Tax Incentives

Individual Resident Investor

Chapter 2 of Code

Individual Resident Investor

Act 60-2019, the Puerto Rico Incentives Code, groups together most of Puerto Rico's incentives laws into a single uniform code. Chapter 2 of the Code contains the incentives focused on individuals, including the Individual Resident Investor incentive previously offered under Act 22-2012.

This incentive is available to any individual that wasn't a bona fide resident of Puerto Rico between January 17, 2006, and January 17, 2012 (these dates have varied at different times and should be confirmed at the time of application to confirm eligibility) and moves to PR. To become a bona fide resident of Puerto Rico, as defined in Section 937 of the Internal Revenue Code, individuals must comply with the Presence Test, Tax Home Test, and Closer Connection Test. If any of these tests are not met, the individual may not be considered a bona fide resident of PR and may not enjoy the benefits of the incentive.

Eligibility Requirements

What are the requirements?

Applicant wasn't a Puerto Rico Resident between January 17, 2006, and January 17, 2012.

Become and remain a bona fide Puerto Rico resident

Comply with a $10,000 annual donation to not for profit entities that operate in PR and are not controlled by the taxpayer of close relatives.

Buy a residence within the first 2 years of getting the decree.

Tax documents

Benefits

Benefits of the Individual Resident Investor Incentive

Interest and DividendsDerived after becoming resident of PR, from any source, will be 100% exempt in PR. They may be subject to other jurisdictions taxes depending on the source of the income.

Short Term and Long Term Personal Property Capital GainsGains from the sale of any personal property acquired after becoming a resident of PR will be 100% exempt from taxes in PR.

Short Term and Long Term Gains of Personal Property Acquired Before PR ResidencyThe portion of the gain related to the appreciation of securities after reestablishing PR residency will be 100% exempt. The portion of the gain related to the appreciation of securities before establishing PR residency will be sourced to the applicable jurisdiction and may be subject to taxes

What to do next?Contact us at info@mzls.llc