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Residency pathway · Puerto Rico

Move to Puerto Rico.
Leave federal tax.
Keep your passport.

Puerto Rico is US territory: a bona fide resident excludes Puerto Rico-source income from federal tax under IRC §933, and an Act 60 decree can bring Puerto Rico tax on investment income to zero — without renouncing citizenship. MoveToPuertoRico walks you through the actual rules — the 183-day presence test, the tax-home and closer-connection tests, the Act 60 decree chapters, the donation and home-purchase conditions and the filing calendar — so you arrive with a plan, not a podcast take.

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Official thresholds / Vetted local lawyers / Exit Global review
Your residency file, organisedExample
My residency file🔒
🌍 Home country🇵🇷 Puerto Rico

One destination. One organised file.

Every document the authority will ask for, in order.
Example checklist3 of 4 added
🛂
Passport + photosValidity checked against the rule
✓
📜
Police clearance, apostilledFrom every country of recent residence
✓
🏦
Proof of funds / incomeMatched to the category threshold
✓
🩺
Health coverAdd it when available
PENDING
Know what you have. See what's next.Less guesswork. Fewer rejected files.
At a glance

Puerto Rico in four numbers

Figures are quoted from the official pages linked on each card. Checked 8 September 2026.

Federal tax on PR-source income
0%

IRC §933 excludes Puerto Rico-source income of a bona fide resident from US gross income. US-source income stays federally taxable.

Official source ↗
Presence to be bona fide resident
183 days

Main test: at least 183 days in Puerto Rico in the tax year, plus no tax home outside the island and no closer connection to the US or a foreign country.

Official source ↗
Act 60 investor decree
0% to 31 Dec 2035

Full Puerto Rico exemption on interest, dividends and post-move capital gains for an Individual Resident Investor, for the exemption period ending 31 December 2035.

Official source ↗
Annual decree charity
$10,000

Minimum yearly donation to Puerto Rico non-profits, split as DDEC Circular Letter 2026-001 prescribes, plus a home purchase within 2 years.

Official source ↗
Why people choose Puerto Rico

The honest case.
And who it isn't for.

No destination is right for everyone. These are the reasons people actually choose Puerto Rico — and the situations where we would tell you to look elsewhere.

The only exit from federal tax that keeps the US passport

A US citizen cannot escape federal income tax by moving to Panama or Dubai; citizenship-based taxation follows them. Puerto Rico is the exception written into the Internal Revenue Code: a bona fide resident excludes Puerto Rico-source income under §933, and Act 60 lets Puerto Rico tax that income at 0% or 4%. No renunciation, no exit tax, no visa.

A published, rules-based decree system

Act 60-2019 (the Incentives Code) sets out the benefits, the conditions and the fees in statute. DDEC issues decrees through an online portal, publishes annual-report deadlines, and in April 2025 ordered its Office of Business Incentives to expedite decree processing. You are dealing with a written code, not discretion.

Dollar, FDIC banks, US courts, no customs line

The currency is the US dollar, deposits sit in FDIC-insured banks, contracts run under a US federal court system, domestic flights need no passport, and Social Security and Medicare continue. English and Spanish are both official languages.

Probably not the right fit if…
  • Anyone who will not actually live there — the IRS presence test is 183 days in Puerto Rico in the year, backed by tax home and closer-connection tests, and Form 8898 tells the IRS you have moved. Weekend visits do not qualify.
  • People whose wealth is already-appreciated positions they plan to sell soon — gain that accrued before the move is not exempt: it is US-source for federal purposes if sold within 10 years of moving, and Puerto Rico taxes it at 5% only after 10 years of residence.
  • Salaried employees of stateside or foreign employers who want a 0% rate — the investor decree covers interest, dividends and gains, not wages; salary is taxed by Hacienda at rates that reach 33%.
An independent preparation tool. Not a government body. Residency is granted only by the Department of Economic Development and Commerce (DDEC) and Hacienda. Private beta.
01 / The routes that exist

The residency pathways

For US citizens and green-card holders there is no immigration step — Puerto Rico is the United States. The 'pathways' are the federal bona fide residence test that ends federal tax on Puerto Rico-source income, and the Act 60 decrees that set the Puerto Rico rate. Non-US citizens need US immigration status first. Figures are from the Incentives Code as published by the Puerto Rico Office of Management and Budget and from DDEC and IRS pages.

Bona fide residence (IRC §937) — the foundation

Every US citizen or resident who wants Puerto Rico-source income out of the federal net; no decree needed for this step.

