Two initiatives passed in 2012—Acts 20 and 22—that are meant to attract wealthy individuals and companies to their shores. Act 20, otherwise known as the Export Services Act, exempts businesses that have moved to Puerto Rico from taxes on dividends and profit distributions. On top of that, it caps earnings tax for these companies at 4%. Act 22, the Individual Investors Act, waves takes on dividends, interests, and capital gains for new residents.
The Capital Press
When people think of Puerto Rico, wealth isn’t usually the first thing that comes to mind.
According to Fortune Magazine, 45% of Puerto Rico’s population lives below the poverty line and unemployment has soared to 15%.
But lawmakers on the island are hoping to change that.
“it’s working. We are receiving a lot of entrepreneurs who are partnering with our people, creating jobs, and we are really happy with the program.”
Puerto Rico’s Secretary of Economic Development, Alberto Baco (Bloomberg)
Garza warns that it will take time before Puerto Rico becomes the island paradise that people like Paulson anticipate. “[Investors] should understand that the island may not protect their safety as well as it does their assets,” he said.