Relocating to Puerto Rico offers far more than beautiful beaches and year-round tropical weather. For U.S. entrepreneurs, investors, and high-net-worth individuals, Act 60 has become one of the island's most compelling advantages, providing significant tax incentives while supporting long-term wealth preservation.
Understanding how Act 60 works requires careful planning and compliance with both Puerto Rico and U.S. tax regulations. From establishing residency to selecting the right property, every decision plays an important role in maximizing the program's benefits.
At Westside Puerto Rico, we help buyers understand how real estate supports a successful relocation strategy, connecting clients with the resources they need to confidently establish their new life on the island.
What Is Act 60?
Officially known as Puerto Rico's Incentives Code, Act 60 combines several economic incentive programs into one comprehensive framework designed to attract new residents, entrepreneurs, and businesses to Puerto Rico.
Eligible participants may benefit from:
- 0% tax on qualifying capital gains earned after becoming a Puerto Rico resident
- 0% tax on qualifying Puerto Rico-sourced dividend income
- Corporate tax rates as low as 4% for qualifying export service businesses
- Favorable estate and wealth planning opportunities
These benefits apply only after establishing bona fide residency and maintaining ongoing compliance with program requirements.
Who May Qualify for Act 60?
Act 60 is intended for individuals who relocate to Puerto Rico and establish the island as their primary residence.
Common qualifying applicants include:
- Business owners and entrepreneurs
- Investors and active traders
- Cryptocurrency investors
- Consultants and professional service providers
- Remote executives and professionals
- Companies serving clients outside Puerto Rico
Applicants must demonstrate that Puerto Rico has become their primary tax home rather than a secondary residence.
The Three Residency Requirements
To qualify under Act 60, individuals must satisfy three primary residency tests established under U.S. tax law.
- Physical Presence Test: Spend at least 183 days each year in Puerto Rico or meet an alternative qualifying day-count formula.
- Tax Home Test: Establish Puerto Rico as your principal place of business where management and business activities are conducted.
- Closer Connection Test: Maintain stronger personal, financial, and social ties to Puerto Rico than to any location on the U.S. mainland.
Meeting all three requirements is essential for maintaining eligibility under the program.
The Role of Real Estate in Your Relocation
Although purchasing a home is not legally required under Act 60, establishing a permanent residence in Puerto Rico is often an important part of demonstrating bona fide residency.
Many relocating buyers prioritize properties that offer:
- Luxury primary residences
- Private gated communities
- Beachfront or resort-style living
- Convenient access to golf courses, marinas, schools, and business districts
Selecting the right property not only supports residency requirements but also enhances long-term lifestyle and investment objectives.
Common Mistakes to Avoid
Many applicants encounter challenges because they underestimate the importance of proper planning and ongoing compliance.
Common mistakes include:
- Purchasing property before fully understanding residency requirements
- Failing to spend sufficient time on the island each year
- Maintaining stronger personal connections to the mainland United States
- Improperly classifying or sourcing income
- Not coordinating legal, tax, and real estate professionals throughout the relocation process
A comprehensive relocation strategy can help minimize these risks while supporting long-term compliance.
Understanding the Application Process
Applying for Act 60 generally involves several important steps.
- Submit an application through Puerto Rico's Department of Economic Development and Commerce.
- Complete background checks and required compliance disclosures.
- Receive approval and an official tax incentive decree.
- Maintain annual reporting and ongoing compliance requirements.
Processing times vary depending on each applicant's circumstances and documentation.
How Westside Puerto Rico Supports Act 60 Buyers
Relocating under Act 60 involves much more than purchasing a property. A successful transition often requires coordination between experienced real estate, legal, and tax professionals.
Our clients benefit from guidance that includes:
- Luxury neighborhood and property selection
- Introductions to experienced Act 60 legal and tax professionals
- Residency-focused home purchasing strategies
- Long-term investment planning support
- Relocation assistance before and after closing
Our goal is to help buyers establish a seamless transition while supporting both their lifestyle and investment objectives.
Is Act 60 Still Worth Considering?
Puerto Rico continues to offer one of the most attractive tax incentive programs available to qualifying U.S. citizens. As compliance standards continue to evolve, proper planning and professional guidance have become increasingly important.
For buyers who establish residency correctly, Act 60 can provide meaningful long-term financial benefits while offering access to Puerto Rico's exceptional quality of life.
Act 60 offers a unique opportunity for eligible individuals seeking to combine tax efficiency with luxury island living. Success, however, depends on careful planning, full compliance, and selecting the right location to support both residency requirements and personal goals.
At Westside Puerto Rico, we help buyers navigate every stage of the relocation process, connecting them with exceptional properties and trusted professionals to make their move to Puerto Rico both rewarding and well-informed.