  • Presence test: at least 183 days in Puerto Rico in the tax year — or 549 days over the current and prior two years with at least 60 days each year — or no more than 90 days in the US — or US earned income of no more than $3,000 with more days in Puerto Rico than the US — or no significant connection to the US
  • Tax home test: no tax home (regular or main place of business or employment) outside Puerto Rico during any part of the year
  • Closer connection test: no closer connection to the US or a foreign country than to Puerto Rico — permanent home, family, cars, voting, banking and licences all count
  • Form 8898 to the IRS for the year you become a bona fide resident if worldwide gross income exceeds $75,000; filed by the Form 1040 due date (not with the return); penalty $1,000 if missed
  • Year-of-move relief: in the first year you can qualify if you have no outside tax home or closer connection during the last 183 days of the year
Timeline / validity: Effective from the first tax year you meet all three tests; Puerto Rico-source income is excluded under §933 from that year
Official source ↗

Act 60 Individual Resident Investor decree (Chapter 2)

Investors, founders with post-move liquidity events, and traders — anyone whose income is interest, dividends and capital gains rather than salary.

  • Must not have been a resident of Puerto Rico between 17 January 2006 and 17 January 2012 (the Code's definition of Resident Individual Investor) and must become a resident before the exemption period ends on 31 December 2035
  • 100% Puerto Rico exemption on interest and dividends earned after becoming resident, and on long-term capital gains that accrue after the move and are recognised before 1 January 2036; gain accrued before the move is taxed at 5% if recognised after 10 years of residence, otherwise at the ordinary Puerto Rico rate
  • Annual donation of at least $10,000 to Puerto Rico non-profits: $5,000 to entities on the Legislature's childhood-poverty list, at least $2,500 to the Special Fund for Social Equality, the balance to other qualifying non-profits (or 100% to the childhood-poverty list) — evidenced each year in the annual report
  • Purchase of a principal residence in Puerto Rico within 2 years of the decree, as sole owner or with a spouse, from an unrelated party (Code §6020.10)
  • Fees set by the Code: application filing fee, a $5,000 acceptance fee once the decree is approved, and a $300 annual-report fee — confirm the current schedule on the DDEC incentives portal before paying
Timeline / validity: Decree runs to 31 December 2035 under the Code as published; a 2025 legislative proposal to extend new decrees to 2055 at a 4% rate had not been confirmed as enacted on official sources as of 8 September 2026 — we verify status for every file
Official source ↗

Act 60 Export Services decree (Chapter 3)

Consultants, developers, fund managers, agencies and other service businesses that operate from Puerto Rico for clients outside it.

  • Fixed Puerto Rico income tax of 4% on export-services income of the exempt business
  • 100% exemption on dividends paid out of that income to Puerto Rico residents
  • 75% exemption from property tax and 50% from municipal licence tax on the exempt business
  • At least one full-time employee once the business's volume exceeds $3,000,000; the service must be rendered to clients outside Puerto Rico with no nexus to the island
  • Annual exempt-business report (IANE) to DDEC — 2024 reports were due 15 May 2025 for individual operators and by 15 July or 15 November 2025 for entities, with a $105 extension fee
Timeline / validity: 15-year decree, renewable for a further 15 years
Official source ↗

Young Entrepreneurs decree (Decreto Joven Empresario)

Founders aged 16 to 35 starting a brand-new business in Puerto Rico.

  • Applicant aged 16 to 35, signing a Special Agreement with DDEC for a business that has not operated before, including through affiliates
  • 100% exemption on the first $500,000 of net taxable income
  • 100% exemption from personal property tax and municipal taxes during the benefit period
  • Cannot be combined with other tax incentives; one new business per entrepreneur; applied for through the DDEC incentives portal with ID, diplomas and incorporation certificate
  • Decree acceptance fee $55 (waived at DDEC's in-person 'La Red' acceptance events per Bulletin 2025-010)
Timeline / validity: 3 years from the start of operations
Official source ↗

Non-US citizens: US immigration first

Canadians, Britons, Europeans and others without US citizenship or a green card.

  • Puerto Rico is inside the US immigration system — you need a US immigrant or non-immigrant status from USCIS or a US consulate before any of the above applies; Act 60 decrees confer no immigration right
  • Once lawfully resident, the same §937 bona fide residence tests and the same Act 60 decree conditions apply to you
  • Green-card holders are US tax residents worldwide; the §933 exclusion is what removes Puerto Rico-source income from that
  • US naturalisation, if wanted, follows the general USCIS rules for permanent residents
Timeline / validity: Depends entirely on the US immigration category; the decree itself has no immigration timeline
Official source ↗
The $497 residency-file review

Build the file once.
Pay a lawyer to file — not to chase paper.

