Discover what business travel looks like after moving to Puerto Rico under Act 60, including residency tests, expenses, and airport travel.

Business travel is often an essential part of operating an export services business from Puerto Rico under Act 60. However, there are specific requirements you must follow, such as the bona fide residency tests, when it comes to travel. This article will guide you through what business travel looks like once you’ve relocated to the island.

Becoming a Bona Fide Resident First

To be recognized as a bona fide resident of Puerto Rico, you must meet three key tests:

Physical Presence Test

To meet the physical presence test, there are a couple of important requirements:

The purpose of these rules is to prevent people from only living in Puerto Rico part-time while still claiming the tax benefits. Adherence to these regulations shows your commitment to making Puerto Rico your primary home and contributing to the island’s economic growth.

When it comes to business travel, you are free to travel for work. However, if your trips involve time in the U.S. or abroad, you must carefully track your days to stay in compliance with Act 60.

Types of Business Travel

Like in the U.S., here are some examples of activities that can qualify as business travel expenses in Puerto Rico:

Deductions for Business Travel Expenses

Depending on the type of travel you take, you will have business-related expenses that qualify as deductible in Puerto Rico. Examples include flights, transportation like taxis and rental cars, site visits, and conference registrations. These travel expenses are subject to a 50% limitation, meaning you are able to deduct half of the total costs.

Meals and entertainment are treated differently. Client dinners, networking meals, or tickets to certain events can be deducted up to 75% of the cost. To maintain Act 60 compliance, make sure to keep detailed records, including receipts, spreadsheets, and/or physical documentation of the purpose for each business expense.

Getting There: Puerto Rico’s Airports

Puerto Rico offers a range of airports that make business travel convenient, whether you’re flying locally or internationally. There are both major international airports and smaller regional options, giving you flexibility depending on your destination and schedule. These airports are spread across different parts of the island, from large cities to smaller towns.

The advantage of having several airports is the ease of access to multiple regions. Plus, flights are widely available and straightforward to book.

Final Thoughts: Business Travel, Puerto Rico Style

As a quick recap, business travel from Puerto Rico requires that you meet the bona fide residency test, including the physical presence requirement. Travel is permitted and deductible, though with certain limitations. Fortunately, the convenience of both local and international airports makes business travel simple and accessible.

If you’re planning to relocate, schedule a call with one of our experts so we can guide you through Act 60 documentation and compliance while you grow your business.