Puerto Rico

Last update: 2026-04-29

Pros
Significant tax exemptions on capital gains and dividends through Act 60 for qualifying residents.
Access to United States markets and legal protections without federal income tax on local income.
Strategic Caribbean location offering a high quality of life and proximity to American trade hubs.

Cons
Fragile electrical infrastructure and high utility costs leading to frequent power outages and operational disruptions.
Systemic government bureaucracy and corruption issues slowing down permit processes and private sector growth.
High local sales taxes and complex labor regulations increasing the overall cost of doing business.

Personal income

0 → 33%

progressive

Corporate

18.5 → 37.5%

progressive

Capital gains

15%

flat

VAT (standard)

11.5%

standard rate

i 4 VERY LOW TAX

i 2 CRYPTO HAVEN

i 2 PRIVACY GRADE

i 2 EASY CITIZENSHIP

i 1.3 HOLDING

i 0.5 DIVIDEND PIPELINE

─ On this page

01 Will Puerto Rico tax what you earn? 02 Will Puerto Rico tax what you own? 03 Is it easy to run a company in Puerto Rico? 04 Is Puerto Rico good for your holding company? 05 What does it cost to come and go from Puerto Rico? 06 Will Puerto Rico protect your privacy? 07 Is Puerto Rico itself a liability? 08 Will you feel free in Puerto Rico?

01/08

Will Puerto Rico tax what you earn?

●income tax ●tax residency ●territorial system

YES, A LOT. Personal income is taxed heavily in Puerto Rico (top marginal rate 33%), but the residency test is unusually permissive. The bill is steep; the trick is not to trip into resident status without meaning to.

Personal income taxi

0 → 33%

progressive · 5 brackets

Income simulatori

Income

Tax due

Effective rate

all-in

Marginal rate

+5%

Applied on the excess of total net taxable income over USD 500,000 (Gradual adjustment tax)

Tax residence testi

183days

● 183-day rule

○ Economic interest

○ Family centre

● Habitual abode

○ Extended-stay test

● Just one rule above is enough to make you tax-resident here.

02/08

Will Puerto Rico tax what you own?

●capital gains ●wealth tax ●inheritance ●dividends ●interest

YES, BUT LIGHTLY. Puerto Rico taxes capital gains lightly (15% at the top), with no annual wealth charge and no inheritance regime. A held portfolio compounds with minimal friction; the state only shows up at disposal.

Capital gainsi

15%

flat · +5% net taxable income exceeds USD 500,000 (gradual adjustment tax)

Dividend taxi

15%

flat

Interest incomei

33%

progressive

Wealth taxi

NONE

no annual wealth tax · no real-estate wealth tax · no net-worth assessment

Crypto · tax regimei

Regime

PROGRESSIVE

Rate

33%

Puerto Rico classifies crypto as property. Standard residents pay 15% on long-term capital gains (held >12 months) and up to 33% on short-term gains. However, under the Act 60 (Individual Resident Investor) incentive, qualified residents pay 0% on capital gains accrued after becoming a resident. Crypto-to-crypto trades are considered taxable events. Sources: PR Internal Revenue Code Section 1023.02, Act 60-2019 (Incentives Code).

Crypto-to-cryptoi

TAXABLE

each swap counts as a disposal — gains realised at every trade

FATF travel rulei

NOT SIGNED

no information-sharing obligation on VASP transfers

Inheritance systemi

NONE

no estate tax · no heir-based duties · no succession tax framework. Wealth transfers across heir-classes are not taxed in this jurisdiction. Only standard probate / registration fees may apply.

03/08

Is it easy to run a company in Puerto Rico?

●corporate tax ●criminal liability ●public registry ●VAT ●IP box

NO. Corporate tax in Puerto Rico is 37.5% with no IP-box relief, on top of VAT at 11.5. Running a company here is operationally fine but fiscally expensive: the state takes a large bite of every unit of profit.

Corporate taxi

18.5 → 37.5%

progressive · +50% Improperly accumulated earnings to prevent the imposition of tax on shareholders or partners · +10% Deemed dividend amount attributable to a foreign owner (50% or more ownership) · +10% Dividend equivalent amount for corporations operating as a branch (Branch Profit Tax)

IP Box · Patent Boxi

NONE

no IP regime · IP income taxed under standard corporate rules

Misuse of corporate assetsi

NO CRIMINAL LIABILITY

Civil Matter / Breach of Fiduciary Duty

Puerto Rico follows the United States corporate law tradition (specifically modeled after Delaware). In the case of a sole shareholder and a solvent company, the personal use of corporate funds is not a criminal offense because the owner's consent precludes the 'intent to defraud another' required by statutes like Article 230 of the Puerto Rico Penal Code (Fraudulent Administration). Instead, such conduct is treated as a civil matter under the 'alter ego' or 'piercing the corporate veil' doctrines, or as a tax violation (constructive dividends) under the Puerto Rico Internal Revenue Code.