You gather the documents; we check the file against the current DDEC decree requirements and the IRS bona fide residence test, then hand you to a vetted Puerto Rico CPA or attorney for filing. Exit Global is an independent advisory team, not a government body — decrees are granted only by DDEC, and your tax status is determined only by Hacienda and the IRS.

$497one-time, per applicant file
Start the process →
What the $497 covers.

A category check against the current official requirements, a document-by-document review of your file, and a warm handover to a vetted local lawyer or licensed agent who files it. Their fees and government fees are separate and quoted up front.

Your information is sensitive. We treat it that way.

Documents are stored privately when you explicitly save them. We use restricted access and do not sell or share your information.

Your tax position once resident

Two tax authorities, one island: what Hacienda taxes, what the IRS still sees.

Puerto Rico taxes its residents on worldwide income under its own Internal Revenue Code (2011), administered by Hacienda; a resident is a person domiciled in Puerto Rico, presumed after 183 days of presence in the calendar year. The federal position is separate: under IRC §933 a bona fide resident excludes Puerto Rico-source income from US gross income, while US-source and foreign-source income stay on the federal return. The Act 60 decree then sets the Puerto Rico rate on the excluded income — 0% for investor income, 4% for export services.

Official source ↗
  • Federal: §933 excludes Puerto Rico-source income (interest, dividends, gains on Puerto Rico assets, income from a Puerto Rico business) of a bona fide resident. US-source income — a stateside rental, a US employer's salary for work performed in the US, US government pay — is still federally taxed. Self-employment tax and FICA/Medicare continue to apply.
  • Bona fide residence is the 183-day presence test plus the tax-home and closer-connection tests; Form 8898 notifies the IRS of the change for the year you move if worldwide gross income exceeds $75,000 ($1,000 penalty if omitted). The IRS runs a compliance campaign on Act 22/60 decree holders — keep a day log and the closer-connection evidence.
  • Puerto Rico rates without a decree: 0% up to $9,000, 7% to $25,000, 14% to $41,500, 25% to $61,500 and 33% above, plus a gradual adjustment at the top and an alternate basic tax; long-term capital gains carry a preferential 15% rate. The return (Form 482) is due 15 April.
  • With an Individual Resident Investor decree: 0% Puerto Rico tax on interest, dividends and long-term gains accrued after the move and recognised before 1 January 2036. Gain that accrued before you moved is not exempt: Puerto Rico charges 5% only if you sell after 10 years of residence, and federally the pre-move appreciation on property sold within 10 years of the move is treated as US-source. Crypto and securities follow the same source-and-timing logic.
  • Pensions and salary: a decree does not touch wages, business income or pensions; these are taxed by Hacienda at the ordinary scale (or at 4% inside an Export Services entity for qualifying service income). US Social Security benefits remain federally taxable to the extent they are US-source.
  • No wealth tax in Puerto Rico; sales and use tax (IVU) is 11.5%; municipal property tax is collected by CRIM on a historic assessed value. For most US citizens the federal estate and gift tax regime continues to follow them after the move — plan the estate separately from the income-tax decree.

Residency here is only half the move. Your old country has to agree you left.

Find your Exit site →

Exit Global's review is an advisory opinion, not a determination by any tax authority.

02 / Step by step

From decision to decree in hand

The order matters: apostilles and police certificates expire, and most authorities want everything dated within a few months of filing.

01

Decide the structure and the timing

Investor decree, Export Services entity, Young Entrepreneur, or plain bona fide residence without a decree — and, critically, when: the 10-year clock on pre-move appreciation and the year-of-move presence rule both start from the date you actually relocate. We model the split between pre- and post-move gain before you file anything.

02

Apply on the DDEC incentives portal

Create an account on the Single Business Portal, file the decree application through incentives.ddec.pr.gov with identification, a criminal background certificate, sworn statements and the filing fee. A Puerto Rico CPA or attorney usually prepares the file; DDEC's April 2025 administrative order directs the Office of Business Incentives to expedite decree processing.

03

Move, and build the closer-connection file

Take a lease or buy, move family and belongings, get a Puerto Rico driver's licence, register to vote, open the local bank account, move doctors and memberships, and start the day count. Bona fide residence is decided on facts, so document every one from day one.

04

Accept the decree and meet its conditions

Sign and accept the decree, pay the $5,000 acceptance fee, buy the principal residence within 2 years, and make the $10,000 annual donation in the prescribed split — the childhood-poverty list, the Special Fund for Social Equality and other qualifying non-profits — keeping the receipts.

