The Lowest Effective Corporate Income Tax

Puerto Rico provides unparalleled value that no other location can match.
It is a United States community with a foreign tax structure. Here you can enjoy the benefits and protections of operating within a U.S. jurisdiction with the added tax benefits of operating under a Controlled Foreign Corporation (CFC) structure. Profits from sales to the US mainland are free from U.S. taxation and goods enter the U.S. market duty-free. In addition, Puerto Rico offers a highly attractive incentives package that includes 100% exemption from multiple taxes; special treatment for pioneer industries and much more.

With a 7% maximum tax rate, tax deductions and exemptions, cash grants, and a financial environment with scores of financing options, Puerto Rico eases the financial burden of your company, making it the perfect place for profits and growth. The government of the Commonwealth of Puerto Rico is committed to supporting this pro-business view by offering a wealth of incentives and favorable tax laws combined with cash grants, tax credits, and venture capital initiatives, further enhancing your bottom line.

Maximize your profits with these and other incentives:

7% maximum corporate income tax rate with some qualified companies paying as little as 2 %. 2-0 % special corporate tax rate for “Pioneer Industries” A 200 % super-deduction for research and development and job training costs. Accelerated depreciation for investment in buildings, machinery and equipment with unlimited loss carry forwards. 100 % deduction on real and personal property taxes during initial construction and first-year of operations. The opportunity to conduct business in the most comprehensive, noncontiguous Foreign Trade Zone system in the U.S.

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The Controlled Foreign Corporation (CFC) Investment Model

There’s more than one way to look at your operations in Puerto Rico. The CFC investment model is one that offers particular benefits and higher returns to both U.S. companies establishing CFCs and previously existing CFCs. There are three different models that you can follow, to maximize the advantages offered by Puerto Rico’s tax benefits.

Sample Model:

U.S. Parent Company Investment Model

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More Tax Incentives

Credits:

Credit for purchases of locally manufactured goods Stockholder tax credit of 30% of the tax paid by the exempt business commensurate to its participation in the ownership of the exempt business. 4% one-time tax on capital gains derived from sales of stock of exempted businesses. Credit of 50% of the investment in the a acquisition of an exempt business in the process of closing operations in Puerto Rico Special Deductions: Deduction of 15% of production payroll to manufacturers whose industrial development income is less than $30,000 per production employee. A super-deduction of up to 200% for the cost of employee training and R&D expenses

Foreign Trade Zone Advantages:

Puerto Rico has the most comprehensive, non-contiguous Free Trade Zone system in the USA. The system will allow companies to obtain significant financial savings opportunities, since raw material, components, finished goods and packaging may be storaged in and transported tax free through these zones. Items shipped abroad after processing are exempt from taxes.

Benefits of the FTZ in Puerto Rico include:

Deferred US customs duties No US custom duties and Puerto Rico excise tax payments on products exported to foreign markets

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Financing Options:

The public and private sectors in Puerto Rico have joined forces to make locating or expanding your business in Puerto Rico financially attractive. Private and government banks provide long-term or low-interest loans for new businesses locating here. In addition, financing is available from a variety of sources.

Take a look at the following alternatives:

The Government Development Bank of Puerto Rico (GDB) makes long-term and large loans to the private sector. The Puerto Rico Economic Development Bank loans or guarantees loans up to $1.5 million and also invests in qualified high-risk projects. AFICA sells Puerto Rico tax-exempt industrial development bonds to provide low-cost financing to some projects. The Special Fund for Economic Development provides for economic development in specific scientific and technical research, risk sharing programs for new small businesses and managing tax-exempt businesses. Venture Capital initiatives promote venture capital financing for growing companies.

For more information on Tax & Business Incentives Programs visit:
http://www.pridco.com