For many U.S. investors, Puerto Rico has become an attractive destination to establish their business due to its tax and geographic advantages. If you are interested in establishing a business in Puerto Rico, here is a useful guide to help you in the process.
1) Understanding Tax Incentives
The government of Puerto Rico has established a tax regime that offers incentives to companies that establish operations on the island. The most attractive incentive is Act 60 of 2019, also known as the Puerto Rico Incentives Act, which offers tax breaks for companies that meet certain criteria. These incentives include a 4% corporate tax rate, a dividend and capital gains tax exemption for businesses on the island, and a federal income tax exemption for U.S. citizens residing in Puerto Rico.
2) Choosing the type of company
There are several types of companies that can be established in Puerto Rico, including limited liability companies (LLC), corporations, limited partnerships, and single-member limited liability companies (SRL). The choice of company type will depend on factors such as company size, legal liability, ownership structure and tax strategy.
3) Registering the company
To register a company in Puerto Rico, the registration process must be completed with the Puerto Rico Department of State. The registration process includes the submission of the company’s articles of incorporation, the names and addresses of the members and managers, as well as the payment of the corresponding registration fees.
4) Obtaining a tax identification number
To establish a company in Puerto Rico, a tax identification number is required, which can be obtained through the Puerto Rico Treasury Department. The tax identification number is necessary to conduct business transactions and to file tax returns.
5) Opening a Bank Account
After obtaining the tax identification number, a bank account must be opened in Puerto Rico for the company. The bank account will be needed to conduct business transactions and to pay taxes.
6) Obtaining licenses and permits
Depending on the type of business, additional licenses and permits may be required to operate in Puerto Rico. It is important to verify the specific requirements of the industry and the municipality where the company will be established.
7) Hiring personnel
The next step is to hire personnel. Puerto Rico has a highly skilled and bilingual workforce. It is important to comply with Puerto Rico’s labor laws, which include minimum wage requirements, employee benefits, and work schedules.
8) Establish a physical presence
Once all of the above steps have been completed, a physical presence in Puerto Rico can be established. This may include acquiring or leasing property, constructing a building, or acquiring equipment and supplies.
In summary, establishing a business in Puerto Rico can offer many tax and geographical advantages. With this guide, you will be able to have a clear idea of the steps necessary to establish a company in Puerto Rico.
In addition, it is important to seek advice from highly qualified personnel specialized in corporate law and taxation in Puerto Rico to ensure that all the necessary legal and tax requirements are met. They can also help you maximize tax incentives and reduce tax costs for your company.
If you are interested in establishing a company in Puerto Rico and need advice, do not hesitate to contact our team at Gierbolini Consulting Group. We are at your disposal to answer all your questions and help you make the best decisions for your business.
To schedule an appointment, please call the number listed on our website or send an email to our contact address. We will be sure to respond to your request as soon as possible and look forward to working with you!bookkeeper