Puerto Rico is rapidly gaining attention as the go-to destination for individuals and businesses looking to maximize their earnings and reduce tax obligations. Central to this trend is Act 60, also known as the puerto rico tax incentives act60. If you’re investigating smart ways to grow your wealth, or if you follow the statistics and trends in tax planning, there are few strategies making as big of a splash right now as relocating with Act 60. This post highlights the compelling benefits behind this move and why many see Puerto Rico as the top trending destination for strategic relocation.
What Is Puerto Rico’s Act 60?
Act 60, often referred to as the Puerto Rico Tax Incentives Code, consolidates and modernizes the territory’s tax incentive programs. Introduced as an innovative way to stimulate economic activity and attract new residents, Act 60 merges and updates previous incentives for individuals and businesses. The law offers unique tax advantages, especially for U.S. citizens, given Puerto Rico’s status as a U.S. territory. This distinction allows for certain federal tax exemptions not available on the mainland.
Why Puerto Rico Is Trending for Tax Strategy
Relocation driven by Act 60 is experiencing a surge, with statistics showing a noticeable increase in migration to Puerto Rico for its financial advantages. Rising search volumes and trending social conversations reflect growing interest in maximizing savings and investment efficiency under Puerto Rico’s unique regulatory environment. Entrepreneurs, professionals, and even influencers are recognizing that the benefits go beyond tax rates alone.
Primary Benefits of Relocating with Act 60
Drastically Reduce Personal Income Tax
Act 60 enables eligible individuals to pay a significantly lower income tax rate on income sourced in Puerto Rico. For many, qualifying for Act 60 means personal income tax rates as low as 4%. This is considerably less than what high earners face in states like California and New York. The positive impact on take-home income is leading thousands to research and act on Puerto Rico relocation each year.
Long-Term Capital Gains Exemption
One of the standout advantages under Act 60 is the tax treatment of capital gains. Qualified new residents can enjoy a 0% tax rate on capital gains accrued after moving to Puerto Rico. This means if you sell appreciated assets after establishing residency, you could legally incur no capital gains tax liability at either the local or federal level. For seasoned investors or those experiencing a liquidity event, this translates into substantial long-term savings.
Tax-Friendly Environment for Businesses
Act 60 also rewards entrepreneurs and service business owners. Eligible businesses that export services from Puerto Rico can benefit from a corporate tax rate as low as 4% on eligible income. Service providers in industries ranging from consulting and marketing to software development are leading the trend, taking advantage of these incentives to scale faster and re-invest more aggressively.
No Federal Income Tax on Puerto Rico-Sourced Income
Puerto Rico holds a unique position that allows bona fide residents to avoid federal income tax on most Puerto Rico-sourced income. This builds on the already attractive local rates. Trend reports and data show that high-income earners, digital nomads, and remote workers increasingly cite this specific benefit as a key factor in their decision to relocate.
