ] Personal financial statements (last 3 years)

[ ] Tax returns (last 5 years)

[ ] Criminal background certification

[ ] Proof of financial solvency

Chapter-Specific Documents

Chapter 2 - Individual:

[ ] Evidence of non-residence in PR (last 15 years)

[ ] Detailed investment portfolio

[ ] Declaration of investment intentions

[ ] Charitable donations plan ($10,000 minimum)

[ ] Evidence of ability to comply with 183 days/year

Chapter 3 - Export Services:

[ ] Company incorporation documents

[ ] Corporate financial statements (3 years)

[ ] Contracts with clients outside PR

[ ] Detailed business plan

[ ] Evidence of exportable services

[ ] Local employee hiring plan

Chapter 4 - Manufacturing:

[ ] Detailed industrial plan

[ ] Evidence of committed investment

[ ] Feasibility studies

[ ] Preliminary environmental permits

[ ] Employment and training plan

[ ] Economic impact analysis

Specialized Financial Documents

Audited Financial Statements

Required for: Chapters 3 and 4

Period: Last 3 years

Auditor: CPA licensed in U.S. or PR

Estimated cost: $5,000-15,000

Financial Projections

Timeline: Minimum 5 years

Include: Income, expenses, employment, investments

Detail level: Monthly year 1, annual years 2-5

Professional: Prepared by CPA or financial consultant

Step 3: Corporate Structure and Legal Setup

Entity Establishment

Chapter 2 - Individual:

Generally doesn't require new corporation

May benefit from LLC for investments

Trust structures for estate planning

Chapter 3 - Export Services:

PR corporation required

Typical structure: LLC or C Corporation

Double taxation considerations

Chapter 4 - Manufacturing:

Industrial corporation required

More complex structure due to regulations

Possible joint ventures or partnerships

Banking and Operational Setup

PR Bank Accounts:

Corporate account at local bank

Documentation of fund sources

Anti-money laundering compliance

Physical Address:

Office or address in Puerto Rico

Cannot be P.O. Box

Must be accessible for inspections

Step 4: Application Preparation

Main Forms

Basic Application (All Chapters):

Form DDEC-001 (General Application)

Chapter-specific form

Required sworn statements

Business or investment plan

Supporting Documents

Detailed Business Plan:

For Chapter 3 (Export Services):

Executive Summary

- Company vision and mission
- Services to be exported
- Target markets

• Market Analysis

- Service demand outside PR
- Competition and differentiation
- Pricing strategy
• Operational Plan

- Organizational structure
- Hiring plan (3-5 employees minimum)
- Technology infrastructure
• Financial Projections

- 5-year projected P&L
- Cash flow statements
- Break-even analysis

For Chapter 4 (Manufacturing):


• Industrial Plan

- Production process description
- Required machinery and equipment
- Production capacity
• Investment Plan

- Detailed initial investment
- Implementation timeline
- Financing sources
• Economic Impact

- Direct and indirect jobs
- Projected local purchases
- Estimated exports

Fee Structure and Payments

Government Fees:


• Initial application: $5,000


• Technical evaluation: $2,500


• Annual maintenance fee: $5,000


• Total government: $12,500

Professional Costs:


• Specialized attorney: $25,000-50,000


• Accountant/CPA: $5,000-15,000


• Strategic consultant: $10,000-25,000


• Total professional: $40,000-90,000

Additional Costs:


• Financial audits: $5,000-15,000


• Documentation and translations: $2,000-5,000


• Travel and logistics: $3,000-8,000


• Total additional: $10,000-28,000

ESTIMATED TOTAL COST: $62,500-130,500

Step 5: Filing Process

Pre-filing

Preliminary DDEC Meeting:


• When: 2-4 weeks before filing


• Purpose: Document validation


• Duration: 1-2 hours


• Participants: Your legal team + DDEC official

Final Checklist:


• [ ] All documents translated (if necessary)


• [ ] Forms completed and notarized


• [ ] Government fees ready to pay


• [ ] Legal team confirmed for filing

Formal Filing

Filing Day:

Arrive at DDEC (9:00 AM recommended)

Document delivery (initial review)

Fee payment (cashier's check preferred)

Official receipt (keep multiple copies)

Official timeline (confirm follow-up dates)

Documents to bring:

Original and 3 copies of entire application

USB with digital versions

Cashier's checks for all fees

IDs of all signatories

Post-filing Immediate

First 48 hours:

Email confirmation of receipt

Assigned case number

Reviewer contact information

Next steps communicated

Step 6: DDEC Review Process

Phase 1: Initial Review (4-6 weeks)

What they review:

Documentation completeness

Basic eligibility

Compliance with formal requirements

Possible outcomes:

Approval to continue: Proceeds to detailed review

Information request: 30 days to respond

Initial rejection: Rare, but possible if fundamental problems exist

Phase 2: Technical Review (6-8 weeks)

Specialized teams review:

Economic Team: Financial viability

Legal Team: Regulatory compliance

Technical Team: Operational feasibility (Chapter 4)

Fiscal Team: Government revenue impact

During this phase:

Possible additional information requests

Clarification calls

Commercial reference reviews

Phase 3: Final Review and Approval (2-4 weeks)

Executive approval:

