Law 60

Incentives and Investments

The Incentives and Investments Division plays a central role in the economic development of Puerto Rico, through the administration of incentives that promote investment in tourism activities that stimulate the economy and the creation of jobs, among others.

This entails advising on incentives for tourism developments, under the applicable laws and regulations, such as Chapter V or the Visitor's Economy in Act No. 60-2019.

Anyone who is interested in establishing new incentives should direct said procedure through the Secretary of the DDEC so that he analyzes the impact of such incentives based on the Return on Investment (ROI) formula.

Return on Investment or ROI — Is the financial index that measures and compares the benefit or utility of an incentive in relation to the investment made by the Government of Puerto Rico. In addition, it measures the profitability of each government incentive and its ability to recover, and exceed that value to the treasury.

Law No. 22-2016, as amended, empowers the Electric Power Authority (PREPA) to grant a credit of up to 11% on the electric power bill. This benefit is available for Hotels and Paradores with more than 15 endorsed rooms, and that obtain the CTPR certification. (the application is filed with the CTPR);

Tax Exemptions and Credits under Act 60-2019;

Visitor Economy, Law No. 60-2019

  • Reduce the high construction and operating costs of tourist businesses in Puerto Rico.
  • Take action to reduce energy costs, through the different alternatives of renewable sources.
  • Provides for 15 years of tax exemptions, renewable for an additional 15 years.

Who Qualifies:

  • Hotels, Condohotels, Paradores, Bed and Breakfasts, Guest House, Vacation Clubs (Time Shares), Tourist Marina, Golf Courses in Hotels.
  • Other facilities or activities, such as: Medical Tourism, Sustainable Tourism, Natural Resources, Nautical Tourism, Casinos, Agro-hostels, Theme Parks, and facilities that, due to their special attraction, are a stimulus to internal or external tourism.
  • ESports activities and Fantasy Leagues.

Incentives

The amount of cash that has been contributed to an Exempt Business to be used in a Tourist Activity, in exchange for:

  • Shares in the corporation, of this being a corporation;
  • Participation or increase in participation in a partnership or joint venture, of this being a partnership or joint venture; or
  • A unit in a Condohotel.

Tax Credits

Tax credits are instruments of value that are used against income taxes and can be sold on the stock market as if it were a bond or a stock. Its value can range from 80 cents to 95 cents on the dollar. It is used to repay debt or to defray the total cost of the project.

Exemptions

The Law grants the following five (5) exemptions:

  • Overall, up to 4%
  • Vieques and Culebra up to 2% the first 5 years
  • New Business - Tourism Activity Starts
  • Existing Business - Starts with the proper filing of the application

For information, please contact 787-721-2400, x-2063.

Selection of Projects

The process established by the Incentive Regulations for the selection of projects may, without being understood as a limitation, include the following criteria:

  • The order of receipt of complete applications and that comply with all the established requirements.
  • The availability of funds and financial commitments already achieved with Investors that demonstrate the financial viability of the project.
  • The permits already obtained to start the project or the proposed activity that demonstrate the regulatory viability of the project.
  • The level of Tax Credit requested as a percentage of the investment or corresponding expense.
  • The return on investment of the Tax Credit, as a primary criterion and essential, as well as the contribution of the company to the Government of Puerto Rico and the multiplier effect on jobs and income of the activity to be encouraged.
  • The purchase of Manufactured Products.

It is located in the Single Business Portal of the Department of Economic Development:

  • Meeting that establishes the beginning of the date of the Total Cost of the Project;
  • The development of the Tourist Activity is conceptually explained;
  • Information on investors, project financing, estimated total cost, jobs, business operator, estimated date of commencement of construction, and income projections for the first year of operation must be submitted.
  • Charges
  • After you receive the Pre-Application letter, you have 18 months to file an Application.

Contact

To coordinate services or inquiries:

Tel. (787) 721-2400

Extensions:

Planning, Sustainable Tourism and Nautical Tourism: 2063 or 2067

Tourism Quality and Educational Affairs: 2089

Incentives: 2207

Download the pdf
Law 60