{"id":71,"date":"2025-12-22T18:40:03","date_gmt":"2025-12-22T18:40:03","guid":{"rendered":"https:\/\/www.pr-taxincentives.com\/blog\/?p=71"},"modified":"2025-12-22T18:40:03","modified_gmt":"2025-12-22T18:40:03","slug":"how-act-60-benefits-physicians-a-guide-for-doctors-radiologists-therapists-and-medical-practitioners","status":"publish","type":"post","link":"https:\/\/www.pr-taxincentives.com\/blog\/2025\/12\/22\/how-act-60-benefits-physicians-a-guide-for-doctors-radiologists-therapists-and-medical-practitioners\/","title":{"rendered":"How Act\u202f60 Benefits Physicians: A Guide for Doctors, Radiologists, Therapists and Medical Practitioners"},"content":{"rendered":"\n

As a physician or medical professional, whether you\u2019re a radiologist, a tele\u2011medicine therapist, a consulting doctor, or a specialist in private practice, the idea of relocating to Puerto Rico may have crossed your mind.<\/p>\n\n\n\n

You\u2019ve likely heard about Act\u202f60\u2019s headline incentives \u2014 the 4% corporate rate<\/strong>, the 0% capital gains rate<\/strong>, the possibility of dramatically lowering U.S. federal tax liability<\/strong>. But what does Act\u202f60 really mean for physicians<\/em> and medical\u2011industry professionals?<\/p>\n\n\n\n

I\u2019ll walk you through how the law applies to your profession, what qualifying steps matter, what opportunities exist (including for tele\u2011health, remote therapy, radiology services, specialist consulting), and how to make sure you meet the compliance criteria and benefit fully.<\/p>\n\n\n\n

1. Why physicians are a strategic fit for Act<\/strong>\u202f60<\/strong><\/p>\n\n\n\n

Act\u202f60 (the Puerto\u202fRico Incentives Code) was designed to encourage growth of high\u2011value industries to the island, including service export operations \u2014 and physicians can fit squarely in that mold. According to the law, eligible export service activities include consulting and professional services rendered to clients outside Puerto<\/strong>\u202fRico<\/strong>. Because physicians and medical professionals often operate on a global, national, or remote\u2011service basis, the model dovetails well with the Export Services provisions.<\/p>\n\n\n\n

Currently thousands of doctors are utilizing the 4% tax rate as part of Puerto\u202fRico\u2019s physician\u2011incentive programs designed to retain or attract medical professionals. For specialists like radiologists working remotely, tele\u2011therapists offering online counseling to clients abroad, or physicians consulting from Puerto\u202fRico to U.S. markets, the incentive structure holds real promise.<\/p>\n\n\n\n

2. What physicians should understand about the relevant incentives<\/strong><\/p>\n\n\n\n

Export Services Incentive<\/strong><\/p>\n\n\n\n

Under Act\u202f60 (specifically Chapter\u202f3, Subtitle\u202fB, Section\u202f2031.01 of the Incentives Code), businesses that establish a bona\u2011fide office in Puerto\u202fRico, perform eligible services, and derive income from customers located outside the island may qualify for a 4% fixed net income tax rate<\/strong>. For a medical practice providing tele\u2011health or remote diagnostic services to U.S. or international patients, this can be an extraordinary benefit if properly structured.<\/p>\n\n\n\n

Capital Gains \/ Individual\u2011Investor Incentive<\/strong><\/p>\n\n\n\n

For physician\u2011investors or medical\u2011practice owners with investment portfolios, Act\u202f60\u2019s Individual Resident Investor incentives (Chapter\u202f2) may apply: bona\u2011fide residents may receive exemption or reduction of Puerto<\/strong>\u202fRico tax on certain capital gains, interest and dividends.<\/strong><\/p>\n\n\n\n

3. How your medical practice might qualify \u2014 practical considerations<\/strong><\/p>\n\n\n\n

A) Establishing a bona\u2011fide Puerto<\/strong>\u202f<\/strong>Rico entity<\/strong><\/p>\n\n\n\n

As a physician, you might establish a Puerto\u202fRico\u2011incorporated professional services firm (e.g., tele\u2011medicine practice, remote diagnostics, consulting) that qualifies under Export Services. That entity must have a bona\u2011fide establishment in Puerto<\/strong>\u202fRico<\/strong>, and your income must derive from non\u2011Puerto\u2011Rico clients or patients<\/strong>.<\/p>\n\n\n\n

B) Residency and personal qualification<\/strong><\/p>\n\n\n\n

You must become a bona\u2011fide resident of Puerto\u202fRico under U.S. tax\u2011code tests: physical presence, tax home, and closer\u2011connection tests. The medical practitioner scenario may be especially relevant because you may be spending time on the island and serving patients remotely elsewhere. But you must meet established criteria.<\/p>\n\n\n\n

C) Service delivery model<\/strong><\/p>\n\n\n\n

Radiologists working remotely, online therapists, medical consultants and international\u2011patient physicians may all satisfy the requirement that services be \u201cexported\u201d (i.e., delivered to clients outside Puerto\u202fRico, with no connection to Puerto\u202fRico). Eligible professional services and tele\u2011health fall under Act<\/strong>\u202f60 if delivered to non\u2011Puerto\u2011Rico clients or patients.<\/strong><\/p>\n\n\n\n

