Under Puerto Rico law, Act 273 delivers money-saving tax incentives to new banking and financial businesses that become International Financial Entities (IFE). IFEs are entities whose facilities are located on the island but offer traditional banking or financial services to non-Puerto Rican clients.
As your CPA firm, Delerme CPA, LLC will provide guidance on how your business can become an IFE and how to qualify for the highest tax savings possible under this decree. We'll help you through the process of becoming an IFE so your financial services business is ready to receive all the tax breaks possible from Puerto Rico.
Act 273 Tax Incentives
As an IFE, your financial services business has the potential to become more profitable than ever. You'll qualify for significant tax breaks and exemptions that will allow you to hold onto more revenues at tax time and see a better bottom line. These incentives include:
- 4% flat income tax rate
- 100% exempt from all property taxes
- 15-year tax decree that is renewable for two additional 15-year periods
- For shareholders that are Puerto Rico residents, distributions from earnings are taxed at 6%
IFE Eligibility Under Act 273
To become an IFE, your business applies for a permit with the Office of the Commissioner of Financial Institutions and pays a one-time fee of $5,000. You must also meet certain requirements like having:
- Authorized capital stock of at least $5,000,000 ($250,000 must be paid)
- At least four employees working at offices within Puerto Rico (this can sometimes be waived)
If you're ready to learn more about exploring a move to Puerto Rico and becoming an IFE, the accountants at Delerme CPA, LLC are ready to tell you everything you need to know. Call us now at (404) 445-8095 or request your free consultation online to learn more. Our CPA firm has offices in the United States and Puerto Rico.