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    • OTHER Competitive Incentives

      Learn more about other Incentives for Emerging Companies, Tourism, and Research & Development.

    • EMERGING COMPANIES

      Incentives for Young Entrepreneurs (Act 135-2014)

      • 0% fixed income tax rate up to $500,000 in gross income
      • 100% tax exemption on personal and real property taxes
      • 100% tax exemption on municipal license taxes
      • 3-year tax decree

      This Incentive is available for entrepreneurs between the ages of 16 and 35 years old.

       

      Learn More.

       

      Incentives for New Small & Medium Enterprises (Act 120-2014)

      • 5% fixed income tax rate for 1st year, 2nd year: 10%, and 3rd year: 15%
      • 50% reimbursement of the federal minimum salary ($3.63 per hour) up to 15 employees for 12 months.
      • 50% tax exemption on personal and real property taxes, municipal license taxes and policy costs with the State Insurance Fund Corporation
      • 3-year tax decree

      Learn more about other benefits and requirements for Existing SMEs and SMEs with Net Operating Losses.

    • Tourism Development

      Incentives for Tourism Development (Act 74-2012)

      • Tax credit equal to 10% of the total project costs, or 50% of the cash investment made by investors (whichever is less)
      • 100% exemption on excise taxes and other municipal taxes for new projects or 90% exemption if it is an existing project
      • 100% exemption on municipal construction excise taxes
      • 100% exemption on sales and use taxes
      • 90% exemption on income tax or 100% exemption if the project is located in the island municipalities of Vieques or Culebra
      • Up to 90% exemption on personal and real property municipal taxes

      Puerto Rico provides incentives for the development of world-class tourism activities. The benefits under this law will remain valid for 10 years from the starting date of the eligible tourism-related project, and the business operation will be entitled to a 10-year extension.

       

      Eligible businesses include hotels, condo-hotels, small inns (paradores), guest houses, timeshares, vacation clubs, theme parks, golf courses operated by or associated with a hotel that is an exempt business, tourism marinas and docking facilities for tourists. The operation of casinos is excluded. Natural resources that are useful as a source of active or passive entertainment or amusement. Other facilities or activities that, due to the special attractive features deriving from their usefulness as a source of active or passive entertainment or amusement, constitute a stimulus to domestic or foreign tourists.

       

      Also, Act 101-1985 provides up to 11% energy credit, if the tourism activity is endorsed by the PR Tourism Company and complies with the requirements stated in this form.

       

      Learn More.

       

    • Research & Development

      Incentives for Scientific Investigators and Researchers (Act 101-2008)

      • Eligible researchers and scientists residing in Puerto Rico can receive a tax exemption of up to $195,000 on income generated from qualified federal research grants or up to $250,000 if the research is conducted within the Science District
      • 50% tax credit for eligible investments in research and development, clinical trials, toxicology testing, and any other qualified intangible property, under Act 73-2008
      • 4% fixed income tax rate for Scientific or Industrial R&D laboratories, under Act 73-2008
      • 0 to 1% fixed income tax rate for “Pioneer” Activities, under Act 73-2008 

      Act 101 is a unique tax incentive to foster research and development activities conducted at local universities in Puerto Rico, allowing qualified Principal Investigators or a Co-Principal Investigator to seek tax exemptions for salaries earned from eligible R&D research grants. The main objective of this incentive is to attract and retain competitive researchers to strengthen Puerto Rico’s performance in science and technology and boost the Island’s position in the knowledge economy.

       

      The grant must be awarded for the conduct of research, defined as creative work undertaken on a systematic basis and designed to increase the stock of knowledge in a particular science field. Through a contractual agreement between the Company, the Academic Institution and the granting agency (including federal, state or private entities that promote competitive scientific investigation) for the completion of specific research goals. Also, it is available for projects obtained competitively through programs that are open (unrestricted) to the general scientific community and that are subject to the same evaluation scrutiny as, for example, NIH’s R01 grant mechanism.

       

      Learn More.

       

    • Puerto Rico also offers other complementary incentives. 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.

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