Tax

Understanding Act 60 — The Basics Every Newcomer Should Know

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Joel Ortega is a tax advisor and compliance strategist specializing in Puerto Rico’s tax incentive programs and corporate structuring. A graduate of the University of Puerto Rico with a Bachelor’s in Accounting, he previously held roles at top accounting firms before co-founding Imperium Management Group. At Imperium, he leads the firm’s tax strategy and client advisory services, working closely with high-net-worth individuals and businesses navigating Act 60 and other complex financial frameworks.

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Understanding Act 60 — The Basics Every Newcomer Should Know
Understanding Act 60 — The Basics Every Newcomer Should Know

Tax

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Discover how Puerto Rico's Act 60 can help you pay 0% on capital gains and just 4% on business income. Learn eligibility, benefits, and how to get started.

Puerto Rico’s Act 60, formerly known as Acts 20 and 22, has transformed the island into a powerful tax haven for investors and service-based entrepreneurs. If you're considering a move to Puerto Rico or already live here, understanding Act 60 is the first step in unlocking major tax advantages.

What Is Act 60?

Act 60 is a set of tax incentives enacted by the Puerto Rican government to attract individuals and businesses to relocate to the island. It combines several older laws (like Act 20 and Act 22) into a single incentive code that offers:

  • 0% tax on certain capital gains for qualified individuals
  • 4% corporate tax rate for eligible export service businesses
  • Exemptions from Puerto Rico income, dividend, and municipal taxes in some cases

Two Main Programs Under Act 60

Individual Investor Incentive (Formerly Act 22)
  • Who qualifies? Bona fide residents of Puerto Rico who had no Puerto Rico source income before relocating.
  • Main benefit: 100% tax exemption on capital gains realized on assets acquired after moving to PR.
  • Requirements:
    • Must donate at least $10,000 to Puerto Rican charities annually
    • Must purchase residential property within two years
    • Must meet Puerto Rico residency tests

Export Services Incentive (Formerly Act 20)

  • Who qualifies? Businesses providing eligible services from Puerto Rico to clients outside the island.
  • Main benefit: Flat 4% corporate income tax on qualified services
  • Additional perks:
    • 100% exemption on dividends paid from eligible income
    • 75–100% municipal tax exemption depending on the location

Residency Requirements to Qualify

To enjoy these benefits, you must become a bona fide resident of Puerto Rico. This involves:

  1. Presence Test: At least 183 days in Puerto Rico
  2. Tax Home Test: Your main place of business is in Puerto Rico
  3. Closer Connection Test: Demonstrating your social, financial, and residential ties are stronger in Puerto Rico than elsewhere

Why Act 60 Matters

For high-net-worth individuals, investors, and remote business owners, Act 60 offers significant long-term tax savings. Whether you’re exiting crypto positions, selling a business, or running a consultancy firm, relocating to Puerto Rico could save you hundreds of thousands—if not millions—per year.

Next Steps: How to Get Started
  • Assess your current income and investment structure
  • Review the timing of capital gains
  • Create a tax compliance plan
  • Select a strategic location (like Dorado) to maximize municipal tax savings
  • Work with experienced advisors

Ready to Explore Act 60?

At Imperium Management Group, we help clients structure their businesses, relocate with confidence, and stay fully compliant under Puerto Rico’s tax incentive laws.

Book a free consultation to evaluate your eligibility and projected tax savings.