Senior director review

Final approval by DDEC Secretary

Official decree preparation

Step 7: Communication During the Process

Follow-up Strategies

Contact Calendar:

Week 2: Receipt confirmation

Week 6: Initial review status

Week 10: Technical review update

Week 14: Final decision timeline

Best Practices:

Always in writing (email)

Include case number in subject line

Maintain professional and patient tone

Copy your attorney on communications

Handling Additional Requests

When DDEC requests more information:

Respond within 30 days (strict deadline)

More information is better than insufficient information

Use same format as original application

Include cover letter explaining what you're sending

Step 8: Approval and Activation

Receiving the Decree

The official decree includes:

Specific terms of your benefits

Compliance obligations

Validity dates (start and end)

Specific reporting requirements

First steps post-approval:

Register decree with Treasury

Setup accounting for compliance

Notify accountants and advisors

Operational implementation per plan

Benefit Activation

Chapter 2 - Individual:

Immediate fiscal residence change

Setup PR day tracking

Activate portfolio in PR banks

Chapter 3 - Export Services:

Corporate tax rate change

Employee payroll setup

Export operations activation

Chapter 4 - Manufacturing:

Industrial incentives application

Production reporting setup

Duty-free importing activation

Common Mistakes to Avoid

Mistake #1: Incomplete Documentation

Problem: Filing without all documents
Result: 4-8 additional week delays
Solution: Triple-check with attorney before filing

Mistake #2: Unrealistic Projections

Problem: Overly optimistic business plan
Result: Technical reviewer pushback
Solution: Conservative, well-founded projections

Mistake #3: Not Understanding Timeline

Problem: Expectations of quick approval
Result: Frustration and hasty decisions
Solution: Plan for 6 months start to finish

Mistake #4: DIY Legal Work

Problem: Attempting process without attorney
Result: Rejections due to technical errors
Solution: Invest in qualified legal representation

Mistake #5: Not Preparing for Relocation

Problem: Not planning transition to PR
Result: Delays in benefit activation
Solution: Plan relocation parallel to application

Expert Tips for Successful Application

Tip #1: Choose the Right Timing

Best timing for filing:

January-March: DDEC less saturated

Avoid November-December: holidays and budget

Consider your company's fiscal year

Tip #2: Over-Document Everything

Golden rule: If you doubt whether to include something, include it

Better too much information than insufficient

DDEC prefers completeness over brevity

Extra documentation never hurts an application

Tip #3: Relationship Building

Strategic networking:

Attend DDEC and government affairs events

Connect with other successful beneficiaries

Maintain relationships with local professionals

Tip #4: Always Have Plan B Ready

Contingency planning:

What if you're rejected?

Can you reapply with changes?

Do you have backup tax optimization plans?

How Virtus Advisory Facilitates Your Process

Our Proven Process

Phase 1: Strategic Evaluation (2 weeks)

Complete eligibility analysis

Optimal chapter determination

Specific ROI calculation

Personalized roadmap

Phase 2: Document Preparation (4-6 weeks)

Coordination of all documentation

Professional business plan preparation

Complete legal review

Pre-validation with DDEC contacts

Phase 3: Filing and Management (12-16 weeks)

Professional filing

Systematic DDEC follow-up

Handle any additional requests

Communications strategy

Phase 4: Activation and Setup (2-4 weeks)

Complete operational setup

Transition planning

Compliance system implementation

Ongoing support activation

Our Competitive Advantages

Established Relationships:

Direct DDEC contacts

Relationships with key decision makers

Understanding of specific preferences

Proven Track Record:

98% approval rate in last 3 years

Average processing time: 14 weeks (vs. 20+ industry average)

Zero decrees lost due to compliance issues

360 Support:

Legal, accounting, strategic under one roof

Coordination with external providers

Guaranteed post-approval support

Available Packages

Basic Package - $25,000

Evaluation and strategy

Document preparation

Filing and basic follow-up

Premium Package - $45,000

Everything above +

Advanced business planning

Aggressive follow-up and relationship leverage

6 months post-approval support

VIP Package - $75,000

Complete white-glove service

Expedited processing when possible

Concierge relocation support

1 year guaranteed compliance

Your Next Step

Are you ready to begin your Act 60 decree application process?

FREE strategic consultation where:
✅ We'll evaluate your specific eligibility
✅ Determine the optimal chapter for you
✅ Calculate your real ROI and timeline
✅ Develop your personalized roadmap
✅ Give you exact cost estimates

Don't leave your fiscal future to chance. The Act 60 process is complex, but with the right guidance, it can change your financial life forever.

Conclusion: Your Path to Tax Freedom

Applying for an Act 60 decree is the most important decision you can make for your tax optimization. While the process requires meticulous preparation and patience, the rewards are extraordinary:

• Tax savings of hundreds of thousands annually


• Lifestyle upgrade in a tropical paradise


• Networking with high-achiever community


• Tax stability for decades

The process is demanding but manageable with proper preparation and support.

Your moment is now. Every month you delay is money lost to taxes. The Puerto Rico government is actively incentivizing these applications, but windows of opportunity don't last forever.

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*Ready to take the first step toward your Act 60 decree? Our team of experts guides you through every step of the process with the industry's highest success rate.*