Since its inception in January of 2012, Act 22 has been captivating individuals looking for tax breaks with the promise of 0% tax on interest, dividends, and capital gains. Puerto Rico offers these incredible tax incentives, combined with the fact that the IRS has no jurisdiction on it's sunny shores, to continue to draw high net worth investors to the island.
can help you get in on the action when you plan a move to Puerto Rico. We have extensive experience in this arena and will explain how to become a bona fide resident (BFR) so you can dramatically reduce your tax liabilities.
Act 22 Tax Incentives
Individual investors have a lot to gain by moving to Puerto Rico and becoming a bona fide resident. After establishing residency, individuals qualify for a number of significant tax benefits like:
- 100% tax exemption on short-term and long-term capital gains
- 100% tax exemption on interest and dividends
- Freedom from the IRS! Although Puerto Rico is a U.S. territory, bona fide residents are not subject to the rules and regulations of the IRS. As a resident, you are exempt from federal tax and will only need to pay taxes on income you made outside of Puerto Rico.
Qualifying for Act 22 Tax Breaks
To be eligible for Act 22 tax incentives, you must demonstrate that you have close connections in Puerto Rico during the tax year so you can become a bona fide resident. To qualify as a bona fide resident requires that you:
- Be present in Puerto Rico for more than half of the tax year (at least 183 days)
- Have a Puerto Rico voter's registration
- Don't own a permanent home in the United States
- Open a personal bank account in Puerto Rico
- Purchase a property in Puerto Rico
In addition to these requirements, many other aspects of your personal ties come into play. These include the location of your belongings, ownership of cars, memberships with social and political organizations, the address listed on official documents, and other factors.
Take Advantage of Puerto Rico Tax Incentives
Find out how you can say goodbye to the costly tax rules of the IRS and hello to 0% taxes on interest, dividends, and capital gains. Contact and we'll explain everything you need to know in plain English or Spanish.
Call us now at or request your online to learn more. Our has offices in the United States and Puerto Rico.