Shareholders privacyi

PRIVATE

Puerto Rico Department of State - Registry of Corporations

Directors privacyi

PUBLIC

Puerto Rico Department of State - Registry of Corporations

Incorporation costi

Limited Liability Company (LLC)

Compañía de Responsabilidad Limitada

Certificate of Formation (Department of State Filing Fee) USD 250

Professional Incorporation Service (Operating Agreement, EIN, and SURI registration) USD 750

Total USD 1,000

VAT standard ratei

11.5%

2 distinct tiers in force

0% 11.5%

Food & drink

food

11.5%

non-alcoholic

11.5%

alcohol

Print media

11.5%

ebooks

Culture

11.5%

cultural events

11.5%

cinema

11.5%

theatre

11.5%

museums

11.5%

sports

Hospitality

11.5%

restaurants

11.5%

takeaway

Health

pharma

Digital & telecom

11.5%

digital

04/08

Is Puerto Rico good for your holding company?

●treaty network ●participation exemption ●withholding

NO. Puerto Rico doesn't carry a treaty network, which makes it unsuitable as a holding jurisdiction. Any dividend flowing in or out faces full statutory withholding, and no domestic participation exemption can compensate for missing relief on the source side.

Territorial systemi

Individuals

WORLDWIDE

Corporates

WORLDWIDE

Individuals: worldwide income taxation regardless of source. Corporates: worldwide.

Participation exemptioni

NONE

no dividend participation exemption regime

CFC rulesi

NONE

no controlled foreign corporation regime · foreign-source corporate income out of scope

WHT · dividendsi

10%

non-resident outbound

WHT · interest

29%

non-resident outbound

WHT · royalties

29%

non-resident outbound

Tax-haven WHT

—

no punitive rate on record

Treaties signedi

active

Treaties pending

—

in negotiation

Tax treaty networki

origin · PR 0% > 0% no treaty

⌖

Inspect a country

Hover any country on the map to read its withholding-tax treaty with PR.

Country	Status	Dividends	Interest	Royalties

∅ // no treaties match

05/08

What does it cost to come and go from Puerto Rico?

●exit tax ●territorial system ●dual citizenship

SOME. Puerto Rico taxes worldwide income while you're resident, but there's no exit tax on the way out. The cost of leaving is mostly paperwork: unrealised gains follow you to the next jurisdiction untouched.

Exit taxi

NONE

no triggers active · residence change tax-free · no deemed-disposal mechanism

Dual citizenship

ALLOWED

naturalised citizens may keep their existing nationality

Citizenship paths

● Residence

● Marriage

● Birth

● Descent

○ Investment

06/08

Will Puerto Rico protect your privacy?

●info exchange ●corporate registries

YES. Puerto Rico has joined almost none of the major automatic-exchange frameworks (CRS, FATCA, CARF, MLI, MAAC), and its corporate registries are non-public. Account flows stay out of foreign hands; ownership stays out of public ones. Discretion is built into the system.

Multilateral reporting frameworks 0/10 active

CRS

—

CARF

—

FATCA

—

MLI

—

BEPS

—

MAAC

—

GLOBAL FORUM

—

EOIR

—

CRYPTO-CARF

—

CRYPTO TRAVEL RULE

—

07/08

Is Puerto Rico itself a liability?

●blacklists ●FATF standing

SOMEWHAT. Puerto Rico is flagged by one or two national tax authorities and sits outside FATF membership. Selective friction: anti-abuse rules trigger on transactions in specific corridors, and counterparties tend to ask more questions.

Blacklist exposure Listed by 1 authority

FATF

grey / black list

non-cooperative list

FRANCE

ETNC list

SPAIN

tax-haven list

PORTUGAL

favourable regimes

BRAZIL

low-tax list

08/08

Will you feel free in Puerto Rico?

●press freedom ●crypto ●CBDC ●EU

Not enough data to assess civil liberties and financial freedom in Puerto Rico.

Press freedom · RSF indexi

—

Central bank digital currencyi

NONE

no announced CBDC program · no pilot · no retail or wholesale prototype on record

Other jurisdictions worth comparing

Picked by similarity of strategic profile to Puerto Rico. No editorial ranking — neighbours in the same scoring space.

PROFILE-ADJACENT Same shape, comparable overall friction.

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NOTABLY MORE FAVORABLE Same family of strategies, higher total score.

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NOTABLY LESS FAVORABLE Same family of strategies, lower total score.

Haiti HT → South Sudan SS → Syria SY →