Protecting hard-earned wealth comes down to implementing strategies that deliver. It’s all important to those really serious about holding on to their assets.
In this regard, Puerto Rico has a unique advantage. Under Act 60 the island constitutes a legal and jurisdictional escape from capital gains tax and other heavy-handed levies. This is not the stupid tax advice amateurs are selling.
Act 60 is a very sophisticated framework if people have the foresight to use it as it was meant to be. So, this is what you need to know to understand how to approach it correctly.
The Strategic Advantage Behind Act 60
This isn’t your average tax break. Basically, it’s the plan to attract the serious players of the world: investors, entrepreneurs, and business owners willing to use Puerto Rico’s legal autonomy for unparalleled financial advantage.
It’s a practice rooted in law. Act 60 consolidates the benefits from previous Acts 20 and 22 to cut through typical jurisdictional red tape. For those who qualify, it offers:
- 0% Capital Gains Tax: Taxes on gains after relocation should be eliminated.
- 4% Business Income Tax: By far the most competitive of almost any other jurisdiction.
- Property Tax Exemptions: That can include up to 75% off state property tax, 50% off municipal taxes.
- 0% Tax on Dividends and Interest: Treated as completely tax-free passive income.
This is how you maintain control and dominance.
Puerto Rico’s Tax System Works How
Puerto Rico isn’t a state and it isn’t a foreign country, either. It exists in an exceedingly rare middle ground; you retain U.S. citizenship, yet you get access to tax laws better than the competition. Unlike offshore havens that require you to renounce U.S. citizenship, Puerto Rico lets you have your cake and eat it, too.
This isn’t a simple switch, however. To avail of these merits Puerto Rico has to become your tax home in every meaningful way. Signing up for residency isn’t enough, as you also need to ensure that your financial and personal interests align with those of the jurisdiction. Anything less invites scrutiny and risk.
This Is How You Can Get Act 60
Act 60 is for people who can move deliberately and completely. You have to satisfy rigorous criteria in residence, financial relationships, and compliance to qualify. Trial and error are not appropriate here.
Residential Requirements:
- Live in Puerto Rico 183+ days annually.
- Alternatively, use the 549-day rule: divide time in Puerto Rico across three years with at least 60 days per year.
- Name Puerto Rico as your main home and cut all contacts with other countries.
Relocate Financial and Social Ties:
- Bring your family, company, and banking to Puerto Rico.
- Show “closer ties” to Puerto Rico than to anyplace else.
Property and Business Commitments:
- Create a local business entity, if relevant.
- Two years later, buy a house and mark it as your main residence.
Required Annual Donations:
- Give $10,000 yearly to neighborhood NGOs, at least half of which will help projects addressing child poverty.
Bottom line, if you do this haphazardly, you run the danger of missing vital factors and could potentially derail the whole thing.
Why Precision Matters
Access to Act 60 is successful only if you present absolute precision and expertise. Why? Because such cases are scrutinized by the IRS closely. Failure of the “closer connections” test or failing to understand in advance how gains are treated pre-relocation could trigger audits, penalties, or worse.
At Dominion, we’ve seen it all: Poorly executed plans, an advisor who doesn’t understand the rules, and clients left to clean up messes that shouldn’t exist. That’s not how we operate.
With every element of your residency, financial ties, and compliance through Act 60, we take full responsibility to ensure you are guided through perfectly. There’s no room for error because we don’t leave any.
Act 60 represents an opportunity for those who want absolute control of their financial destiny. You won’t find shortcuts, but you won’t find generic advice, either. We approach it deliberately, meticulously, and unrelenting in our desire to protect what’s yours.
With high stakes, there’s no middle ground. That’s the Dominion standard.
The Capital Gains Advantage
The U.S. vigorously taxes one of the most aggressively treated forms of income: capital gains. When it comes to substantial assets – cryptocurrency, stocks, real estate, you name it – the federal government happily takes its share.
Act 60 changes the game. By moving to Puerto Rico, you’re eliminating that obstacle. Any gains realized post-relocation are tax-free.
