“You can minimize your taxes in Puerto Rico in ways that you can’t do anywhere else in the world.”John Paulson, Hedge Fund Manager and Act 20 Trailblazer
Act 20 – The Export Services Act
Act 20 offers business owners the ability to immediately increase corporate profits simply through relocation. This powerful financial strategy should be evaluated by executives alongside traditional cost cutting measures and operational improvements. Since inception, the program has created thousands of new jobs and brought more than one billion dollars in revenue to Puerto Rico.
Many industries qualify, but only income derived from exporting services from Puerto Rico can be included under the reduced tax rate. As of 2018, 2,000 companies have capitalized on this one-of-a-kind opportunity, receiving the following benefits:
- 4% flat corporate income tax vs. 21% in the US
- 100% exemption on profit and earnings distributions
- 100% exemption on property taxes
- 60% exemption on municipal taxes
The Legislative Assembly of Puerto Rico has explicitly listed 20+ industries that can qualify for Act 20 treatment. In addition to the following list, any other service may be acceptable depending on various economic factors.
- Accounting
- Advertising
- Agricultural
- Architecture
- Consulting
- Distribution
- Engineering
- Financial Services
- Investment Banking
- Legal
- Manufacturing
+ More
- Medical
- Public Relations
- R&D
- Software
- Telecom
- Trading
In addition to qualifying as an eligible service, Puerto Rico has straightforward procedures that must be met for Act 20 compliance.
- Receive approval from Puerto Rican government (6 week waiting period)
- Pay $750 Application Fee
- Must be a new Puerto Rican business with no nexus elsewhere
“You can minimize your taxes in Puerto Rico in ways that you can’t do anywhere else in the world.”John Paulson, Hedge Fund Manager and Act 20 Trailblazer
Act 20
Act 20 offers business owners the ability to immediately increase corporate profits simply through relocation. This powerful financial strategy should be evaluated by executives alongside traditional cost cutting measures and operational improvements. Since inception, the program has created thousands of new jobs and brought more than one billion dollars in revenue to Puerto Rico.
Many industries qualify, but only income derived from exporting services from Puerto Rico can be included under the reduced tax rate. As of 2017, 2,000 companies have capitalized on this one-of-a-kind opportunity, receiving the following benefits:
- 4% flat corporate income tax v. 21% in the US
- 100% exemption on profit and earnings distributions
- 100% exemption on property taxes
- 60% exemption on municipal taxes
The Legislative Assembly of Puerto Rico has explicitly listed 20+ industries that can qualify for Act 20 treatment. In addition to the following list, any other service may be acceptable depending on various economic factors.
- Accounting
- Advertising
- Agricultural
- Architecture
- Consulting
- Distribution
- Engineering
- Financial Services
- Investment Banking
- Legal
- Manufacturing
- Medical
- Public Relations
- R&D
- Software
- Telecom
- Trading
+ More
In addition to qualifying as an eligible service, Puerto Rico has straightforward procedures that must be met for Act 20 compliance.
- Receive approval from Puerto Rican government (6 week waiting period)
- Pay $750 Application Fee
- Must be a new Puerto Rican business with no nexus elsewhere
- Employ 3 full-time employees within 6 months of operation, and 5 full-time employees within 2 years of operation. Act 22 decree holders count as an employee toward this requirement.