Expanding into global markets can be a game-changer for service-based businesses, but doing so efficiently requires the right tax strategy. Act 60 Export Services in Puerto Rico offers a unique incentive: a 4% corporate tax rate for companies that export eligible services from the island. This program helps entrepreneurs and established firms alike reduce their tax burden while positioning themselves competitively on the international stage.
Whether you’re in finance, consulting, IT, or any qualifying service sector, Act 60 Export Services can significantly lower your operating costs and increase profitability. At Tax Law and Venture Services, we help U.S. companies and Puerto Rican entrepreneurs leverage these benefits while staying fully compliant with local and federal regulations.
How Act 60 Export Services Can Help You Scale Globally and Strategically
Whether you’re launching a new firm or relocating an established business, understanding how these incentives work, and how to comply is crucial. Below, we break down the most impactful benefits of Act 60 Export Services and explain how they can be harnessed to grow your business globally.
1. 4% Corporate Tax Rate for Export Services
At the heart of Act 60 is a powerful incentive: a reduced 4% corporate tax rate for businesses exporting eligible services from Puerto Rico to clients outside the island. This is especially valuable when compared to the 21% federal corporate tax rate in the U.S.[1]
For example, a digital marketing agency or a legal consulting firm serving U.S. or European clients from Puerto Rico could qualify. This allows companies to reinvest more capital into talent, infrastructure, and innovation without sacrificing compliance or financial health.
2. 100% Tax Exemption on Dividends and Distributions
Under Act 60 Export Services, businesses can distribute profits to owners and shareholders completely tax-free at the Puerto Rico level. This is a major financial advantage for entrepreneurs, as it helps reduce double taxation and improves long-term wealth retention.
This benefit is especially appealing for small and mid-size companies that need to maintain liquidity while scaling globally. With fewer tax obligations on dividends, you’re better equipped to reinvest earnings into international expansion, technology upgrades, or even personal savings.
3. Access to Global Markets Without the U.S. Federal Tax Burden
Operating under Act 60 Export Services gives you access to the U.S. banking and legal infrastructure while significantly reducing your federal tax liability. Since Puerto Rico is a U.S. territory, your business benefits from the stability of U.S. jurisdiction without incurring U.S. federal corporate taxes on Puerto Rico source income.[2]
This means you can serve clients worldwide, whether in the U.S., Europe, or Asia, while taking advantage of Puerto Rico’s pro-business tax regime. For entrepreneurs with a global mindset, this presents an ideal base of operations.
4. Incentives to Hire Puerto Rican Talent
To maintain eligibility for Act 60 Export Services, businesses must create economic activity on the island. One way to do this is by hiring local talent. Companies earning over $3 million in annual revenue must employ at least one Puerto Rico-based individual in a core operational role.
This not only strengthens your compliance standing but also helps integrate your business into the local economy. At Tax Law and Venture Services, we guide our clients in building a compliant, scalable workforce model that aligns with Act 60 requirements and long-term goals.
5. Reduced Operating Costs and Property Tax Relief
Another advantage of relocating your export service business to Puerto Rico includes up to a 75% exemption on real and personal property taxes and a 50% exemption on municipal taxes.[3]
Office space, utilities, and labor costs in Puerto Rico also tend to be more affordable than in major U.S. cities. This makes it easier to establish operations, hire skilled professionals, and allocate funds toward innovation rather than overhead.
6. Ideal for Digital and Remote-First Companies
If your business operates in the cloud, offering digital, consulting, legal, financial, or design services, you’re a prime candidate for Act 60 Export Services. These types of businesses can function seamlessly from Puerto Rico while exporting services to clients worldwide.
With high-speed internet, bilingual professionals, and access to U.S. legal systems, Puerto Rico is increasingly popular among remote-first companies looking to optimize costs and boost margins. At Tax Law and Venture Services, we specialize in helping founders set up operations with minimal disruption while maximizing tax incentives.
7. Personalized Compliance and Audit Support
Compliance is a non-negotiable under Act 60 Export Services. To maintain your tax benefits, you’ll need to file annual reports, undergo audits, and keep your operations within the law. Failure to comply can result in revoked tax decrees or financial penalties.
Our team at Tax Law and Venture Services, led by founder Roxana, works closely with business owners to ensure all legal documentation, filings, and employment requirements are met. We act as your long-term partner in maintaining compliance and optimizing your incentive usage.
8. Support for Puerto Ricans Returning to the Island
Act 60 Export Services isn’t only for new arrivals from the mainland U.S. It’s also an opportunity for Puerto Ricans who’ve moved away to return and rebuild their lives and businesses on the island. This helps bring both capital and human resources back into Puerto Rico’s economy.[4]
Whether you’re a Puerto Rican entrepreneur returning to invest in your home island or a local service provider expanding your reach, the law creates favorable conditions to support your success both financially and professionally.
9. Flexible Business Structures Allowed
Whether you’re an LLC, C-corp, or another entity type, you can structure your business under Act 60 Export Services to meet both your operational and financial needs. Choosing the right entity type will impact how you report income, pay yourself, and distribute dividends.
We at Tax Law and Venture Services offer customized consulting to help you determine the most strategic structure for your goals. This ensures you’re not only compliant with Act 60, but also leveraging every available tax advantage.
10. Long-Term Tax Certainty with a 15-Year Decree
Once approved under Act 60, your business receives a 15-year tax decree from the Puerto Rican government. This provides long-term certainty and protection from future legislative changes that might otherwise affect your tax planning.
In a world of ever-shifting tax laws, having a 15-year guarantee offers stability that’s rare. This is especially valuable for entrepreneurs planning to invest in infrastructure, grow headcount, or expand into new markets.
Conclusion
Act 60 Export Services is more than a tax incentive, it’s a strategic gateway for businesses aiming to thrive in the global marketplace. With benefits like a 4% corporate tax rate, exemption on dividends, and reduced operating costs, it creates an environment where innovation, scalability, and profitability can flourish, all while remaining connected to the U.S. legal and financial systems.
If you’re ready to elevate your business and tap into the power of Puerto Rico’s tax advantages, our team at Tax Law and Venture Services is here to help. Schedule a consultation with us today and let’s explore how we can guide your transition, ensure full compliance, and build a tax-efficient structure tailored to your goals.
FAQs
1. Who qualifies for Act 60 Export Services in Puerto Rico?
Businesses that export services outside Puerto Rico and maintain a physical presence on the island can qualify.
2. What is the corporate tax rate under Act 60?
Eligible businesses benefit from a reduced 4% corporate tax rate on qualifying net income.
3. Can Puerto Ricans returning to the island benefit from Act 60 Export Services?
Yes, returning Puerto Ricans who meet the requirements can also apply and benefit from the incentives.