In January of 2012, the Government of Puerto Rico signed into law both Act 20 and Act 22, which provide aggressive tax incentives to urge investors to move to Puerto Rico to do business.  

Act 22

The Individuals Investors Tax Act of 2012 or Act 22 was established to promote the relocation of individual investors to Puerto Rico, in order to attract new residents to the Island by providing a total exemption from Puerto Rico income taxes on all passive income realized or accrued after such individuals become bona fide residents. In the long run, the goal is to attract new local investments in real estate, services, and capital injections to the Puerto Rico banking sector, in order to accelerate the Island’s economy.

Act 22 offers:

  • 0% tax on dividend and interest income for new Puerto Rico residents

  • 0% tax on short-and-long term capital gains for new Puerto Rico residents

  • 0% federal taxes on Puerto Rico source income

  • Incredible tax savings on your investment portfolio returns

  • Term of the tax decree is until 12/31/2035

  • 82°F weather all-year round and 300 miles of paradise beaches




Act 20

The Export Services Act of 2012 or Act 20 was established and intended to promote the exportation of services, by providing the appropriate environment and opportunities to make Puerto Rico a center for international services. In order to do so, the Act is focused on encouraging local service providers to expand their businesses by offering their services to clients located outside the Island. Also, it aims to convince foreign services providers to move their businesses to Puerto Rico.

Act 20 offers:

  • 4% corporate tax rate

  • 100% tax-exempt dividends

  • 60% exemption on municipal taxes

  • 20-year decree guaranteeing these rates, with possible 10-year extension

  • No federal taxes on Puerto Rico source income

The Puerto Rico tax incentives were highlighted in this 2015 feature article in Forbes.  Additional information is also available from the Act 20/22 consulting firm Omnia Economic Solutions.
Act 20 Act 22 Puerto Rico Tax Incentive
Puerto Rico Tax Law 20 22

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