Treasure Island: Puerto Rico Bids To Become New Age Tax Haven

Forbes

Lauren Debter

Article

1 Pages

Forbes examines Puerto Rico’s effort to attract wealthy investors and businesses through unusually favorable tax incentives. The article explores how 0% taxes on certain investment income challenged traditional assumptions about offshore tax havens and raised questions about whether tax driven migration could help revive a struggling economy.

Key Takeaways

Zero Tax Incentives: New Puerto Rico residents could qualify for a 0% tax rate on certain capital gains, dividends, and interest income under Act 22.
Corporate Tax Advantage: Act 20 offered qualifying export service businesses a 4% corporate tax rate, far below the 39.6% top U.S. federal income tax rate at the time.
Economic Revival Bet: Puerto Rico had roughly twice Connecticut’s unemployment rate and about one third its median household income, motivating policymakers to pursue investor friendly reforms.
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