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Puerto Rico Act 20: Everything You Need to Know

One of the most important decisions you will make as an entrepreneur is where to locate your business. If you are looking for a tax-friendly destination with plenty of opportunities, look no further than Puerto Rico! In this post, we will discuss Act 20 of the Puerto Rico Tax Reform Code – what it is, who should know about it, and how it can benefit your business. Hence you should read till the end surely you will find useful content.

So what is Act 20? Simply put, it is a tax incentive program designed to attract businesses to Puerto Rico. Businesses that relocate to Puerto Rico and meet certain requirements can qualify for a reduced rate of four percent on most business income. This is a significant saving compared to the standard corporate tax rate in the United States, which can be as high as 35 percent!

Important tips you should know

Who should know about this opportunity? Any business owner or entrepreneur who is considering relocating their business – or even starting a new business – should definitely research Act 20. If your business qualifies, the tax benefits can be substantial. Even if you do not end up relocating to Puerto Rico, it is important to be aware of the opportunities that are available in other jurisdictions.

So what are the requirements to qualify for Act 20? First, your business must be engaged in “export services.” This includes a wide range of activities, such as research and development, management consulting, financial services, and more. Basically, if your business provides services that are performed outside of Puerto Rico, you may be eligible. Additionally, your business must create at least two new jobs in Puerto Rico – although we think you’ll find that this is easy to do once you’re established on the island!

So how can you benefit from Act 20? If you are thinking of relocating your business to Puerto Rico, the first step is to research whether your business qualifies for the incentive.

Once you have determined that your business does qualify, there are a few important next steps:

  1. First, you will need to register your business with the Puerto Rico Department of State. This is a simple process that can be done online.
  2. Next, you will need to obtain a Certificate of Presence from the Puerto Rico Industrial Development Company (PRIDCO). This certificate is required in order to apply for the tax incentive.
  3. Finally, once you have received your Certificate of Presence, you can apply for the tax incentive by filing Form 480.20 with the Puerto Rico Department of Treasury.

If you are approved for the tax incentive, you will be able to enjoy a reduced rate of four percent on most business income. This can provide substantial savings for your business, and it is an opportunity that you shouldn’t miss!

Puerto Rico offers many attractive benefits for businesses, including a friendly tax environment. If you are considering relocating your business – or even starting a new business – be sure to research whether Act 20 may apply to you.

Conclusion:

The Puerto Rico Act 20 is an excellent opportunity for businesses to set up shop in the US territory and take advantage of tax breaks and other incentives. If you are interested in learning more about how to establish a business in Puerto Rico, or want help sorting through all the information available on the Act 20, contact a professional company. A team of experts can assist you with every step of the process, from choosing the right location for your new business to filing all the necessary paperwork. With the help, you could be on your way to doing business in sunny Puerto Rico!