Sovereign Man examines whether Puerto Rico’s aggressive tax incentives can transform the island into a Caribbean version of Singapore or whether mounting fiscal stress makes it resemble Greece. The paper highlights 0% taxes on certain investment gains and a 4% corporate rate, while questioning whether those benefits can survive a deepening debt crisis.
Puerto Rico: A Guide to the next Singapore… or the next Greece?
Sovereign Man
Research
19 Pages
Key Takeaways
Aggressive Tax Incentives: Act 22 offers 0% tax on qualifying future capital gains, while Act 20 allows eligible export service businesses to pay just a 4% corporate tax rate.
Strict Residency Requirements: Individuals generally must spend at least 183 days annually in Puerto Rico, while qualifying businesses must perform 80% of payroll related work on the island.
Significant Fiscal Risks: Banks held liquidity equal to only 8.3% of deposits and system equity of 11.5% of assets, while mortgage delinquencies reached 16% in 2013.
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