Insiders: Financial Advisors Get Paid More by Leveraging a 4% Tax Incentive Law!

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Tax Incentive Law

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In 2012, Puerto Rico enacted two (2) laws, Acts 20 and 22, that can earn an advisor hundreds of thousands of dollars more by paying less taxes!

Benefits provided under the Act 20 decree:

  • 4% fixed income tax rate;
  • 100% tax exemption on distributions from earnings and profits;
  • 100% tax exemption for the initial five (5) years of operation from personal taxes for certain types of businesses, and 90% tax exemption thereafter for the term of the tax exemption decree;
  • 60% tax exemption on municipal taxes (90% tax exemption if the business operates in the industrial development zone constituted by the municipalities of Vieques and Culebra);
  • the tax exemption decree has a term of 20 years, with a possible 10-year extension; and
  • to benefit from Act 20, the service provider needs to submit an application

Benefits provided under the Act 22 decree:

  • 100% income tax exemption (including alternative minimum tax) on interest and dividends received;
  • 100% exemption on short-term and long-term capital gains accrued after becoming a resident of PR and realized before January 1st, 2036; and
  • 15% tax on long-term capital gains accrued before the PR residency is established and realized within 10 years of becoming a PR resident (5% after 10 years, but before January 1st, 2036 on gain accrued before becoming a PR resident).

Find out how you can capitalize on these laws.

Complete the form for more information and download case studies of advisors who are taking advantage of these laws and the significant earnings they have received.