Chapter 3 of ACT 60 marks an important milestone in Puerto Rican legislation, focused on turning Puerto Rico into an attraction point for trade and rendering services globally. This section of the law intends to encourage the export of services from the island, displaying an attractive framework for U.S. companies to consider Puerto Rico their home and a strategic point from which to reach international markets.
Strategies to Encourage Trade and Services Exports
Chapter 3 of Act 60 outlines clear strategies to encourage the relocation and establishment of U.S. businesses in Puerto Rico. These businesses must render services from the island to offshore customers, ensuring that the service rendered is not directly related to commercial activities in Puerto Rico. This distinction is crucial to keep focused on exporting and international trade.
Benefits and Exemptions Under the Tax Exemption Decree
In order to access the benefits of Chapter 3, companies must apply for a tax concession, formalized through a tax exemption decree. This decree, in force for an initial period of 15 years with a renewal option, offers stability and legal certainty to companies before possible legislative amendments in Puerto Rico. Some of the most significant incentives include:
- A reduced tax rate to 4% on income tax.
- Complete exemptions in the tax on the distribution of profits.
- Significant reductions in property taxes for real estate and personal property used in the business.
- Reductions in municipal taxes with a more favorable tax structure for companies established under this regime.
Eligibility Criteria for Incentives
Eligibility to take advantage of these incentives extends to a wide range of service and export trade activities, ranging from research and development to consulting in several areas, such as educational, health, and financial services, among others. The diversity of services covered reflects the breadth of Puerto Rico’s vision to become an attraction for international business.
Conclusion
Chapter 3 of ACT 60 in Puerto Rico represents an unprecedented window of opportunities for companies intended to expand their global reach from a strategic location in the Caribbean. The proposed incentives and tax exemptions attract foreign investment and underscore Puerto Rico’s commitment to fostering the global economy and international trade. This legal framework firmly positions Puerto Rico as a privileged destination for establishing global trade and service centers, thus inviting companies worldwide to join in its vision for the future.