D) Compliance and substance<\/strong><\/p>\n\n\n\n

Beyond setting up the entity, you need documentation: contracts with non\u2011Puerto\u2011Rico clients, bank statements showing payments, Puerto\u202fRico payroll (if required), office or virtual office in Puerto\u202fRico (with the necessary permits) and clear proof of residency. Especially for a medical practice, you\u2019ll need to prove that your tax home shifted to Puerto\u202fRico and that decision\u2011making and substantial management occur on the island.<\/p>\n\n\n\n

4. What do doctors and medical professionals gain?<\/strong><\/p>\n\n\n\n

Reduced tax burden on practice income<\/strong><\/p>\n\n\n\n

If you establish your practice correctly, you may qualify for the 4% net income tax rate<\/strong> on your Puerto\u202fRico\u2011based corporation. That\u2019s a significant reduction compared to U.S. federal + state tax rates for many physicians.<\/p>\n\n\n\n

Capital\u2011gains and dividend benefits<\/strong><\/p>\n\n\n\n

If you qualify as a resident investor (or you invest personally), gains realized after your residency may be exempt<\/strong> or greatly reduced \u2014 an opportunity often overlooked by physician\u2011investors or multi\u2011discipline medical entrepreneurs.<\/p>\n\n\n\n

Lifestyle and geography advantages<\/strong><\/p>\n\n\n\n

For many physicians, relocating offers not just tax relief but improved quality of life: shorter commutes, easier work\u2011life balance<\/strong>, access to Caribbean nature and culture, and the ability to practice tele\u2011medicine from an environment with U.S. legal protections and infrastructure<\/strong>. This is particularly appealing in specialties where remote work, digital diagnostics, tele\u2011therapy, and consulting across borders are feasible.<\/p>\n\n\n\n

5. Challenges and what to watch out for<\/strong><\/p>\n\n\n\n

Enforcement and audit risk<\/strong><\/p>\n\n\n\n

The IRS and Puerto\u202fRico authorities have increasingly scrutinized Act\u202f60, especially the bona\u2011fide\u2011residence rules and sourcing of income. We help you ensure that both residency and sourcing tests are met and documented.<\/strong><\/p>\n\n\n\n

Residency drift or tele\u2011commuting confusion<\/strong><\/p>\n\n\n\n

If you continue significant U.S.\u2013based practice, spend many days in the U.S., or your decision\u2011making remains onshore, you risk failing the tax\u2011home or closer\u2011connection tests. Physicians must be especially mindful if they maintain U.S. operations simultaneously.<\/p>\n\n\n\n

Virtual\/remote practice still requires substance<\/strong><\/p>\n\n\n\n

Even if your services are remote, you still need a bona\u2011fide Puerto\u202fRico establishment, legal licensing if required, local payroll (in some cases), and valid documentation of your business\u2019s operational substance on the island.<\/p>\n\n\n\n

Timing of capital gains<\/strong><\/p>\n\n\n\n

If you are a physician who owns investments (practice sale, equity in medical startups, real estate, etc.), the date you become resident matters. Gains incurred before residency may remain taxable; the rules governing \u201csplit\u2011holding period\u201d and source rules can be complex.<\/p>\n\n\n\n

6. Steps for physicians considering the move<\/strong><\/p>\n\n\n\n

Step 1:<\/strong> Evaluate your practice model. Are you providing services to clients\/patients outside Puerto\u202fRico? Is your business remotely deliverable?
Step 2:<\/strong> Establish your Puerto\u202fRico entity and assess whether medical services fall under eligible Export Services or the physician\u2011incentive categories.
Step 3:<\/strong> Plan your move. Track days on the island, shift your tax home, relocate key decision\u2011making to Puerto\u202fRico.
Step 4:<\/strong> Document everything. Contracts, invoices, service records, payroll (if applicable), residency records.
Step 5:<\/strong> Apply for the Act\u202f60 decree (for the business and individual investor if applicable) and ensure you meet the personal\u2011residency tests. We can help you submit your application with all the required documentation.<\/strong>
Step 6:<\/strong> Manage ongoing compliance. Annual reporting, audit\u2011ready documentation, monitor any changes in law or IRS enforcement. Our team also assists with maintaining airtight compliance<\/strong> for both Puerto Rico matters with Hacienda and other government agencies, as well as U.S.-compliance with the IRS.<\/p>\n\n\n\n

7. Why you need professional guidance<\/strong><\/p>\n\n\n\n

As a physician, your situation is unique. You deal with licensure, clinical practice obligations, tele\u2011medicine regulations, patient confidentiality, and cross\u2011border services. A qualified CPA familiar with both U.S. and Puerto\u202fRico tax regimes (like my team at Delerme\u202fCPA) will help you navigate corporate structure, residency planning, licensing implications and audit risk.<\/p>\n\n\n\n

We guide clients through:<\/p>\n\n\n\n