PR TAX INCENTIVES
Act 60: Plan Your
Next Move in
Puerto Rico
Tax information reviewed October 11, 2026
Establish. Expand. Invest.
Puerto Rico’s incentives can play a meaningful role in your business and investment plans. Making the opportunity work for you begins with understanding your objectives, the market and the decisions ahead.
Whether you are exploring Puerto Rico or planning your next step here, let’s put your plans into perspective.
Discuss Your Puerto Rico PlansExplore the Programs
SELECTED INCENTIVES
Understand the opportunity.
Know the conditions.
Benefits vary by program and eligibility. These highlights do not represent a single package available to every applicant.
Export income
PR tax on eligible net export income.
Conditions
For approved export operations; local sales and unrelated income follow their own rules.
View program details ↗Capital gains
PR tax on qualifying post-residency appreciation through 2035.
Conditions
Eligible resident-investor applications through Dec. 31, 2026. Applications from 2027: generally 4% through 2055.
View program details ↗Property tax
Exemption on qualifying business property.
Conditions
A standard benefit in export and several business programs; it does not cover every property the owner holds.
View program details ↗Municipal license tax
Exemption on covered business activity.
Conditions
Generally applies to the municipal license tax on business volume under eligible business decrees.
View program details ↗Decree duration
Years for many qualifying business decrees.
Conditions
15-year initial term; an additional 15 years may be requested and requires approval. Individual-investor rules differ.
View program details ↗Profit distributions
PR tax exemption on qualifying distributions.
Conditions
Available under export, manufacturing, tourism and certain other programs; the business may still owe income tax.
View program details ↗Qualifying new SMEs
PR tax on eligible income for the first 5 years.
Conditions
Generally 4% for the remaining decree term. Requires a qualifying new SME and approved activity.
View program details ↗Agricultural income
Exemption on direct eligible agricultural income.
Conditions
For qualifying bona fide agricultural businesses; the taxable remainder is subject to ordinary rules.
View program details ↗Selected Puerto Rico benefits from separate programs, subject to eligibility, decree terms and ongoing compliance. Federal and foreign tax treatment must be evaluated separately.
YOUR PLANS. A BROADER PERSPECTIVE.
Business experience.
Puerto Rico insight.
Carlos Aponte
As a business owner and real estate strategist, I connect property decisions with how businesses operate, where they can grow and what an investment needs to achieve.
Whether your plans involve a home, a commercial location, land or an investment property, I bring market knowledge, negotiating experience and careful attention to your priorities.
Location with purpose.
Evaluate the setting, access and property characteristics that support the way you intend to live, operate or invest.
Room for growth.
Bring operating needs, expansion plans and changing market conditions into the property decision.
Investment in context.
Consider pricing, ownership costs and intended use together, with a clear understanding of the assumptions behind the opportunity.
Real estate and business guidance complements the work of your tax and legal advisers, who evaluate eligibility, tax treatment and decree requirements.
THE FRAMEWORK BEHIND THE OPPORTUNITY
Clarity before
the next decision.
Understanding Act 60Understand how eligible activities, decree requirements and ongoing obligations fit into your Puerto Rico plans.
Start with the activity, then the incentive.
Act 60, Puerto Rico’s Incentives Code, brings multiple economic-development programs into one legal framework. It covers eligible export services, manufacturing, tourism, agriculture, energy and other activities, as well as specific incentives for qualifying individuals. The names “Act 20” and “Act 22” still appear in conversation, but new applications must be evaluated under the current law and the relevant program.
Understand what a decree actually covers.
A decree is the government’s grant defining the approved activity, tax treatment, effective period and obligations. Registering an LLC, moving to Puerto Rico or purchasing a property does not by itself create eligibility. A business serving customers outside Puerto Rico must meet the export rules; an individual-investor application follows a different set of residency and investment-income rules.
Plan for approval and continued compliance.
The application requires supporting information and government review. Operations, employment or investment commitments, required reports and other conditions depend on the program and decree. Earlier grants may retain different terms. A useful feasibility review considers expected savings alongside staffing, facilities, professional fees, reporting and operating costs.
Connect the property to the business plan.
