Editor’s note 1/1/2020: Act 20 and Act 22 have been replace by the Puerto Rico Incentives Code (Act 60-2019); you can read about the new incentives code here.

On July 11, 2017, Governor Ricardo Rosselló signed into law amendments to Act 20 (Export of Services) via House Bill 878, and Act 22 (Relocation of Individual Investors) via Senate Bill 369. These amendments aim to further grow the economy of Puerto Rico while promoting the creation of jobs, specifically within small and midsize businesses, creating a tax deal that can’t be matched by any offshore jurisdiction.

Key Amendments to Act 20

1. The addition of hospital services and laboratories, including medical tourism and telemedicine services, along with trading companies with no less than 80% of business coming from outside Puerto Rico.
2. Removal of the requirement of having 5 employees. However, employment figures and economic impact remain a consideration in the application evaluation process, and may be required by the Secretary.
3. Medical tourism and telemedicine facilities require 30% of doctors to be Puerto Rican residents.

Key Amendments to Act 22

1. Establishment of an annual donation of $5,000 per decree holder to a Puerto Rican nonprofit organization.
2. Removal of the requirement to purchase real estate within two years of residency.
3. Removal of the requirement to open a local bank account.
4. The individual must include evidence of Form 8898 in their annual Act 22 report.

If you received your grant prior to these changes, you may be able to get it amended to the new language.

Contact us for more information.

Disclaimer: Neither PRelocate, LLC, nor any of its affiliates (together “PRelocate”) are law firms, and this is not legal advice. You should use common sense and rely on your own legal counsel for a formal legal opinion on Puerto Rico’s tax incentives, maintaining bona fide residence in Puerto Rico, and any other issues related to taxes or residency in Puerto Rico. PRelocate does not assume any responsibility for the contents of, or the consequences of using, any version of any real estate or other document templates or any spreadsheets found on our website (together, the “Materials”). Before using any Materials, you should consult with legal counsel licensed to practice in the relevant jurisdiction.