How to Apply for Act 60 in Puerto Rico: A Step-by-Step Guide

What Is the Act 60 Application Process?

Applying for an Act 60 decree is a formal government process managed by Puerto Rico's Office of Industrial Tax Exemption (OITE). The process involves preparing a detailed application, paying filing fees, and waiting for review and approval. Here is what to expect at each step.

Step 1: Determine Which Decree You Need

Before applying, confirm which Chapter applies to your situation:

• Chapter 2 (Individual Investor): For individuals seeking 0% capital gains and dividend tax. Requires genuine Puerto Rico residency of 183+ days/year.
• Chapter 3 (Export Services): For businesses exporting services from Puerto Rico. Requires a Puerto Rico-organized entity with real operations.
• Combination: Many applicants pursue both simultaneously.

Step 2: Establish Puerto Rico Residency First

You should not file for a decree before genuinely beginning to establish Puerto Rico residency. The decree is not retroactive, and OITE expects applicants to be in the process of genuine relocation. Move to Puerto Rico, open bank accounts, obtain a Puerto Rico driver's license, and begin building your documentation file before or concurrent with the application.

Step 3: Gather Required Documents

The application requires various supporting documents, which typically include:

• Copy of your passport and/or Puerto Rico ID
• Certificate of Negative Criminal Record
• Statement of your investment or business activities
• Description of services (for Chapter 3)
• Evidence of Puerto Rico presence (lease agreements, utility bills, bank statements)
• Letter of introduction and personal background

Step 4: Submit the Application and Pay Fees

Chapter 2 individual applications carry a filing fee of approximately $750–$1,000. Chapter 3 business applications carry higher fees, typically $5,000+. Applications are submitted electronically through Puerto Rico's Incentives Management System (SIMS).

Step 5: Wait for OITE Review

Review typically takes 60–120 days. OITE may request additional documentation or clarification during this period. You should be prepared to respond promptly. Do not make major financial decisions (especially asset sales) in reliance on your decree until it has been officially issued.

Step 6: Sign and Maintain Your Decree

Once approved, you sign the decree, which sets out your tax benefits and ongoing obligations. Key ongoing requirements include:

• Annual report filing with OITE
• Annual fee payment ($300/year)
• $10,000 charitable donation (Chapter 2 only)
• Continued 183+ day presence in Puerto Rico
• Purchasing residential property within 2 years (Chapter 2)

I-Taxplan assists clients with Act 60 applications, pre-move planning, and ongoing compliance. Learn about our Act 60 services →