Relocating to Puerto Rico for Tax Act 20 & 22?

Now is easier for those Relocating to Puerto Rico, for Act 20 & 22. Check the new changes! https://goo.gl/YC6uhS

Hmm, looks like Mrkpytn's manufacturing may well qualify with this amendment:

"Section 1.- Amendment are made to subsection (k) Article 3 of Act 20-2012 as follows:

Article 3: Definitions;

(k) Eligible services include the following:
(xvi) Hospital services and laboratories including medical tourism and telemedicine facilities;
(xxi) Companies dedicated to international trading (known as trading companies) – Trading companies will mean any entity that produces no less than 80% of gross income from the following:
(a) sales to any persons or entities that are outside of Puerto Rico, for use, consumption or disposition outside of Puerto Rico, of products which have been manufactured inside or outside of Puerto Rico and have been bought by the eligible business for resale;"

If I understand him correctly, paragraph (a) seems to describe him well, so long as he sells none of his products in Puerto Rico.

Thanks for the information. If I were to sell my products in Puerto Rico which is not necessary my guess is that it would be subject to the IVU tax.
  I could sell wholesale to designers and I believe it would be their responsibility.
Since I am not dependant on a Puerto Rican customer base and if it is too complicated I would not pursue that venue.
  I have another product line offshoot that could be of interest to Architectural firms but this would not involve a retail situation so I will look into the implications of product availability in Puerto Rico if it is cost effective.
With NYC and Miami so accessable doing a trade show in these types of places would be more time effective than a Puerto Rican trade show.
I would like to make my presence known in Puerto Rico and that could take place by word of mouth if it proves good enough to be talked about. Social network is an amazing means of promotion based on merit and not big advertising dollars. All this is a great adventure  and I look forward to sharing what it entails.

WarnerW :

Hmm, looks like Mrkpytn's manufacturing may well qualify with this amendment:

"Section 1.- Amendment are made to subsection (k) Article 3 of Act 20-2012 as follows:

Article 3: Definitions;

(k) Eligible services include the following:
(xvi) Hospital services and laboratories including medical tourism and telemedicine facilities;
(xxi) Companies dedicated to international trading (known as trading companies) – Trading companies will mean any entity that produces no less than 80% of gross income from the following:
(a) sales to any persons or entities that are outside of Puerto Rico, for use, consumption or disposition outside of Puerto Rico, of products which have been manufactured inside or outside of Puerto Rico and have been bought by the eligible business for resale;"

If I understand him correctly, paragraph (a) seems to describe him well, so long as he sells none of his products in Puerto Rico.

So I can sell Alcapurrias to the states and qualify, Weepa. (kidding , too much work).

Yes Warner,

The purpose of Act 20 is to develop Puerto Rico as an international export services center. If you have a business with that in mind. You may qualify!!

Rey, it sounds easy but is not. You could quality if you make a unique type of Alcapurria lol. People go crazy for Puerto Rican stuff in the states.

KWRealEstate_Act2022 :

Yes Warner,

The purpose of Act 20 is to develop Puerto Rico as an international export services center. If you have a business with that in mind. You may qualify!!

Right, but the operative word is (or at least was) "service".  An economy is made up of three sectors: agriculture, manufacturing and services.  Act 20 was designed to attract service industry to the island, but ones that would not displace domestic service providers.  Thus the requirement that the services be international.

What Mrkptyn is doing (again, if I understand it correctly) is not services, but manufacturing.  He is importing raw materials, assembling them into a finished product, and selling them.  That seems to me to be the very definition of "manufacturing".  Isn't that, after all, what automobile manufacturers do?

But now it seems that the PR government is so desperate to attract businesses that they have redefined "services" to include manufacturing -- so long as it is for the international market, and doesn't displace domestic manufacturing.  They also don't seem to care so much about the direct creation of jobs, relying instead on increased consumption of local goods and services to drive the local economy.

For what its worth, I think this is a good idea on their part.  However, I would note that the willingness of the PR Government to change the rules of the game is troublesome.  While I find this current promise attractive, can I trust the Government to keep it's promises?  Thousands of investors would tell me otherwise.

Hi, I don’t qualify for acts 20 or 22 because my company is past series a and I cannot re-incorporate and I draw a regular salary. I was wondering if anybody had a tax attorney with whom I may speak because I will be drawing my revenue from the United States but living in Puerto Rico and I want to make sure that I’m not effectively doubling my tax rate. As I understand I will pay federal and then a small portion of Puerto Rico because I will receive a credit for paying federal but I want to doublecheck before I wrap up my affairs.

Hi Chritian,
I highly recommend Gerard ***. He specializes on Act 20 and 22. He is definitely up to date with these two laws.

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Perfect, thank you!!!!

KWRealEstate_Act2022 :

Rey, it sounds easy but is not. You could quality if you make a unique type of Alcapurria lol. People go crazy for Puerto Rican stuff in the states.

I could since what I do is web security and Penetration Testing, but I am too lazy at the moment to get back to work, so if I do 3-4 months worth of work a year I will do it as a regular local and pay the standard taxes. Not motivated to go back to work.

Rey let’s talk I own a b2b platform and if I have your information that would be great for when our next round of testing comes up!

ChristianEKR :

Rey let’s talk I own a b2b platform and if I have your information that would be great for when our next round of testing comes up!

I send a private message.

I'm visiting PR beginning next Wed afternoon. I would like to meet some expats if possible and learn more about PR. I'm also looking for an attorney and tax advisor. PM any contact information if you have recommendations. Thank you!

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