The information provided in this FAQ section is for general informational purposes only and is not intended to constitute legal, tax, or financial advice. Puerto Rico relocation and Act 60 planning involve complex federal and local laws, regulations, and factual determinations that vary based on each individual’s circumstances.
Reading this content or contacting Stolberg Law through this website does not create an attorney–client relationship. No action should be taken in reliance on this information without first obtaining individualized legal and tax advice from qualified professionals.
Successful relocation and tax incentive planning requires careful, fact-specific analysis, proper structuring, and ongoing compliance.
Yes. Puerto Rico is a U.S. territory, so U.S. citizens may relocate freely without a passport, visa, or immigration process. However, individuals moving for tax purposes must meet specific federal and local requirements to establish bona fide Puerto Rico residency, including compliance with Puerto Rico’s Act 60 tax incentive program.
Act 60, also known as the Puerto Rico Incentives Code, consolidates all tax incentive programs of the Commonwealth of Puerto Rico into a single statute. Key provisions include:
— Individual Investors (Chapter 2): Eligible residents may receive a 100% Puerto Rico income tax exemption on capital gains accrued after becoming a bona fide Puerto Rico resident and receiving an Act 60 decree. Dividends and interest from Puerto Rico sources are also tax free.
— Export Services Businesses (Chapter 3): Qualifying service businesses may benefit from a 4% fixed corporate tax rate on eligible export services income and a 100% tax exemption on dividend distributions from that income provided the service is rendered from Puerto Rico.
To be treated as a bona fide Puerto Rico resident for tax purposes, you must generally satisfy all three IRS tests:
— Tax Home Test: Your principal business and office must be in Puerto Rico.
— Tax Home Test: Your principal business and office must be in Puerto Rico.
— Closer Connection Test: Demonstrate stronger ties to Puerto Rico than any other jurisdiction.
Yes. Once you establish residency, you are generally expected to obtain a Puerto Rico driver’s license promptly, typically within 30 days.
Yes. Vehicles shipped to Puerto Rico are subject to local excise tax, registration, and inspection requirements.
Common steps include securing housing, opening local bank accounts, obtaining a Puerto Rico driver’s license, registering to vote, donating to charity and establishing social connections (clubs, associations, philanthropy, etc.).
It is strongly advisable to use a separate office address rather than a personal residence. Using a dedicated office improves audit defensibility, credibility, privacy, and reduces legal risk, including under Puerto Rico’s doctrine of piercing the corporate veil. Moreover, if you are leasing and you change residence you will have to amend all corporate documents with various government agencies.
Virtual office solutions such as Piloto 151 provide a cost-effective option.
Absolutely. Act 60 planning involves complex legal and tax issues that should be handled by licensed attorneys and certified public accountants with experience in Act 60 matters. Licensed professionals provide legal authority, accountability, confidentiality, audit readiness, and ongoing compliance support that non-licensed advisors cannot. Beware of flashy firms that advertise on social media – many of these are marketing firms that are inexperienced in these issues and not led by attorneys or certified public accountants.
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