For a business location, assess permitted use, infrastructure, access and the space needed to carry out the approved activity. For a relocation, evaluate housing and the residency requirements with your advisers. APONTE helps connect those property decisions with a coordinated plan; qualified tax and legal professionals determine eligibility and tax treatment.
Understanding the Tax BenefitsSee what the figures mean, which activities they relate to and why the conditions matter.
Income tax: the taxable profit
A preferential business rate generally applies to eligible net income after allowable deductions, not gross receipts. Illustratively, $100,000 of qualifying taxable profit at 4% produces $4,000 of PR income tax before credits or other applicable adjustments. Revenue outside the decree is evaluated separately.
Distributions: a separate layer
A 100% exemption on qualifying dividends or profit distributions is separate from the business’s income tax. It is available in several programs, including export, manufacturing and tourism. It does not automatically exempt an owner’s salary, unrelated earnings or federal and foreign obligations.
Capital gains: timing matters
Eligible resident investors under the regime for applications through December 31, 2026 may receive 0% PR tax on qualifying post-residency appreciation recognized through 2035. For applications from January 1, 2027, the general rate becomes 4% through 2055, subject to any more favorable statutory treatment. Pre-residency appreciation follows separate rules.
Property tax: the covered assets
A 75% exemption leaves 25% of the otherwise applicable tax on qualifying property. For example, a covered $10,000 property-tax liability would become $2,500 if the full 75% exemption applies. The grant and actual use of the asset matter; a beneficiary’s unrelated residence or investment property is not automatically included.
Municipal tax: business volume
A 50% municipal license tax exemption generally reduces the otherwise applicable tax on covered business volume by half. This tax has a different base from income tax. Construction excise taxes, fees and other municipal charges must be checked separately rather than assumed to receive the same treatment.
Credits, cash assistance and time
A tax credit can offset a qualifying tax liability; a grant or subsidy is a separate form of assistance with its own approval and funding conditions. Many business decrees begin with a 15-year term and may qualify for an approved 15-year extension. Special programs and individual investors follow their own periods.
EXPLORE THE PROGRAMS
Find the context
for your plans.
Explore the activities, potential benefits and requirements associated with each program. Use these summaries to identify the questions that deserve closer attention.
New SMEs · General Incentives2% on qualifying income for 5 years; generally 4% thereafter
Eligible example: qualifying new SME with an eligible decree
- Tax on Qualifying Income
- 2% for 5 years; generally 4% thereafter
- Dividends or Profit Distributions
- Generally 0% PR tax, unless the underlying program provides otherwise
- Additional Benefits
- 100% property and municipal tax exemptions for 5 years; generally 75% / 50% thereafter
What makes the SME benefit useful
The lower introductory rate can preserve working capital during the first five years of a qualifying new small or medium enterprise. Covered property and municipal taxes may also receive 100% exemption during that initial period, followed by 75% and 50%, respectively. A new company is not automatically an eligible new SME; the activity, statutory definition and decree must qualify.
Act 60 reference: Sec. 2012.01.
Individual Resident Investors0% PR tax on eligible investment earnings through 2035 · applications by December 31, 2026
Eligible example: qualifying resident investor
- Tax on Qualifying Income
- Eligible investment earnings: 0% PR tax through 2035 for applications submitted by December 31, 2026; generally 4% PR tax through 2055 for applications from January 1, 2027
- Dividends or Profit Distributions
- Eligible dividends follow the applicable investor regime
- Additional Benefits
- Eligible pre-relocation long-term appreciation may qualify for 5% PR tax after ten years of residency, if recognized before 2036 for applications through 2026, or before 2056 for applications from 2027. Other timing follows ordinary rules.
Separate relocation from investment-income planning
The regime addresses qualifying interest, dividends and investment gains rather than employment compensation or every business receipt. The application date determines the applicable regime, subject to transition elections. Appreciation accrued before becoming a resident must be separated from later appreciation. Residency, required contributions, a qualifying principal residence and annual compliance require individual review; federal source-of-income rules remain separate.
Act 60 reference: Secs. 2022.01–2022.02; 6020.03; 6020.10.
