Act 60 (formerly Acts 20 and 22) is a major reason why so many Americans are packing their bags for Puerto Rico. It offers a unique suite of tax incentives aimed at bringing in new residents and encouraging investment on the island. Here's what you need to know.
What Is Act 60?
Act 60 is a set of tax incentives offered by the Puerto Rican government to attract individuals and businesses that can contribute to the local economy. The law is divided into various chapters, but the most relevant for individuals and businesses are:
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Individual Resident Investor (formerly Act 22): Offers 0% tax on Puerto Rico-sourced capital gains.
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Export Services Act (formerly Act 20): Provides a 4% corporate tax rate for companies exporting services from Puerto Rico.
Who Qualifies?
To take advantage of Act 60, you must become a bona fide resident of Puerto Rico. This includes:
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Spending at least 183 days per year in Puerto Rico
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Establishing a primary home on the island
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Not having a tax home or closer connection to the U.S. mainland
Key Benefits
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Individual Tax: 0% tax on long-term capital gains accrued after becoming a resident.
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Corporate Tax: 4% income tax on eligible services exported outside Puerto Rico.
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Property Tax & Municipal Incentives: Additional reductions for qualifying businesses.
How to Apply
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Establish residency under IRS rules.
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Apply through the Puerto Rico DEDC (Department of Economic Development and Commerce).
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Obtain a tax decree, which locks in your benefits until 2035 (subject to compliance).
Common Pitfalls to Avoid
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Failing to meet the residency requirements each year
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Assuming your entire income qualifies without consulting a tax advisor
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Not fulfilling the required annual donations or compliance reports
Need Guidance?
Blackmont Homes partners with relocation attorneys and tax advisors to help you navigate Act 60 efficiently and legally. We’re here to make sure your move is not only profitable—but sustainable.
