Move your product-based business to Puerto Rico with confidence. Learn how to navigate Act 60, business registration, logistics, and setup step by step.

Moving your business operations from the U.S. to Puerto Rico can offer significant tax incentives and reduce certain overhead costs. Since Puerto Rico is a U.S. territory, you’ll also benefit from domestic shipping advantages. In this article, we’ll cover everything you need to know about compliance, business setup, infrastructure, and sourcing logistics when relocating a product-based business to the island.

1. Understanding Act 60 and Business Incentives

Under Act 60, eligible U.S. citizens can relocate to Puerto Rico and access a 4% corporate tax rate on qualifying services exported from the island. To qualify, you must become a bona fide resident of Puerto Rico, meaning:

You spend at least 183 days on the island each year

You don’t have a closer connection to any other country or U.S. state

For product-based businesses, your operations must involve eligible export activities. That means the products or services must be sent from Puerto Rico to clients outside the island. Examples include:

• Assembling products in Puerto Rico for international distribution
• Packaging and shipping goods to customers outside Puerto Rico

2. Business Compliance: Registering Your Business

You’ll need to register your business with the Puerto Rico Department of State. In addition, you must obtain any business licenses required for your specific industry, whether you’re in healthcare, finance, retail, or another sector.

Additional steps include:

• Apply for a Merchant’s Registration Certificate via the SURI platform
• Obtain a Municipal Business License in the municipality where your business will operate
• Register with the Puerto Rico Department of Labor and Human Resources if you plan to hire employees

3. Setting Up Banking and Finances

Open a local business bank account in Puerto Rico using your business registration documents and local address. This helps demonstrate your close ties to the island. Be sure to ask about online banking options, and always keep your personal and business accounts separate to stay compliant with Act 60 requirements.

4. Hiring and Labor Considerations

When hiring local employees in Puerto Rico, you’ll need to follow several employment laws that differ from those on the mainland. Key requirements include:

• Puerto Rico-specific minimum wage, which may differ from the federal rate
• Mandatory Christmas bonus for eligible employees
• Regulations on job postings and employee rights notifications

It’s also a good idea to have bilingual team members, especially for roles that involve customer service or documentation.

5. Infrastructure and Shipping Logistics

One of the advantages of doing business in Puerto Rico is that you get U.S. shipping benefits—there’s no need to deal with customs duties when sourcing products from the mainland. However, some goods are subject to local excise taxes, including vehicles, alcoholic beverages, plastic products, and certain other items. Review the list of taxable goods and check whether any of your products fall under these categories.

You might also want to explore using fulfillment centers based in Puerto Rico. Many offer warehousing and shipping services that can help with logistics. These can be found online, so reach out and speak with them directly before making your move.

6. Sourcing Products or Raw Materials

Depending on the type of product you’re exporting, there are differences to consider between local and mainland sourcing. Local sourcing in Puerto Rico may have some limitations, but it can be a great option for products like coffee, handmade goods, or textiles. If you’re importing from the mainland U.S., you’ll have access to a wider range of products and raw materials, though you should expect longer shipping timelines.

If you’re drop shipping, make sure your vendor is prepared to ship to Puerto Rico correctly by:

• Following proper documentation and labeling requirements
• Using approved carriers like FedEx or UPS
• Understanding applicable taxes or shipping fees based on the product type

7. Finding a Commercial or Retail Space

Many businesses start from home, but a storefront or warehouse is helpful if you manage inventory or in-person sales. Areas like San Juan are great for visibility, especially in tourist-heavy spots. Just be sure to check zoning laws and work with a real estate agent to stay aligned with Act 60 requirements.

Turn Your Plans Into Action

Moving a product-based business to Puerto Rico takes careful planning, but the benefits, including lower taxes, island living, and continued access to the U.S. market, can make it well worth it. If you’re ready to take the next step, we can help with your Act 60 paperwork and guide you through the transition. Book a free call with us to get started.