The Act 60 Investor Playbook

1. What is Act 60?

Act 60, signed into law in 2019, is Puerto Rico's consolidated tax incentive code. It rolled the previous Acts 20, 22, and several others into a single statute. For investors, the two relevant decrees are:

• Individual Investor decree (formerly Act 22): 0% PR tax on PR-sourced capital gains, dividends, and interest, for bona fide PR residents who weren't PR residents at any point in the prior 10 years.
• Export Services decree (formerly Act 20): 4% corporate income tax on services exported from PR to clients outside PR, with a personal salary distribution exempt from PR tax above a reasonable threshold.

These aren't tax loopholes. They're explicit, statutory incentives that Puerto Rico uses to attract mainland investment and high-income earners. The IRS recognizes them, and Section 933 of the US tax code carves out PR-sourced income for bona fide PR residents.

2. Who qualifies

The Individual Investor decree requires:

• U.S. citizenship (or eligible non-citizen)
• You were not a PR resident at any point during the 10 years prior to your application
• You become a bona fide PR resident (defined below)
• You buy a primary residence in PR within 2 years of your decree being granted
• You make a $10,000 annual donation to a PR-based nonprofit (combined with the annual filing fee of $5,000)

The Export Services decree requires:

• Incorporating a Puerto Rico LLC or corporation
• Performing services FROM Puerto Rico for clients OUTSIDE Puerto Rico
• Hiring local PR employees (usually 1+ within 6 months)
• Maintaining a physical office in PR (can be modest)

Bona fide PR residency generally requires:

• Presence test: 183+ days physically in PR during the tax year (cleanest standard)
• Tax home test: Your tax home is in PR (where you regularly work)
• Closer connection test: Closer ties to PR than to the mainland (PR driver's license, PR voter registration, primary residence in PR, etc.)

3. Real tax savings examples

4. The application process

1. Engage a PR tax attorney who has filed Act 60 decrees before. Don't use a mainland attorney for this.
2. File the application with Puerto Rico's Department of Economic Development & Commerce (DDEC). Includes personal financials, intent statement, and a business plan if you're applying for Export Services.
3. Pay the filing fee (~$1,500–$2,500 depending on decree type).
4. Move to PR. This needs to happen during the application process, not after. The 183-day clock starts ticking the day you're physically there.
5. Establish bona fide residency: PR driver's license, PR voter registration, PR bank accounts, primary residence, etc.
6. Get your decree. 2–4 months for Individual Investor, 4–8 months for Export Services.
7. Buy your primary residence in PR within 2 years of decree grant.

5. Real costs

Item	One-time	Annual recurring
Government filing fee	~$2,000	—
Attorney fees (Individual Investor)	$3,500–$8,000	—
Attorney fees (Export Services)	$8,000–$15,000	—
PR LLC / Corp setup	$1,500–$3,000	—
Compliance / annual report filing	—	$5,000
Mandatory PR charity contribution	—	$10,000
PR CPA (annual returns)	—	$3,000–$8,000
Office lease (Export Services only)	—	$6,000–$30,000
Primary residence in PR	$300K–$2M+	property tax + insurance

6. Common mistakes

• Failing the 183-day test. Spending the 184th day in Miami is a real risk. Track your travel meticulously.
• Assuming pre-move gains qualify. They don't. Only post-residency appreciation gets the 0% treatment.
• Skipping the primary-residence purchase. Buying within 2 years is mandatory. Some decree holders try to skirt this with rentals — it puts the decree at risk.
• Picking the wrong neighborhood. Auditors look at your residence to assess bona fide intent. A Dorado estate or Condado condo reads as committed; a beach Airbnb-style rental reads as transient.
• Mixing Export Services revenue. Your PR Corp must serve clients OUTSIDE PR. Onboarding a PR client (or having even partial PR work) can disqualify a chunk of your revenue.
• Underestimating the lifestyle adjustment. If you can't actually live in PR happily, the decree isn't worth pursuing.

7. Realistic timeline

• Months 1–2: Initial attorney consultations, scenario modeling, paperwork prep
• Month 2: File decree application + initiate PR residency moves (driver's license process, bank accounts, lease)
• Month 3: Physical move; start the 183-day clock
• Months 3–6: Decree pending; live in PR, document everything, search for primary residence
• Months 4–6: Decree granted (Individual Investor) — typical
• Months 6–12: Buy primary residence; complete first PR tax-year filing
• Year 2: First $10K charitable contribution + annual compliance filing + annual fees

8. After your decree

The decree is granted "in perpetuity" but requires ongoing compliance:

• Annual filing with DDEC (~$5K compliance fee)
• Annual $10K charity contribution (to a DDEC-approved PR nonprofit)
• File PR tax returns annually
• Maintain 183+ days physical presence each year
• Keep your primary residence in PR
• Don't open the Export Services Corp to PR-sourced clients without restructuring

Decree holders who maintain compliance enjoy the benefits indefinitely. Sloppy compliance triggers an audit risk that can claw back years of saved tax.