Here’s what that looks like in real terms: Federal taxes in the U.S. on a $1 million capital gain? Over $200,000. So, we’re competing against that opportunity under Act 60, and that $200,000 should remain right where it is: in your portfolio. This is a major plus, one that can be transformative to those who trade a lot.
Act 60 Applicants Must Consider the Following Elements from a Strategic Perspective
Proper execution of Act 60 involves getting every detail right every single time, from timing your move to how your finances should be structured from a long-term compliance viewpoint. The process isn’t something you leave to chance.
Timing Is Everything
If you established bona fide residency in Puerto Rico and derive capital gain after that date, Act 60 applies. If you made gains prior to moving, U.S. tax rules apply. This makes timing critical.
This process can translate into selling and buying assets post-relocation to ensure maximum efficiency from a tax point of view for many. If you are not doing anything less, you are missing out on serious money.
Long-Term Commitments
This isn’t a short-term play. Act 60 rewards those who commit to the Puerto Rico tax framework for the long term. Benefits like a possibility of 5% reduction of capital gains tax over 10 years’ time only confirm the need for its integration into Puerto Rico’s tax and legal system. The problem is that those who don’t plan for this permanence are asking for trouble.
Tackling IRS Scrutiny
Act 60 participants don’t fly under the radar with the IRS. Failing the physical presence test, falling short of residency requirements, having connections to other jurisdictions – these are all things that attract audits, back taxes, penalties, and interest. There is no guesswork here. Expertise is essential.
Misconceptions about Act 60
A lot of HNWIs and UHNWIs tackle Act 60 with a limited understanding of how it works and what it requires. And many times, this limited understanding is the byproduct of advisors who are equally limited in their own understanding of Act 60’s basic principles. So let’s clear up two common myths:
- Myth: Just owning property in Puerto Rico is enough to qualify.
- Fact: Property ownership is only part of residency. You need physical presence, relocation of financial ties, and rigorous compliance.
- Myth: Act 60 benefits are retroactive.
- Fact: Gains must be realized only after relocation. It’s a costly mistake to assume otherwise.
Act 60 is a mechanism for the people serious about a sound, long-term strategy of wealth governance. Is that you?
Act 60 Has Long-Term Value
If you’re just trying to pick up some quick wins, Act 60 is not for you. It’s a framework meant to last. At a time when everyone else is trying desperately to keep pace with volatile tax laws and economic upheaval, those committed to Act 60 have already established their position.
Multigenerational Wealth Planning
For families that are looking for a way to continue wealth across multiple generations, Act 60 possesses an edge that cannot be matched. Free of capital gains tax means that as assets grow – in real estate, business, or investments – you won’t find the usual drains on growth imposed by other jurisdictions.
Some structure their wealth the right way under Act 60 so they’re untouchable, whereas some see their portfolios erode away.
Business Growth Potential
The system of relocating under Act 60 relies in large part on our being able to gain leverage. Corporate tax rates are as low as 4%. And with property and municipal taxes exempt for businesses, now is the time to reinvest savings into growth and innovation, into hiring. The result? A great advantage for those who choose a jurisdiction that values opportunity over bureaucracy.
It’s a Barrier Against Future Tax Increases
The landscape of international tax is getting more aggressive. It has a degree of predictability seldom found elsewhere. Those who act now are securing their future with benefits guaranteed through 2035.
Act 60 isn’t relief but a declaration. You will not be held down by external forces in terms of your wealth and it will be kept and grown on your terms.
Your Strategy Demands Expertise and Precision
Act 60 is an extraordinary opportunity, but it’s not for amateurs. It’s important to be as exact as possible when setting up registration, changing banking links, or making sure of compliance. Making mistakes costs money and puts you at needless risk.
Instead, at Dominion, we don’t work on trial and error. Our role is simple: to protect your wealth – permanently. Act 60 is only one tool; it is NOT a standalone solution; it is a piece of a framework of wealth governance. We deploy every tool in our arsenal to put you in the best possible position – to be compliant and unassailable.
If you’re ready to tackle Act 60 like it is meant to be – with precision, expertise and total confidence – give us a call. Anything less simply won’t do.
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