Moving to Puerto Rico to benefit from Act 60, Puerto Rico is a smart legal and financial decision, especially for investors, entrepreneurs, and high-net-worth individuals. With incentives like a 4% corporate tax rate, full exemption on dividends and capital gains, and property tax breaks, Act 60 remains one of the most attractive programs in U.S. territories.

However, the application process can feel complex and intimidating. From establishing bona fide residency to preparing required forms, every step matters. In this comprehensive guide, we’ll walk you through the Act 60 Puerto Rico application process, so you can structure your move with confidence and compliance.

Step 1 – Understand Eligibility and Incentives

To qualify for Act 60 Puerto Rico, applicants must meet specific criteria under Puerto Rico’s Incentives Code. Know what qualifies, and what doesn’t, before you begin.

Who Qualifies for Act 60?

Eligible individuals include U.S. citizens and lawful residents who become bona fide residents of Puerto Rico by meeting residency, tax home, and closer connection requirements. On the business side, entrepreneurs and professionals can opt-in by setting up eligible entities such as Act 60 Export Services companies.

Incentives You Can Claim

Act 60 Puerto Rico offers a 4% corporate tax rate for qualifying export services, 100% exemptions on dividends and capital gains, and municipal and property tax savings. Understanding which incentives align with your goals is key to moving forward strategically.

Step 2 – Establish Bona Fide Residency

The cornerstones of Act 60 Puerto Rico benefits are the bona fide residency and the income sourcing rules; understanding their requirements keeps your application valid and audit-ready. The following are the bona fide residency rules in a nutshell:

Physical Presence Test

You must spend at least 183 days in Puerto Rico each year. Days can be non-contiguous, but record-keeping is essential. Travel in and out of the island must be documented with boarding passes, itineraries, or passport stamps, among other evidence.

Tax Home Requirement

Your primary economic activities must take place in Puerto Rico. Relocate your bank accounts, professional practice, or business operations so that Puerto Rico is clearly your tax base, not the U.S. mainland or elsewhere.

Closer Connection Rule

Several personal indicators are required: move personal belongings, register to vote, obtain a Puerto Rico driver’s license, join local organizations, and show that your family and social life are centred on the island. This proves your intent to make Puerto Rico your permanent base.

Step 3 – Secure a Tax Decree

Once you’ve laid the residency foundation, the next essential step is obtaining a tax decree from Puerto Rico’s Office of Incentives for Strategic Projects (OIPI).

Choose Your Incentive Category

Select the right Act 60 program: Export Services, Individual Investor, or Manufacturing, among others. Each category has specific requirements and benefits, so review carefully or consult with Tax Law and Venture Services for advice.

Submit Your Application

Your deadline starts when you file Form 480.20 (Business or Individual Application). Documents typically include identity proof (SSN Card and passport), lease or title to your Puerto Rico residence, bank statements, criminal record from a governmental office, and business plans for corporate applicants.

Pay Processing Fee

Each tax decree comes with a non-refundable fee; costs vary depending on your category. Budget for this in advance.

Draft and Sign the Decree

Review the terms carefully; these legal documents outline your exemptions, grant period, job creation targets (if applicable), and compliance obligations.

Step 4 – Rearrange Your Financial & Corporate Structure

Once your decree is signed, take actionable steps to align your assets, income, and operations with your new status. Do not rely on ChatGPT for planning to move to Puerto Rico; there is a lot at stake. Consult a professional with experience in Act 60 and U.S. sourcing rules. 

Personal Moves

Open Puerto Rican bank and investment accounts. Sell or lease your U.S. property. Update legal documents like wills and trusts under Puerto Rico law. Begin using your Puerto Rico driver’s license and declare residency on all forms.

Business Reorganization

If you’re applying under a business category such as Export Services, form a Puerto Rico entity (LLC, Corp) and relocate operations. Ensure your employees are based on the island and in compliance with local payroll, service withholding, and licensing laws.

Step 5 – File Annual Compliance & Reporting

Your work isn’t done once the decree is finalized. Maintaining it requires ongoing diligence.

File Form an Exempt Annual Report with the Incentives Office

Every year, you’ll file a compliance report detailing residency status, income earned, local employment, and more. Missing the deadline can lead to penalties or revocation.

Meet Payroll and Employment Requirements

Many decrees require job creation, typically one or more full-time Puerto Rico-based employees. Keep HR records, payroll filings, and tax payments consistent and up to date. Regardless of the employment requirements, you should have a W-2 or be an employee or an independent contractor working in Puerto Rico.

Financial Transparency

Hire an in-house or local accountant or CPA for thorough bookkeeping and accounting matters. Maintain records, work with a qualified CPA, and retain documentation for potential audits by Puerto Rico or U.S. authorities.

Step 6 – Anticipate Common Pitfalls

Prevent issues before they derail your plan by knowing where other applicants often go wrong.

Inaccurate Time Tracking

Without clear documentation of travel, residency claims can be dismissed. Keep logs, boarding passes, and utility bills.

Overstated Source of Income

Polling errors happen when U.S.-sourced income is treated as Puerto Rico-source. Make sure your service delivery model align with your decree.

Ignoring Estate Planning

Puerto Rico operates under forced heirship laws. Failing to revise your will in accordance with local statutes can nullify your estate strategy.

Conclusion

Navigating Act 60 Puerto Rico in 2025 needs strategic planning, accurate legal structuring, and continual compliance. From residency qualification and tax decree applications to corporate reorganization and ongoing reporting, each step matters.

With expert help from Tax Law and Venture Services, you can confidently structure smarter and protect your tax-optimized move. Our experienced team ensures that each part of the process, from filing your Act 60 Application to maintaining your decree, is executed correctly and efficiently. Schedule a consultation today to begin your Act 60 journey.

FAQs

1. How long does it take to get an Act 60 decree?

It typically takes six to twelve months, from initial application to signing the decree, depending on category and documentation.

2. Can I lose my Act 60 benefits after getting the decree?

Yes. Failure to meet residency, employment, or filing requirements may result in penalties or cancellation of benefits.

3. Can I still invest in U.S. securities while under Act 60 of Puerto Rico?

Yes, but treat U.S.-sourced income accordingly; it may still be subject to U.S. federal tax unless legally restructured.