Act 22 aims to attract new bona fide residents to Puerto Rico, who did not live in Puerto Rico between January 2006 and January 2017, by providing a 0% local income tax rate on Puerto Rico-derived interest and dividend income and a total tax exemption on all capital gains, regardless of the source of gain. Founders benefit through both a 0% tax obligation on dividends received from their Puerto Rico-based company and a total tax exemption for capital gains at times of exit.
Act 135, or the Young Entrepreneurs Act, helps enable young adults within the ages of 16 to 35 to start companies in Puerto Rico. The subsections of this Act grants a 100% tax exemption on both personal and corporate income for individuals (from ages 16 to 26 making under $40,000) and new business (from ages 16 to 35 who own businesses with revenues of up to $500,000 annually).
