Contributory incentives for owning real state and residing in Puerto Rico: A unique opportunity

26 April, 2024

Puerto Rico has become an increasingly attractive destination for U.S. citizens interested in living and working on the island due to its exceptional tax incentives. These not only encourage investment and relocation to Puerto Rico but also promote an environment conducive to economic growth and business development. We will address the legal opportunity for those who intend to optimize their tax burden while enjoying life in this paradise-like destination. 

The Tax Incentives Act of 2019: A Game Changer

On July 1, 2019, Puerto Rico significantly started attracting foreign investment and encouraging the relocation of U.S. citizens by enacting legislation offering attractive tax incentives. This legislation, or “ACT 60,” is specifically for those who decide to become residents of Puerto Rico. Among its most notable provisions, Chapter 2 focuses on Resident Individual Investors, while Chapter 3 focuses on Export Services. These chapters offer important protections for new residents, allowing them to enjoy significant tax benefits as long as they reside on the island for at least half a year. 

Tax Benefits Under ACT 60

The benefits offered under ACT 60 are considerable, especially regarding tax exemptions. The U.S. Internal Revenue Code already provides a generous exemption for income generated in Puerto Rico, exempting them from federal income tax. In addition, under Chapter 2 of ACT 60, residents can enjoy minimal or even null tax rates on interest, dividends, and certain capital gains. In addition, property taxes in Puerto Rico are significantly lower compared to those in the United States, making the island an ideal place to live and a strategic hub for exporting services globally. 

Obtaining Tax Exemption Decrees

In order to take advantage of the ACT 60 benefits, interested parties must file an online application through the Single Business Portal (SBP). Through this process, the Government of Puerto Rico issued a tax exemption decree detailing the specific rates and conditions applicable under ACT 60. This decree works as a contract between the applicant and the Government of Puerto Rico, ensuring the tax benefits for the decree duration, notwithstanding any subsequent changes in the Puerto Rican tax legislation. The decrees for Export Services are granted for an initial period of 15 years, extendible for another 15 years, while the decrees for Resident Individual Investors apply until December 31, 2035.  


The tax incentives available to residents and investors in Puerto Rico represent a remarkable opportunity for those intending to optimize their tax obligations while enjoying the quality of life in a tropical destination. ACT 60, particularly, has established a legal framework benefiting individuals and families intended to relocate to the island and promotes economic growth and business development in Puerto Rico. With guaranteed benefits for extended periods and a clear intention to attract talent and capital to the territory, Puerto Rico stands out as a privileged place to live, work, and prosper.