Education & Training
The Labor Department also offers incentives in the form of wage subsidies. The Puerto Rico Human Resources & Occupational Development Council (HRODC) administers funds received by Puerto Rico under the federal Workforce Investment Act (WIA). The Workforce Investment Act of 1998 (WIA; P.L. 105-220) is the primary federal program that supports workforce development activities, including job search assistance, career development, and job training.
The Workforce Investment Act includes incentives such as:
- Up to 50% of the salary of on-the-job training participants
- Up to 50% of the salary of participants in customized training
- 100% of training costs and up to 50% of the participants salary for combined training programs
- 100% of the cost of retraining employees to handle new tasks and up to 50% of the salary of the participant's during the retraining period
Contact us to learn more about Education & Training Incentives.
Puerto Rico has the largest noncontiguous Foreign Trade Zone (FTZ) system in the United States. The system allows companies to obtain significant financial savings, since raw material, components, and packaging can be transported tax-free throughout these zones and items shipped abroad after processing are exempt from U.S. taxes.
Some benefits of operating in FTZs include:
- Deferment of federal customs duties
- Deferment of Puerto Rico excise taxes
- 100% exemption on Municipal License Taxes on exports outside the United States
- 100% exemption on tangible property and equipment used
- 60% exemption on the value of the property that is designated intangible
- 100% exemption on exports from the zone and sub-zones
Contact us to learn more about incentives for foreign trade zones.
Research & Development
Puerto Rico is paving its path to create a knowledge-based district that will position the Island at the forefront of the science, technology and R&D industries. To materialize this, Puerto Rico has laid out a series of unique economic and tax advantages to attract top-tier talent and companies to the Island.
- Eligible researchers/scientist residing in Puerto Rico can receive a tax exemption of up to $195,000 on income generated from qualified federal research grants or up to $250,000 if the research is conducted within the Science District
- Firms can receive a 50% tax credit for eligible investments in research and development, clinical trials, toxicology test, and any other qualified intangible property
- Scientific or industrial R&D laboratories pay a fixed 4% corporate income tax rate
- 0 to 1% income tax rate for “Pioneer” Activities
- Puerto Rico-based firms providing export services such as: environmental, technological, scientific, information technology or engineering consulting services pay a 4 % corporate income tax rate or a 3% corporate tax rate if 90% or more of its gross income comes from the export of services.
- Combined floor of 3% for local business
- 25% credit for purchase of locally manufactured products
- Up to 10% credit for industrial energy consumption
- Special deductions for investments in structures, machinery and equipment
- Infrastructure incentives
- Statutory relief for personal and real-estate property tax, as well as municipal excise tax
- Training incentives
- Competitive financing options
- Unique tax exemption for qualified R&D scientists transferring to Puerto Rico
Contact us to learn more about incentives for Research & Development.
Puerto Rico is particularly attractive to companies looking to invest in alternate energy sources. As a result, the Government of Puerto Rico approved two legislative projects on energy policy and programs. This legislation aims to diversify energy sources, ensuring the Island’s energy source remains affordable, viable and sustainable.
"Energy Diversification by means of Sustainable and Alternative Renewable Energy Act" - (Act No. 82 of 2010)
- Creates the first-ever Renewable Portfolio Standard in Puerto Rico
- Promotes a generation of renewable energy, with compulsory short, medium, and long term goals:
- 12% renewable energy production by 2015
- 15% by 2020
- Requirement for retail energy providers to establish plans to reach 20% renewable energy production by 2035
- Creates Renewable Energy Certificates (RECs) to make the financing of industrial-scale renewable energy projects feasible
"Green Energy Incentives Act" - (Act No. 83 of 2010)
- Creates a Green Energy Fund (GEF)
- Offers incentives for the next generation of Green energy
- Creates a new industry and frees citizens and businesses from dependence on fossil fuels for energy production
- Incentives became effective July 2011. These will include:
- Residential and Small Businesses
- Up to 60% rebate on installation costs of renewable energy equipment
- Commercial and Industrial
- Up to 50% rebate on installation costs of renewable energy equipment
- Utility scale
- Access to a Renewable Energy Certificate (REC) market
Contact us to learn more about Energy incentives.