Expanding your business internationally comes with challenges, but Act 60 Export Services makes it easier for companies to thrive while enjoying significant tax savings. Puerto Rico’s unique tax incentives offer a 4% corporate tax rate making it an attractive hub for service-based businesses catering to global clients. By relocating operations to Puerto Rico, companies can lower costs while maintaining a competitive edge in international markets.
Whether you run a consulting firm, an IT company, or a financial services business, Act 60 Export Services provides a pathway to growth with reduced tax burdens. This incentive program is designed to attract new businesses that generate revenue from outside Puerto Rico, allowing them to scale efficiently while benefiting from a business-friendly tax environment.
How Act 60 Export Services Helps Businesses Expand Globally
Puerto Rico’s Act 60 Export Services is a game-changer for new businesses looking to expand internationally while optimizing tax efficiency. By offering generous tax incentives, the program attracts companies in industries such as consulting, finance, marketing, and technology, enabling them to operate from Puerto Rico while serving clients worldwide. The goal is simple: to create a thriving business ecosystem that benefits both entrepreneurs and the island’s economy.
For companies considering a move to Puerto Rico, understanding the key advantages, eligibility requirements, and long-term benefits of Act 60 Export Services is crucial. Below, we explore how this incentive program can support new business growth and provide financial advantages to international service providers.
Key Tax Benefits of Act 60 Export Services
Act 60 Export Services offers an unparalleled tax structure that helps new businesses reduce costs and increase profitability while operating in a U.S. jurisdiction. The following are some of the most significant tax benefits under this program:
- 4% Corporate Tax Rate
One of the most attractive incentives under Act 60 Export Services is the reduced corporate tax rate of 4% for eligible businesses. Compared to the standard U.S. corporate tax rate of 21% or higher, this provides a substantial advantage for businesses that want to maximize their earnings.[1]
This lower tax rate allows companies to reinvest more capital into expansion, innovation, and workforce development. Whether you run a financial services firm, a digital marketing agency, or a tech startup, cutting your tax burden significantly enhances your competitive edge in global markets.
- 100% Tax Exemption on Dividends and Profit Distributions
Another major benefit of Act 60 Export Services is the complete tax exemption on dividends and profit distributions. New business owners and shareholders can take earnings from their companies without paying additional taxes, making it a highly efficient way to structure finances.
This is particularly beneficial for new high-income entrepreneurs and new investors looking to optimize their earnings while maintaining full compliance with Puerto Rico’s tax laws. Instead of facing double taxation as in other jurisdictions, business owners can retain more of their hard-earned profits.
- Municipal and Property Tax Exemptions
New businesses that operate under Act 60 Export Services also enjoy significant property tax and municipal tax exemptions:
- 75% exemption on property taxes for eligible businesses
- 50% exemption on municipal taxes, reducing overhead costs
- Additional incentives may be available depending on location and industry[2]
These exemptions make Puerto Rico an attractive destination for companies looking to establish operations with lower operational costs while benefiting from a U.S. legal framework.
Eligibility Requirements for Act 60 Export Services
Not every business qualifies for Act 60 Export Services, as the law is designed to attract new export service companies that generate revenue from outside Puerto Rico. Here’s what companies need to know before applying:
- Business Operations Must Be Focused on Export Services
To qualify, a business must provide services to clients outside of Puerto Rico. This means that the company cannot have significant ties to Puerto Rican customers or generate revenue from the local market.
Eligible industries include:
- Consulting and advisory firms
- Software development and IT services
- Financial services, including hedge funds and investment firms
- Engineering, design, and architectural services
- Marketing, advertising, and public relations agencies
If a business serves both local and international clients, it must ensure that 100% of the income benefiting from the Act 60 incentives comes from foreign customers.