ExportGenerally 4% on qualifying net export income
Eligible example: approved service exporter
- Tax on Qualifying Income
- Generally 4% on qualifying net export income
- Dividends or Profit Distributions
- 0% PR tax on qualifying export-profit distributions
- Additional Benefits
- Generally 75% property / 50% municipal license tax exemptions
Match the service and the customer relationship
Eligible services carried out from Puerto Rico for customers outside the island may qualify when the statutory export and nexus conditions are met. The 4% rate concerns approved net export income; qualifying distributions can be fully exempt from PR income tax. The standard property and municipal benefits can help with facility costs. Review the proposed services, where their benefit is received, staffing and a bona fide Puerto Rico operation before choosing a location.
Act 60 reference: Secs. 2031.01; 2032.01–2032.04.
FinanceGenerally 4% on authorized qualifying income; bank units have separate rules
Eligible example: approved international financial entity
- Tax on Qualifying Income
- Generally 4% on authorized qualifying income; bank units have separate rules
- Dividends or Profit Distributions
- Certain distributions to domestic shareholders or partners: 6%
- Additional Benefits
- Generally 75% property / 50% municipal tax exemptions; insurers and funds have separate regimes
A regulated operation with its own rules
An international financial entity requires the applicable financial authorization as well as incentive approval. The stated 4% concerns authorized qualifying income. Distributions to qualifying domestic shareholders or partners can be subject to 6%, demonstrating why the 100% dividend exemption cannot be applied across all sectors. International insurers and private-equity funds have different eligibility requirements and tax regimes.
Act 60 reference: Sec. 2042.01.
Tourism · Visitor Economy4% on qualifying tourism income
Eligible example: approved hotel operator
- Tax on Qualifying Income
- 4% on qualifying tourism income
- Dividends or Profit Distributions
- 0% PR tax on qualifying tourism-profit distributions
- Additional Benefits
- Up to 75% property / 50% municipal tax exemptions. Eligible tourism investment: 30% or 40% credit routes, subject to separate requirements and approval.
Evaluate the approved tourism activity
An eligible tourism operation may combine 4% tax on qualifying tourism income with exemption on qualifying profit distributions, up to 75% property-tax exemption and up to 50% municipal-tax exemption. Eligible tourism investment may qualify for a 30% or 40% credit route under separate rules and approval. Acquiring a vacation home or advertising a short-term rental alone does not establish eligibility.
Act 60 reference: Secs. 2052.01–2052.03; 3010.01.
ManufacturingGenerally 4% on qualifying income; special manufacturing rules may differ
Eligible example: approved software developer
- Tax on Qualifying Income
- Generally 4% on qualifying income; special manufacturing rules may differ
- Dividends or Profit Distributions
- Generally 0% PR tax on qualifying distributions
- Additional Benefits
- Generally 75% property / 50% municipal license tax exemptions; eligible research credits
Consider operations and reinvestment together
Eligible manufacturing activities can pair the general 4% income-tax rate with exemption on qualifying distributions and relief on covered property and municipal taxes. Certain research, equipment and local-purchasing investments can have additional incentives with their own documentation and approval requirements. Software or other technology activities require classification under the applicable eligible activity; specialized manufacturing regimes may have different rates.
Act 60 reference: Secs. 2062.01–2062.06; Subtitle C.
Infrastructure and Green Energy4% on qualifying green-energy income
Eligible example: approved renewable-energy business
- Tax on Qualifying Income
- 4% on qualifying green-energy income
- Dividends or Profit Distributions
- Generally 0% PR tax on qualifying distributions
- Additional Benefits
- 75% property and generally 50% municipal tax exemptions
Tie the incentive to a qualifying energy business
The green-energy example concerns an approved business and its qualifying income and assets. It is not a blanket 4% rate for every infrastructure project or a homeowner installing solar panels. Evaluate generation activity, equipment, property use and regulatory requirements together. Income, distribution, property and municipal benefits must each be confirmed under the relevant decree.
Act 60 reference: Secs. 2072.01–2072.04.
