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ACT 20/22

New Residents Receive Attractive Tax Incentives- ACT 20/22

Puerto Rico is the only “Free and Associated State” of the United States of America. From a luxury beach property to tiny cottages, this beautiful Caribbean Island offers some unique real estate investment opportunities and is a tax haven for US citizens. The following two laws, Act 20 and Act 22 were passed to encourage high net worth individuals and businesses to invest here and help grow the economy.

Incentives for Individual Investors / Act 22

Provides a total tax exemption from Puerto Rico income taxes on all passive income realized or accrued when the individual investor becomes a bona fide resident of Puerto Rico. Benefits include:

  • 100% tax exemption from Puerto Rico income taxes on all dividends
  • 100% tax exemption from Puerto Rico income taxes on all interest
  • 100% tax exemption on all long and short term capital gains accrued after becoming a new resident of Puerto Rico

Businesses Get Tax Benefits Too /Act 20

This law is designed to establish and develop Puerto Rico as an international export services center. The goal is to encourage local service providers to expand outside Puerto Rico and to promote the development of new business and inbound transfer of foreign goods to the country.

Benefits include:

  • Tax rates as low as 3 and 4 percent
  • 100% exemption on dividends or profit distributions and on property taxes
  • 20-year decree, renewable for an additional 10 years

These are just a few reasons that purchasing a home in Puerto Rico or establishing a new business in San Juan is a smart decision and a wise investment. Our expert Realtors can answer all your questions about investing or buying your new home here. Make the call to our office today at 787-244-1999 or email us. We are here to serve you.