- Physical Presence in Puerto Rico Is Required
Companies must establish a physical presence in Puerto Rico, meaning they must:
- Have an office or operational space within the island
- Hire at least one full-time Puerto Rico resident if annual revenue exceeds $3 million
- Comply with local employment and labor laws
This requirement ensures that businesses benefiting from the tax incentives contribute to Puerto Rico’s economy and workforce development.[3]
- Annual Compliance and Audits
To maintain eligibility, businesses under Act 60 Export Services must undergo regular audits and compliance checks. The Office of Industrial Tax Exemption (OITE) conducts reviews at least once every two years to ensure companies:
- Continue serving foreign clients exclusively
- Maintain an active operational presence in Puerto Rico
- Meet the hiring and compensation requirements
Failure to comply with these regulations may result in penalties or revocation of tax benefits. That’s why working with Roxana Tax Law Ventures can help businesses navigate compliance effortlessly and maximize their benefits.
Long-Term Advantages of Relocating Your Business to Puerto Rico
Beyond tax savings, establishing a business under Act 60 Export Services offers several long-term strategic advantages. Companies that relocate to Puerto Rico can experience benefits that go beyond financial incentives.
- Access to the U.S. Market with International Tax Benefits
Puerto Rico provides the best of both worlds—a U.S. territory that follows federal regulations while offering unique tax advantages for international businesses. This structure allows companies to:
- Operate under U.S. laws and regulations, reducing legal risks
- Access the U.S. financial system with ease
- Benefit from lower corporate taxes compared to mainland U.S. companies
This makes Puerto Rico an ideal location for businesses that want to legally minimize taxes while maintaining global credibility.
- Lower Cost of Living and Business Operations
The cost of living and business expenses in Puerto Rico are significantly lower than in many major U.S. cities. From office space and salaries to utilities and operational costs, businesses can operate more efficiently without sacrificing quality.
Additionally, Puerto Rico boasts world-class infrastructure, including:
- High-speed internet and tech-friendly business environment
- Modern airports with direct flights to major U.S. and international cities
- A skilled, bilingual workforce proficient in English and Spanish
This creates a cost-effective yet high-quality business environment that supports international expansion and scalability.
- Attracting Top Talent and Investment
By taking advantage of Act 60 Export Services, businesses can position themselves as attractive destinations for top talent and investors. With a business-friendly tax structure, lower costs, and access to global markets, companies can recruit top professionals and scale rapidly.
Moreover, foreign investors and entrepreneurs increasingly see Puerto Rico as a tax-efficient jurisdiction for wealth management, creating opportunities for:
- Joint ventures with international investors
- Partnerships with U.S.-based companies looking to expand globally
- Access to Puerto Rico’s growing financial and tech sectors
How Tax Law and Venture Services Can Help
Navigating Puerto Rico’s tax incentive programs can be complex, but Roxana Tax Law and Venture Services specializes in helping businesses apply for, comply with, and maximize their benefits under Act 60 Export Services. Our team provides:
- Expert legal guidance to ensure full compliance with tax laws
- Application assistance for obtaining tax incentives
- Strategic tax planning to maximize financial advantages
With years of experience assisting businesses relocating to Puerto Rico, we help clients seamlessly transition and take full advantage of the tax benefits available.[4]
Final Thoughts
For companies looking to expand internationally while reducing tax liabilities, Act 60 Export Services offers a unique opportunity to establish operations in Puerto Rico with unmatched tax benefits. From lower corporate taxes to full dividend exemptions, this program enables businesses to scale globally while maintaining financial efficiency.
By partnering with Tax Law and Venture Services, businesses can ensure a smooth transition, full compliance, and maximized savings under Act 60 Export Services. If you’re considering relocating your business to Puerto Rico, now is the time to explore how this powerful incentive can help your company thrive internationally. Contact us for more details. Schedule a 1-hour consultation today and get expert advice on making the most of Act 60.
FAQs
1. Can any business qualify for Act 60 Export Services?
No, only businesses that provide services to clients outside of Puerto Rico qualify. They must also maintain a physical presence on the island.
2. How long do Act 60 tax benefits last?
The tax incentives are granted for 15 years, with the possibility of renewal for an additional 15 years if compliance is maintained.
3. Do I need to live in Puerto Rico to benefit from Act 60 Export Services?
No, but the business must have a local office and meet employment requirements. Owners may benefit more by becoming new Puerto Rico residents.