economic Incentives for Manufacturing

Puerto Rico offers precision, experience and the right conditions for efficient production processes. With many of the top life science companies in the world operating in Puerto Rico, it’s easy to understand why the island is a major international manufacturing hub. To bolster its manufacturing sector, the Government of Puerto Rico has created an aggressive tax incentives program with the purpose of helping operations on the Island become more profitable for companies who manufacture here.

Economic Incentives for the Manufacturing Sector (Act 73-2008)

• 4% income tax on industrial development income
• 0% to 1% tax rate on income for Pioneer or novel products manufactured in Puerto Rico
• Up to 50% tax credit on purchases of products manufactured or recycled locally
• Up to 50% tax credit on Research and Development (R&D) activities
• Up to $5,000 for each job created during a business' 1st year of operation
• Special deductions on investments from structures, machinery, and equipment

Contact us to coordinate a free consultation and learn more about these incentives.

Other Benefits

• 25% tax credit for the purchase of products manufactured in Puerto Rico
• 50% credit for investments in machinery and equipment for the generation with renewable resources and the efficient use of energy
• 50% tax credit for investments in research and development, clinical trials, toxicology tests, infrastructure, renewable energy, and intangible property
• 50% of the investment in made in the acquisition of equity interests or of the operational assets of an exempted business that is in the process of closing operations in Puerto Rico, to continue operating it, up to $8,000,000

Marketing Incentives Program
This matching fund is available to pre-qualified companies whose sales are greater than $100,000 per year and whose commencement of operations has been certified. Through this incentive, the PR Industrial Company provides a 50% reimbursement, up to $50,000, of the costs of marketing activities in markets outside of Puerto Rico. The company must submit the application to the PR Industrial Company for evaluation at least 60 days before the promotional campaign or marketing activity will be carried out.

Incentives for Machinery, Equipment, Specialized Systems and Maritime Transportation
To support expansion projects, or to assist companies to achieve operational improvements through new technology, the PR Industrial Company offers incentives to contribute a portion of the investment. Incentives will be given to eligible businesses that have the interest to develop new projects requiring the purchase and installation of machinery and equipment. The company will reimburse 50% of the cost of machinery and equipment, up to a maximum of $50,000. The eligible company's commitment will be to keep operating for a minimum of three (3) consecutive years as well as comply with all the requirements of the incentives contract.

Incentives will be granted to eligible businesses that have the interest to develop new projects requiring the purchase and installation of specialized systems (software). The qualifying company will use the given incentive with the objective of improving the efficiency and productivity of the business. The specialized systems (software) shall be implemented by local technology companies.

The PR Industrial Company will reimburse 50% of the cost of the machinery and equipment up to a maximum of $10,000. The eligible company's commitment is to keep operating for a minimum of three (3) consecutive years as well as to comply with all the requirements of the incentives contract.

To incentivize the distribution of products and services to foreign markets and the U.S. mainland, the PR Industrial Company offers up to 20% of the transportation costs of each container shipped from Puerto Rico to one of three principal ports (Panamá, Santo Domingo, Jacksonville) up to $2,000.

Incentives for Infrastructural Development and Industrial Building Improvements
The PR Industrial Company offers financial assistance, paid on a reimbursement basis, to assist companies with infrastructural and capital improvements to the facilities leased to the PR Industrial Company. Eligible investments include electrical substations, power generators, fire control systems, among others. If the company operates in a privately owned building, the same financial assistance will apply, however, to certain limitations and other terms and conditions.

The company will receive an orientation and must submit certain information for evaluation by the PR Industrial Company, including project drawings, specifications, cost estimates, agency approvals, and any other documents required for the installation or construction of the improvements. The application for this incentive must be prepared and certified by a Licensed Engineer or Architect.

Puerto Rico also offers other complementary incentives for Services, Tourism, Financial Services, Film, among other sectors. Every tax incentive granted constitutes a contract with the government of Puerto Rico that is legally guaranteed and protected by United States law, thus providing a favorable environment to forge alliances and drive investment.

Contact us to coordinate a free consultation and learn more about these incentives.