05

File with both authorities

Form 8898 to the IRS by the Form 1040 due date for the year of the move (separately from the return); Form 482 to Hacienda by 15 April; the annual exempt-business report (IANE) to DDEC by its published deadline — 15 May for individual investors in 2025 — with the $300 fee and donation evidence.

06

Close the loop where you came from

US citizens: end your state tax residency (California, New York and others run their own domicile tests). Non-US citizens: finish the old-country exit file — see the Exit sites. Then keep the records that prove 183 days a year in Puerto Rico for as long as the decree runs.

03 / Living there

Living there: the practical facts

The things people ask us after the paperwork: money, health, language and a roof.

Banking

Accounts are in US dollars at FDIC-insured Puerto Rico banks and at branches of stateside institutions; a Social Security number and a Puerto Rico address open most doors. Puerto Rico also licenses International Financial Entities for non-resident business. Expect the same KYC as the mainland, plus questions about the decree.

Healthcare

No residency permit or decree requires health insurance, and Medicare covers eligible residents on the island. Private and employer plans are the norm for working-age movers; the largest hospitals are in the San Juan metro area, and many residents keep a stateside plan or evacuation cover for complex care and hurricane season.

Language & daily life

Spanish and English are both official; government forms, Hacienda instructions and DDEC circulars are largely in Spanish, and daily life outside San Juan, Dorado and the tourist coast runs in Spanish. Power and water reliability, hurricane preparedness and traffic are the practical complaints, not bureaucracy.

Property

Decree holders must buy a principal residence within 2 years, so budget for it. Title and notarial deeds follow Puerto Rico civil-law practice; annual municipal property tax is billed by CRIM on a historic assessed value; hurricane and flood insurance are priced into ownership. Renting first is common while the closer-connection file is built.

Where are you leaving from?

Each departure has
its own rules.

Getting a card in Puerto Rico does not end tax residency where you came from. Pick your departure country to see its residency test, exit tax and departure filings.

🇨🇦 Exit Canada🇺🇸 Exit USA🐻 Exit California🗽 Exit New York🇬🇧 Exit the UK🇮🇪 Exit Ireland🇫🇷 Exit France🇧🇪 Exit Belgium🇳🇱 Exit Netherlands🇪🇸 Exit Spain🇮🇹 Exit Italy🇩🇰 Exit Denmark🇳🇴 Exit Norway🇸🇪 Exit Sweden🇦🇺 Exit Australia🇿🇦 Exit South Africa🇩🇪 Exit Germany🇦🇹 Exit Austria🇫🇮 Exit Finland🇧🇷 Exit Brazil🇯🇵 Exit Japan🇮🇱 Exit Israel🇳🇿 Exit New Zealand🇵🇹 Exit Portugal🇰🇷 Exit South Korea🇦🇷 Exit Argentina🇮🇳 Exit India🇨🇭 Exit Switzerland
Good questions. Clear answers.

Before you
get started.

Answers reflect the official rules as checked on 8 September 2026.

Do I have to live in Puerto Rico full-time?

Most of the time, yes. The main presence test is at least 183 days in Puerto Rico in the tax year; the alternatives (549 days over three years, no more than 90 days in the US, or no significant US connection) are narrower than they look. On top of that you must have no tax home outside Puerto Rico and no closer connection to the US or a foreign country. A house in Florida you still call home, a stateside office, kids in school on the mainland — each one weakens the file.

How is tax residency triggered?

Twice over. Puerto Rico treats you as a resident if you are domiciled there, presumed after 183 days in the calendar year, and taxes worldwide income at its own rates. Federally, you are a bona fide resident once you meet the presence, tax-home and closer-connection tests of IRC §937 — and only then does §933 remove Puerto Rico-source income from your federal return. You tell the IRS you have moved on Form 8898.

Can my family come?

For US citizens and green-card holders, of course — there is no immigration step. A spouse who wants decree benefits on their own investment income applies for their own decree; the $10,000 donation and the home-purchase condition are per decree. Family location is also a closer-connection factor: a spouse and children living on the mainland undermines your own residence claim.

Is there a path to citizenship or a second passport?

You already have it — Puerto Rico residents are US citizens and the passport is the US passport. Non-US citizens do not get citizenship through Puerto Rico; they follow the standard US immigration route (a green card, then naturalisation under USCIS rules). Nothing in Act 60 shortens that.

What does it cost in government fees?

