Act 60 - 2019
The "Puerto Rico Incentives Code" is commonly known as Act 60 and is referred to as such both in and out of the Commonwealth of Puerto Rico. Number 60 is the number of the enacted bill (H.B. 1635) when it was passed by the Puerto Rico Legislature on July 1, 2019 (No. 60-2019).
Puerto Rico has a long history of granting incentives, including tax exemptions, to create well paid jobs and stimulate outside investment in the communities, both of which are vital and core to their economic development strategy.
The purpose of the Incentives Code is to foster the appropriate environment and opportunities as well as to provide the tools to promote Puerto Rico’s sustainable economic development.
The Problem
The Puerto Rico Department of Economic Development & Commerce (DEDC) determined there were approximately seventy-six (76) laws or programs that promoted investment through the granting of incentives, which were managed and granted through various different government agencies. Because so many incentives were created over so many years across so many different economic sectors, the opportunity cost was too great, alignment across the government was too poor, and the administration of the disparate incentives was too inefficient.
The Solution
The purpose of Act 60 was to consolidate the approximately 76 laws or programs that were promoted through various government agencies by rethinking the entire economic incentives systems and processes of granting and managing incentives.
This new approach helps to establish the legal and administrative framework to harmonize the incentive terms and provisions, to streamline the application and grant approval or denial process, and establish measurable indicators for the evaluation of the incentives economic performance for continuous improvement. This alignment under Act 60 allows Puerto Rico to effectively and efficiently further the sustainability of its economic development vision.
Providing stability, certainty, and credibility across the entire economic development spectrum is essential for the promotion and continued growth & success of investment in Puerto Rico.
The Result
The Puerto Rico Incentives Code consolidated over 76 incentive laws under a single harmonized Code known as Act 60. Under the new Incentives Code the prior exemptions, which were grouped under various industry segments and sectors, are now grouped together under Categories of Incentives, as follows:
- Individuals
- Export (Goods and Services)
- Financial and Insurance Services
- Visitor Economy
- Manufacturing, including Research and Development
- Infrastructure
- Agriculture
- Creative Industries
- Entrepreneurship
- Other
Act 60 is a key component in providing the stability, certainty, and credibility across the entire economic development spectrum which is essential for the promotion, continued growth, and success of economic development and investment in Puerto Rico.
While previous incentives, such as Act 20 for Export Services and Act 22 for Individual Investors, are now known as Act 60 that does NOT mean they have been combined or merged into a single incentive under the same exemption decree. Much of the third party information found online and in the media has erroneously conflated the two previous incentives under Act 60 creating much confusion.
Overview of Act 60 By Subtitles
Act 60 Preamble
Adoption of Act 60 as New Incentives Code * Statement of Motives * Governing Principles of the Incentives Code * Formation of Incentives Office * Bill of Rights for Decree Holders and its Shareholders
Sections 1000.01 - 1000.04
General Provisions (Subtitle A)
Declaration of Public Policy * Definitions: General * Individuals * Goods and Services Export * Finance, Investment, & Insurance * Visitor Economy * Manufacturing * Green Energy * Agro-Industry * Creative Industry * Other Industries * Job Creation ($3 M year)
Sections 1010.01 - 1030.01
Economic Development Incentives (Subtitle B)
General Provisions * Small to Medium Businesses * Individuals * Export of Goods & Services * Finance Investment & Insurance * Visitor Economy * Manufacture * Infrastructure & Green Energy * Agro * Creative * Entrepreneurship * Other
Sections 2011.01 - 2110.03
Cash Grants or Tax Credits (Subtitle C)
Cash Grants or Tax Credits * Visitor Economy * Manufacturing * Research & Development * Creative * Agriculture
Sections 3000.01 - 3050.01
Subsidies and Other Programs (Subtitle D)
Agricultural worker Wage Subsidy Program
Sections 4010.01 - 4010.02
Funds for the Granting of Benefits (Subtitle E)
Economic Development Funds * Economic Incentives Fund * Incentive for the Development of the Puerto Rico Film Industry
Sections 5010.01 - 5010.03
Administrative Provisions (Subtitle F)
Incentives Office * Applications * Investigations * Admin Review * Procedures * Annual Report * Applicable to Specific Subtitles
Sections 6011.01 - 6070.72