Agroindustries90% exemption on direct eligible agricultural income; remainder follows ordinary rules
Eligible example: qualifying bona fide producer
- Tax on Qualifying Income
- 90% exemption on direct eligible agricultural income; remainder follows ordinary rules
- Dividends or Profit Distributions
- Ordinary dividend rules; no automatic exemption
- Additional Benefits
- 100% municipal license tax exemption on covered activities; separate agricultural subsidy programs
Distinguish an exemption from a tax rate
A 90% exemption means 10% of qualifying agricultural income remains subject to the otherwise applicable tax rules; it does not mean a 10% flat tax rate. Qualifying agricultural property and covered municipal activity can receive additional exemptions. Certification as a bona fide farmer, the eligible activity and actual use of land and equipment matter. Wage support, bonuses or other agricultural assistance follow separate eligibility and funding rules.
Act 60 reference: Secs. 2082.01–2082.04; Chapter 8.
Creative IndustriesBase production credit up to 40% on qualifying local expenditure, subject to approval and limits
Eligible example: approved film production
- Tax on Qualifying Income
- 4% on qualifying project income
- Dividends or Profit Distributions
- 0% PR tax on qualifying project-profit distributions
- Additional Benefits
- 100% municipal license tax exemption; base production credit up to 40% on qualifying local expenditure; foreign-person payments and additional credits follow separate rules
Budget around certified expenditure
For an eligible film project, the base credit can reach 40% of qualifying local expenditure, subject to certification, available allocations and statutory limits. Payments to foreign persons and any additional credits use separate rules. Qualifying project income and distributions may also receive preferential treatment. Plan documentation, production approvals and the timing of credits before treating an incentive as available cash.
Act 60 reference: Secs. 2092.01–2092.04; 3050.01.
Entrepreneurship0% on the first $500,000 of annual net income for 3 years; excess follows ordinary rules
Eligible example: qualifying young entrepreneur’s new business
- Tax on Qualifying Income
- For 3 years: 0% on the first $500,000 of annual net income; excess follows ordinary rules
- Dividends or Profit Distributions
- Ordinary dividend rules; no automatic exemption
- Additional Benefits
- 100% movable-property and municipal tax exemptions; restrictions on combining incentives
A focused, three-year starting window
A qualifying young entrepreneur’s new business can receive the income exemption on its first $500,000 of annual net taxable income for three years from the approved start of operations. Excess income and shareholder distributions follow ordinary rules. Covered movable property and municipal taxes can be fully exempt. Eligibility and a special agreement are required; combining this program with other incentives is restricted.
Act 60 reference: Sec. 2100.01.
Other Industries · Maritime Cargo0% on qualifying net shipping income
Eligible example: approved maritime cargo operator
- Tax on Qualifying Income
- 0% on qualifying net shipping income
- Dividends or Profit Distributions
- Qualifying domestic recipients may receive 0%; foreign recipients face additional conditions
- Additional Benefits
- 100% exemptions on qualifying operational property and covered municipal taxes
A shipping example, not a universal exemption
Qualifying maritime cargo operations can receive exemption on covered shipping income, operational property and municipal taxes. Distributions depend on recipient status and statutory conditions. The broader chapter includes distinct activities; a port location, shipping-related tenant or logistics investment does not by itself establish the cargo operator’s eligibility.
Act 60 reference: Chapter 11.
Your next move
Let’s discuss what
you’re looking to accomplish.
Share your plans for living, doing business or investing in Puerto Rico. Let’s connect your objectives with the property, location and market considerations that shape your next move.
Discuss Your Puerto Rico PlansTax Information Disclaimer
This content provides general information. Approval requires eligible activity, supporting documentation and government review. Genuine operations, residency where applicable and ongoing compliance are essential.
Purchasing property does not automatically secure a decree, and federal or foreign obligations may remain. Specific decree terms, regulations and later amendments must also be reviewed.
APONTE helps connect property decisions with a coordinated plan; qualified tax and legal professionals determine eligibility and tax treatment.
Reference sources
Puerto Rico Act 60 · OGP ↗DDEC ↗IRS Publication 570 ↗Based on the OGP consolidated Spanish Act 60 text, revised July 16, 2026, including Act 38-2026. Specific decree terms, regulations and later amendments must also be reviewed.