To qualify as an Act 60 Individual Resident Investor, you must not have been a Puerto Rico resident between January 17, 2006 and January 17, 2012. If you apply in 2027 or later, you also must not have lived in Puerto Rico in the six years before you move. You must clear DDEC's background check. Once you hold a decree, it asks for the same things every year: stay a bona fide resident, file an annual report with DDEC, donate at least $10,000 to eligible Puerto Rico nonprofits, and own and keep your primary residence on the island. The benefits apply only while the decree stands.
Getting in: who is eligible
Requirement | Filed by December 31, 2026 | Filed on or after January 1, 2027 |
|---|---|---|
No Puerto Rico residency between January 17, 2006 and January 17, 2012 | Required | Required |
No Puerto Rico residency in the six years before moving | Not required | Required |
Become a Puerto Rico resident no later than the tax year ending December 31, 2055 | Required | Required |
Criminal record report and DDEC background check | Required | Required |
Two details are easy to miss. First, the law excludes people whose home never really left Puerto Rico: students studying off the island who lived here before, government personnel temporarily working elsewhere, and people in similar situations. The statute treats their domicile as Puerto Rico the whole time. Second, the 2006–2012 window applies to everyone, not just 2026 filers. The six-year lookback is added on top for 2027 filers. The background check, covered in Post 2, can end an application on its own. DDEC treats convictions for financial crimes, or a pattern of criminal behavior, as grounds to dismiss or deny.
Staying in: what a decree asks every year
1. Remain a bona fide resident. Every year, not just the first. The IRS tests in Post 4 apply annually.
2. File the annual report with DDEC. Decree holders file an annual exempt-business report, known by its Spanish initials as the IANE. It's where you prove the next two items.
3. Donate at least $10,000 a year to eligible Puerto Rico nonprofits. DDEC's January 2026 circular spells out how the money must be split:
- $5,000 to nonprofits working to eradicate child poverty that appear on the annual list published by the Legislature's Special Joint Commission.
- At least $2,500 to the Special Fund for Social Equality, paid by check to Puerto Rico's Secretary of the Treasury (Hacienda) and delivered to the commission that administers it. DDEC requires the fund's contribution certificate starting with 2026.
- The remaining $2,500 to other eligible Puerto Rico nonprofits.
None of it can go to an organization controlled by you, your spouse, your direct-line relatives (parents, grandparents, children, grandchildren) or your business partners. Confirm with counsel which tax year your first donation is due. And note that a bill filed in the Puerto Rico House has proposed doubling the minimum to $20,000. DDEC's current guidance sets $10,000; check the bill's status before you budget.
4. Buy and keep your primary residence. Within two years of obtaining the decree, you must buy a home in Puerto Rico from an unrelated seller, make it your principal residence, and certify in each annual report that you still hold it. Post 7 covers this requirement in detail.
5. File your returns. Generally that means Puerto Rico income tax returns as well as your federal filings, including Form 8898 in the year your residency begins.
Why the annual items matter
The statute grants the 0% and 4% rates only while the decree has not been revoked. And the paperwork is being checked. A local business publication reported that DDEC had audited 1,798 incentive decrees of all kinds in 2025 as of October. A 2024 investigation by Puerto Rico's Center for Investigative Journalism found investor donations recorded to generic or unidentified recipients, and some to a for-profit organization.
One practical habit comes straight from DDEC's circular. The child-poverty list is republished each year, and organizations come off it. DDEC says it won't penalize a donation made to an organization that was on the list in effect on the day you gave, even if it was later removed. So save a copy of the current list with each donation receipt.
Where I fit: the residence requirement is an annual one
Most people think of the home purchase as a one-time box to check. It isn't. You certify every year that you still own the home and that it's your principal residence, and DDEC's circular allows the municipal principal-residence tax exemption certificate as supporting proof. Getting the purchase right at the start — the right seller, the right structure, a home you'll genuinely live in — makes every annual report simpler. That's the part I help with; Post 7 goes through it.