How to Prepare for a Move to Puerto Rico to Enjoy Lucrative Tax Incentives
- Posted: January 29, 2021
- Posted by: Travis Lynk
- Last Reviewed: January 29, 2021
Puerto Rico has long been touted as an island paradise. Given that the island is owned by the United States, it’s a popular vacation destination for Americans due to the ease of access. However, for some Americans, Puerto Rico is more than just a vacation spot—some make the move to relocate to the island permanently. Lucrative tax incentives, such as Act 60 Export Services and Individual Resident Investor incentives, only fuel the desire to move to the Caribbean island and enjoy not only a paradisiacal beach lifestyle but also generous tax benefits.
Moving to a new territory, however, is a complicated process, and it requires some preparation. Here are some tips on preparing for your move to Puerto Rico.
Collect important documents
You need documents like your birth certificate and Social Security card on hand to complete many of the bureaucratic procedures associated with relocating to Puerto Rico to take advantage of the Act 60 tax incentives. You need originals, not copies.
Request a criminal background check
You have to prove your good moral standing before Puerto Rico will allow you into their territory long term. Different states have different requirements, and some require fingerprinting, which elongates the process.
Obtain an official copy of your state driving record
If you want to get a Puerto Rico driver’s license—and it’s recommended that you do—you should request an official copy of your state driving record from your local DMV. You’ll need to present it at your local Driver Services Center (CESCO) in Puerto Rico to get your Puerto Rican driver’s license.
Submit an application for the Act 60 tax incentive
Decide whether you want to move your business (Export Services) or yourself (Individual Resident Investor), and file your tax incentive application. If you need assistance or guidance, reach out to professionals and make the process dramatically easier for yourself.
See your doctor in the US
If you have any medical concerns or just want a checkup, it’s a good idea to see your doctor in the US before relocating to Puerto Rico. Though the island is brimming with skilled doctors, it’ll take some time to switch over your health insurance and secure a new family doctor.
Make the move to Puerto Rico!
The easiest and most exciting step: get on a plane and fly to Puerto Rico!
Renounce your right to vote in U.S. elections
Puerto Rico may be US-owned, but it has its own political system entirely, and Puerto Rico residents cannot vote in U.S. elections. Giving up your right to vote in U.S. elections and assume the right to vote in Puerto Rico elections can also help you pass the “closer connection” test to prove bona fide residency in Puerto Rico.
Apply for a Puerto Rico driver’s license
Also helpful to pass the “closer connection” bona fide residency test is obtaining a Puerto Rican driver’s license. Be prepared to give up your U.S. driver’s license, since you’re only allowed to have one.
File a declaration of non-domicile in the US and a declaration of domicile in Puerto Rico
Once you’ve set yourself up at your new Puerto Rican address, locate the Office of the Clerk in your current state of domicile and file a declaration of non-domicile. Then, file a declaration of domicile in Puerto Rico. Doing so is necessary to properly adjust your income tax status.
You can get by in Puerto Rico with English, so this isn’t a requirement, but Puerto Ricans are more comfortable speaking Spanish and will respect you more if you can engage with them in their native language. Even if you only learn the language to a moderate level, your business and social opportunities will broaden dramatically.
Moving to Puerto Rico is a lot of work, but the generous tax benefits of Act 60 and the beautiful island paradise you get to call home are more than worth it. These processes are but investments in a brighter, happier future with year-round gorgeous weather.
Disclaimer: PRelocate, LLC is not a law firm, 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 tax incentives, maintaining bona fide residence in Puerto Rico, and any other Puerto Rico tax or residency related issues.