Act 60 Tax Incentives Explained – What You Need to Know

When working with Act 60, Puerto Rico's comprehensive tax incentive program that replaced the old Acts 20 and 22. Also known as Puerto Rico Tax Incentives, it offers reduced income tax rates, 0% capital gains, and generous export‑service benefits. Another crucial piece of the puzzle is the Residency Requirements, which dictate that individuals must become bona‑fide residents of Puerto Rico and spend at least 183 days on the island each year to qualify. In short, Act 60 combines tax breaks with strict domicile rules, creating a powerful draw for entrepreneurs, crypto investors, and service exporters looking for a lower‑tax environment.

Key Elements of Act 60

Investment Tax Credit, the credit that lets eligible businesses offset Puerto Rican taxes with a percentage of qualified investments is at the heart of the program. The credit can cover up to 40% of the investment, which means a company spending $500,000 on qualified equipment could slash its tax bill by $200,000. International Investors, individuals or firms based outside Puerto Rico who relocate or set up a qualified entity often pair this credit with the 0% capital gains rate, turning Puerto Rico into a crypto‑friendly hub. The relationships are clear: Act 60 provides tax incentives → investment tax credit reduces payable tax → international investors reap the savings. Additionally, the program requires ongoing compliance, such as filing annual reports and maintaining the qualified business activities, which ensures the benefits aren’t just a one‑time perk.

If you’re wondering whether Act 60 fits your plan, the posts below will walk you through real‑world examples: a step‑by‑step guide to claiming the SHO airdrop, reviews of exchanges like Hotbit and PancakeSwap that many Act 60 residents use, and deep dives into global regulation trends that affect how you report income back to the IRS. You’ll also find practical advice on setting up a crypto business in UAE free zones, which can complement an Act 60 strategy for those who need a multi‑jurisdictional setup. All these resources share a common thread – they show how the tax advantages of Act 60 can be unlocked while staying compliant and avoiding common pitfalls. Keep reading to discover the actionable steps and insider tips that will help you make the most of Puerto Rico’s tax environment.