If you are looking for a new place to invest your money, Puerto Rico may be the perfect option. Thanks to Act 22, investors can enjoy a number of tax advantages when they purchase property or businesses on the island. In this blog post, we will discuss some of the key benefits of investing in Puerto Rico. Whether you are interested in purchasing property or starting a business, act 22 Puerto in Puerto Rico is definitely worth considering!
What is Act 22, and what are the benefits for investors?
Act 22 is a tax incentive that was enacted by the Puerto Rico government in 2012. It offers zero federal personal income taxes on any dividends, interest or capital gains earned after someone has become a Puerto Rico resident or citizen. This means that if you’re looking to invest in property or businesses on the island, Act 22 will allow you to keep more of your money than in other places where there may be higher taxes, like New York City and California!
The benefits for investors include a Zero per cent capital gains tax rate, no dividend withholding taxes, and an exemption from US estate inheritance duties, usually paid at 40%. In addition, this act allows individuals who have not resided in PR before (but now do) -to enjoy these same benefits for 15 years starting from when they became residents- even if they aren’t actually citizens yet.
It’s important to note that this incentive only applies after someone has become a resident or citizen of Puerto Rico and not before, so it won’t help those looking for ways to pay taxes in their home country by moving there temporarily without really relocating permanently. In other words: these benefits come with an obligation! If you want the zero per cent capital gains tax rate on dividends, interest and capital gains earned within PR, then make sure to move there permanently first; otherwise, don’t expect any special treatment.
To be eligible for the tax breaks offered by Act 22, you must become a resident or citizen of Puerto Rico. This can be done in a number of ways, including through marriage to a PR citizen, birth on the island or naturalization. Once you’ve become a resident or citizen, you will enjoy zero per cent capital gains tax rates on any dividends, interest or capital gains earned within Puerto Rico. You will also be exempt from dividend withholding taxes and US estate inheritance duties. The only catch is that you must reside in Puerto Rico permanently in order to qualify for these benefits – temporary visits don’t count!