We wish to congratulate the lawyers of DLA Piper Latin America who have earned the award of 2020 Best Lawyers in their respective regions and fields. FELICIDADES!
2020 LATIN AMERICA LAWYERS OF THE YEAR
To promote, attract and develop key industries, sectors and activities, Puerto Rico offers a spectrum of economic incentives, among them low fixed income tax rates, partial and/or total tax exemptions, income tax credits and special…
The principal goal of International Financial Entities (IFEs) is to attract United States and foreign investors to Puerto Rico. IFEs are licensed and regulated by the Office of the Commissioner of Financial Institutions pursuant to…
HR 6427, a potentially important piece of financial services related legislation, has been passed by the US House of Representatives by a vote of 391-2. Entitled “The Creating Financial Prosperity for Businesses and Investors Act,” the bill aggregates six House Financial Services Committee measures that each previously passed the House with bipartisan support.
The bill is seen as a move by Republican leadership, particularly newly re-elected Financial Services Committee Chairman Jeb Hensarling (R- TX), to promote capital formation and remove barriers to growth faced by small businesses and startups. While there is no guarantee the Senate will approve the Bill, the House would not be trying to get something to the Senate unless there was at least some chance for it to get through. Observers have even suggested that individual pieces of HR 6427 – which is more or less a compilation of prior bills approved by the House – may get through the Senate in the wake of the House’s recent and overwhelmingly bi-partisan approval.
Of particular relevance to financial services industry practitioners are the following portions of the bill:
Find out more about these aspects of the bill by contacting the author.
In the midst of a complicated fiscal situation, Puerto Rico continues to attract investors and companies through two extant tax incentive packages: Puerto Rico’s Act 20 – the Promotion of Export Services Act – and Act 22 – the Act to Promote the Relocation of Individual Investors to Puerto Rico.
Act 20 and Act 22 were enacted in Puerto Rico in 2012 to promote the exportation of services by companies and individuals providing such services from Puerto Rico and the relocation of high-net-worth individuals to Puerto Rico. Both laws aim to provide attractive incentives to encourage investors to relocate to Puerto Rico, while also encouraging local service providers to expand their businesses by offering their services to clients located outside Puerto Rico. The laws strive to contribute to the growth of the Island’s economy and, since their enactment over four years ago, have been embraced on a bipartisan basis on the Island as an important part of the government’s economic development plan.
At the heart of these incentives is Puerto Rico’s unique tax status: even though Puerto Rico is a territory of the United States (and generally subject to all US. federal laws), it is treated as a “foreign country” for US federal income tax purposes, and a special tax treatment applies to its residents. This unique situation has allowed Puerto Rico to enact tax incentives that are geared to promote its economic development and that may be attractive to US persons. These incentives promote the establishment of manufacturing operations, tourism activities, international banking operations, international insurance operations and production of films in Puerto Rico, among others.
In this alert, we summarize the tax benefits available under Act 20 and Act 22 that may be of interest to individuals and companies seeking a general understanding of the potential tax benefits of moving to or relocating all or part of their operations to Puerto Rico.