Puerto Rico is among the few places that offer lucrative values of return on investment (ROI). Puerto Rico Tax Incentives provide an optimal environment for business to thrive. This good business climate is attributed to the tax incentives it provides to businesses and high-profile individuals. Ideally, the sole objective of advancing these incentives was to improve the economy of this nation and to improve the profitability of companies established on this island.
Initially, this nation was not as it is today.Puerto Rico’s tax incentives are covered in the economics Acts (20 & 22). After three years of conscious financial decisions, the economy of this country has steadily improved. Initially, the sole objective of these two act of parliament was to lure American investors and successful Puerto Ricans abroad into the island. As much as the economy is not good, as most people would expect, the government is trying to build on the momentum it has gained since these acts were implemented.
Act 20 $ 22 Explained
These statutes cover distinct areas. Article 20, also referred to as the export services law focuses on offering incentives to high profile business executives. It also attracts financial managers to relocate to this island and export their services. This bill achieves its objective by charging a corporate tax bracket to these individuals at 4%. Moreover, it also allows them to export their services without taxing the proceeds from these transactions.
Act 22, is referred to as the individual investors act. This law was designed to attract high profile investors to this nation. The advantage of this move was that it would improve Puerto Rico’s net worth. Thus, Puerto Rico provides them with tax exemptions of return on profits and capital gain. The investor is expected to reside in this island for a minimum of 183 days (half a year) annually to qualify for this benefits
Puerto Rico has been part of the US since 1989 and individuals born in this ideally are naturalized Americans. However, since this island does not qualify to be a state, federal taxes do not apply here. In this regard, businesses in this nation are exempted from federal taxes. With these investments acts, businesspersons, and companies moving into this island can reduce their tax bills drastically. In 2013, 151 foreigners received exemption status.
Moreover, strategic investors have been quick to capitalize on these laws with close to 250 high profile investors moving into this nation in 2014. With this trend, economic experts project that the net value of investments injected into this country will be close to 10 billion US dollars