The Multiple Advantages of the Puerto Rico Act 20

Puerto Rico Act 20 is a special act that was created to provide tax incentives for American companies who wish to operate in Puerto Rico. The act has helped create jobs, increased revenue, and it will help the economy grow for years to come. This blog post discusses the multiple benefits of this act. So if you are interested in learning more about how it can benefit your company, please continue reading!

What is the Puerto Rico Act 20?

The Puerto Rico Act 20, also known as the Puerto Rico Economic Incentives Act of 1995, is a special act created by the government of Puerto Rico in an effort to promote economic growth. The purpose of this tax incentive program is to encourage American companies. Who is looking for new opportunities outside the United States mainland to consider relocating their business operations and headquarters on one or more islands within the commonwealth?

This act was implemented specifically because at that time there were very few incentives offered by the majority of states in America. So it became necessary for local governments like those found throughout the state of Florida, New York, and Texas among others begin offering benefits packages. Such as these to attract businesses from other places around the world. Which would otherwise choose not to relocate those businesses to the mainland.

Benefit of Rico Act 20

One of the main benefits of the Puerto Rico Act 20 is that it offers generous tax incentives. Companies who operate in Puerto Rico under this act can enjoy a reduced income tax rate of just four percent. This is much lower than the standard corporate tax rate in the United States, which is currently 35%. In addition, companies who qualify for Act 20 are also exempt from paying taxes on dividends and profits generated from the sale of products and services outside of Puerto Rico. This exemption can be extremely beneficial. As it allows companies to keep more money in their pockets, which they can then use to grow their business.

Another advantage of the Puerto Rico Act 20 is that it helps create jobs. By providing tax incentives to businesses, the act encourages them to expand their operations in Puerto Rico. This leads to the creation of new jobs that will help boost the local economy and increase revenue for businesses.


The Multiple Advantages of the Puerto Rico Act 20 are numerous. It’s an attractive option for medical tourism, retirement, and business relocation, among other possibilities. But not only is it a great opportunity to save on taxes.  You can also take advantage of the many incentives available in Puerto Rico. Such as tax credits and exemptions that will help your bottom line tremendously!

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