On January 17, 2012 Puerto Rico’s government enacted the Act No. 20 of 2012, also known as the “Export Services Act” to offer the necessary elements to create a World Class Service Center by providing tax credits and tax exemptions to business engaged in eligible activities in Puerto Rico.
Puerto Rico has a highly educated and professional labor force that can fulfill the labor market demands for the provision of export services.
The purpose of the Export Services Act (Act 20) is to develop Puerto Rico as an international export services center and diversify the drivers of economic growth by encouraging local service providers to expand their services to persons outside of Puerto Rico, and attract new businesses to Puerto Rico.
The Export Services Act applies with respect to any business with an office located in Puerto Rico that is engaged in the exportation of services to non-resident individuals and/or foreign entities.
BUSINESS SERVICES ELEGIBLE TO BENEFIT UNDER ACT NO. 20:
- Advertising and public relations
- Call centers
- Development of licensable computer software
- Distribution centers (hubs)
- Economic, environmental, technological, managerial, marketing, information systems, engineering and other consulting services
- Electronic data processing centers
- Headquarters and/or shared services centers
- Medical and hospital services
- Professional services, such as legal, tax and accounting
- Research and development
INVESTMENT BANKING AND FINANCIAL SERVICES TAX BENEFITS UNDER ACT NO. 20:
- 4% maximum tax rate on income related to exportation of services
- 100% exemption on income tax rate on dividends or profit distributions
- 60% exemption on municipal license taxes
- 90% exemption of real and property taxes
- 20-year tax decree, renewable for an additional 10-year period