Part III in Blog Series on Puerto Rico: An Interesting Twist
My interest in the island grew tremendously during the week I visited. On the last day of my vacation, I turned on the TV to check the news, and discovered an interesting trend that is occurring. There was an “invitation only” convention of the wealthiest Americans scheduled for the very next day. I discovered that the island was positioning itself to be a new tax haven in order to woo businesses and wealthy individuals there. My curiosity had again been piqued and I had to learn more. Upon my return home, I discovered what all of the buzz was about. As it turns out, the purpose of this particular meeting was to promote two tax laws that have been in existence since 2008. The two tax laws are Act 20 and Act 22 and were enacted in order to attract investors and employers to the island.
The first, Act 20, was created in order to combat the high unemployment rate and increase exports from the island. It is intended to attract businesses to the island. Those that employ more than three persons will enjoy a flat tax of only 4% and also a 100% exemption from profits made from exporting their goods and services.
The second new law, Act 22, is certainly a potential opportunity for some. The law was enacted in order to attract wealthy Americans to the island. It allows resident investors to escape U.S. taxes on dividends and capital gains. The catch is that you must make the island your primary residence.
Who would have known that a family vacation destination to Puerto Rico would peak my curiosity so much during and after my visit! Experiencing the rich culture, the beautiful landscape, the interesting history and a better understanding of the local economies of Puerto Rico has been an enriching experience. Next time you plan a vacation, consider a destination where you can truly learn and experience a plethora of new things before, during and after your visit.
**Consult a tax advisor before acting on anything you might have construed as advice from this blog.