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Tools for Business Growth

Government Incentives for Young Entrepreneurs, SMEs and Export Services

· Incentives,startups,GoGlobal

Government incentives as part of a strategic plan can be useful tools for business growth. With a new economic reality, Puerto Rico offers an aggressive incentive package to foster entrepreneurship and connect local companies with the global economy. Three incentives are leading the way:

Young Entrepreneurs

  • 0% fixed income tax rate up to $500,000 in gross income
  • 100% tax exemption on personal and real property taxes
  • 100% tax exemption on municipal license taxes
  • 3-year tax decree

This Incentive is available for entrepreneurs between the ages of 16 and 35 years old. The evaluation of applications to receive the incentives and benefits here described are subject to the dispositions applicable under the law and regulations. Contact us to get advised on how to integrate this incentive into your plans for business growth. Act 135 of 2014.

New Small & Medium Enterprises (SMEs)

  • 5% fixed income tax rate for 1st year, 2nd year: 10% and 3rd year: 15%
  • 50% reimbursement of the federal minimum salary ($3.63 per hour) up to 15 employees for 12 months.
  • 50% tax exemption on personal and real property taxes, municipal license taxes and on policy costs with the State Insurance Fund Corporation
  • 3-years tax decree

Other benefits and requirements for Existing SMEs and SMEs with Net Operating Losses. The evaluation of applications to receive the incentives and benefits here described are subject to the dispositions applicable under the law and regulations. Contact us to get advised on how to integrate this incentive into your plans for business growth. Act 120 of 2014

Incentives as Tools for Business Growth - Act20 for Export Services, Act120 for PyMEs and Act135 for Young Entrepreneurs

Act 20 for Export Services Companies

  • 4% fixed income tax rate on income related to the export of services
  • 100% tax exemption on income tax rate from dividends or profit distributions
  • 90% tax exemption on personal and real property taxes
  • 60% tax exemption on municipal license taxes
  • 20-year tax decree, renewable for an additional 10-year period

This incentive is also available for Local Companies with plans to export services. The evaluation of applications to receive the incentives and benefits here described are subject to the dispositions applicable under the law and regulations. Contact us to get advised on how to integrate this incentive into your plans for business growth. Act 20 of 2012

Puerto Rico also offers other complementary incentives for Manufacture, Tourism, Financial Services, Insurance, Researchers and Individual Investors, among others sectors.

Every tax incentive granted constitutes a contract with the government of Puerto Rico that is legally guaranteed and protected by United States law. It is important to point out that Puerto Rico operates as a Foreign Tax Structure, where federal income taxes doesn’t apply. It works with the Controlled Foreign Corporation (CFCs) tax treatment, in which federal income taxes are differed until repatriation of profits.

DuartePino is a management advisory firm that combines in-depth customer knowledge with practical expertise in marketing to help clients create sustainable business growth. We can provide your organization with a fresh perspective, a proven process that invests in the outcome, and the tools for successful execution. Contact us to learn more about growth strategies for your organization.

DISCLAIMER. The materials contained on this website are for general information purpose only. They do not constitute official legal, investment or professional advice. The reader may not rely only on the contents of this article as such. DuartePino assumes no liability for accuracy, completeness, or usefulness of any information contained in this article and expressively disclaim all liability for damages of any kind arising out of use, reference to or reliance on any information provided in this article. The evaluation of applications to receive the incentives and benefits here described are subject to the dispositions applicable under the law and regulations.

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