For an Individual Resident Investor decree: the application filing fee, a $5,000 acceptance fee when the decree is approved, a $300 annual-report fee, and the $10,000 minimum annual donation for as long as the decree runs. A Young Entrepreneur decree carries a $55 acceptance fee. DDEC's IANE extension fee is $105. There is no federal fee for Form 8898, but the penalty for not filing it is $1,000. Confirm the live schedule on the DDEC incentives portal — regulations add processing charges.

Do I need a lawyer?

DDEC does not require one, but almost every decree file is prepared by a Puerto Rico CPA or attorney, and the federal side — source-of-income analysis, the 10-year rule on pre-move gains, Form 8898 — needs a US tax professional. Our $497 review checks the file and the timing before it goes to the local professional, so you pay for filing, not for fixing.

Can I keep working remotely for a foreign or stateside employer?

Yes, but the salary is not what the investor decree exempts. Compensation for services performed in Puerto Rico is Puerto Rico-source: excluded federally under §933, taxed by Hacienda at up to 33%, with FICA still due. Work physically performed on the mainland is US-source and stays federally taxable. Consultants who bill outside clients from an entity in Puerto Rico can seek an Export Services decree at 4% instead.

What about my old country's tax residency?

For US citizens the 'old country' is usually a state — California, New York and others apply their own domicile tests and do not care about Act 60. For everyone else, becoming a Puerto Rico resident does not end tax residency where you came from. Use the relevant Exit site — see exitglobal.app.

The next chapter starts with a plan

Arrive in Puerto Rico with a file
the authority will accept.

Start my residency file — $497 →

MoveToPuertoRico · part of the Exit Global network

The Exit network

One process. Every country.

Each site covers one departure, in that country's own rules. The destination sites cover where you're going. All reviewed by the same team at Exit Global.

Leaving
🌐Exit GlobalPortfolio home🇨🇦Exit CanadaNR73 + departure file🇺🇸Exit USAExpatriation + Form 8854🐻Exit CaliforniaFTB residency🗽Exit New YorkDomicile + statutory residency🇬🇧Exit the UKStatutory Residence Test🇮🇪Exit IrelandOrdinary residence tail🇫🇷Exit FranceArt. 167 bis exit tax🇧🇪Exit BelgiumSpecial departure return🇳🇱Exit NetherlandsM-form + conserverende aanslag🇪🇸Exit SpainArt. 95 bis + quarantine rule🇮🇹Exit ItalyAIRE + black-list presumption🇩🇰Exit DenmarkFraflytterskat🇳🇴Exit NorwayUtflyttingsskatt🇸🇪Exit SwedenTen-year share rule🇦🇺Exit AustraliaCGT event I1🇿🇦Exit South AfricaSection 9H exit charge🇩🇪Exit Germany§ 6 AStG Wegzugsbesteuerung🇦🇹Exit Austria§ 27 (6) Wegzugsbesteuerung🇫🇮Exit FinlandThree-year rule🇧🇷Exit BrazilSaída definitiva🇯🇵Exit JapanExit tax on ¥100m+ assets🇮🇱Exit IsraelCentre of life + s.100A🇳🇿Exit New Zealand325-day rule + IR886🇵🇹Exit PortugalArt. 16 CIRS residency🇰🇷Exit South KoreaExit tax on large shareholders🇦🇷Exit ArgentinaPérdida de residencia + baja🇮🇳Exit IndiaSection 6 residency + RNOR🇨🇭Exit SwitzerlandWegzug + pension withholding
Arriving
🇵🇦Move to PanamaTerritorial tax, Friendly Nations🇦🇪Move to DubaiNo personal income tax🇲🇹Move to MaltaRemittance basis, EU🇨🇾Move to Cyprus60-day rule, non-dom🇵🇾Move to ParaguayTerritorial tax, fast residency🇺🇾Move to UruguayTax holiday for new residents🇨🇷Move to Costa RicaTerritorial tax🇧🇸Move to BahamasNo income tax🇵🇹Move to PortugalD7, D8, Golden Visa, IFICI🇹🇭Move to ThailandLTR visa, remittance basis🇲🇾Move to MalaysiaMM2H, territorial tax🇮🇩Move to IndonesiaSecond Home visa, Bali🇬🇪Move to GeorgiaForeign income exempt, 1% SBS🇵🇷Move to Puerto RicoAct 60 for US citizens🇮🇹Move to ItalyFlat tax, 7% pensioner regime🇬🇷Move to GreeceGolden Visa, non-dom flat tax🇭🇰Move to Hong KongTerritorial, no CGT🇸🇬Move to SingaporeForeign income exempt, no CGT