Tax Exemptions under
Act 60
ACT 60 TAX EXEMPTION GRANTS
Reduce your tax burden. Grow from Puerto Rico.
The Puerto Rico Incentives Code (Act 60-2019, referred to as “Act 60”, available in both Spanish and English) consolidates the island’s tax incentives into a single framework. This law enables residents, investors, and businesses to qualify for substantial tax exemptions, especially those providing services to clients outside Puerto Rico.
At Saavedra CPA, we help individuals and businesses navigate the eligibility process, secure their tax exemption grant certificates, and stay compliant with ongoing requirements.
Act 60 for Export Services & Commerce
Benefits for eligible businesses:
- 4% corporate income tax rate
(As low as 1–2% for small or pioneer businesses) - 100% exemption on dividends and profit distributions
- 75% property tax exemption
(100% for first 5 years for small businesses) - 50% municipal tax exemption
(100% for first 5 years for small businesses) - 15-year decree term, renewable for another 15 years
Eligibility Overview:
- Must render services to clients outside Puerto Rico
- Cannot offer services related to Puerto Rico laws, entities, or commercial activities
- Must derive at least 80% of income from qualifying export activities
Examples of eligible services:
- Consulting, accounting, legal, marketing, design, app development
- Investment banking, data processing, blockchain services
- Engineering, architecture, education & e-learning, telemedicine
- Product assembly, licensing, wholesale for export markets
Investing in Qualified Opportunity Zones (QOZ) Under Act 60
Puerto Rico offers designated Qualified Opportunity Zones (QOZs) that align with federal tax incentives and Act 60 benefits. U.S. investors who reinvest eligible capital gains into a Puerto Rico-based QOZ Fund may defer or reduce federal capital gains taxes, while potentially achieving long-term tax-free growth on QOZ investments. For bona fide residents of Puerto Rico under Act 60, this creates a unique opportunity to structure gains from U.S. sources into QOZ assets while maintaining eligibility for local tax exemptions. Proper planning and timely reinvestment are essential to meet federal and Act 60 compliance requirements.
Act 60 for Individual Investors
Key Benefits:
100% exemption on Puerto Rico income tax for:
Dividends
Interest income
Capital gains accrued post-residency
Requirements:
- Relocate to Puerto Rico within 2 years of the decree
- File annual reports with the Department of Economic Development
- Donate $10,000 annually to a qualified nonprofit
Expiration:
Individual investor incentives expire on December 31, 2035.
Other Programs Under Act 60
Act 135 – Young Entrepreneurs
Ages 16–35 may qualify for:
0% income tax on first $500,000 of net income (3 years)
100% property and municipal tax exemption (3 years)
Industry-Specific Incentives
Act 60 also includes exemptions for:
Film & Media
Tourism Projects
Renewable Energy
We also advise on Federal and Puerto Rico Tax Credits available to qualifying industries.
Foreign national investors may also explore the EB-5 Investor Program, which allows qualified individuals to apply for U.S. permanent residency, including in Puerto Rico, through targeted investments and job creation.
Ready To Apply?
Start with a FREE Eligibility Check.
If you already have an Act 60 Tax Exemption Grant, and you need assistance with the annual compliance report filings, then click below: