What Are the Requirements of Act 60 Puerto Rico?

Act 60 Puerto Rico requires the legal conditions that individuals and businesses should meet to for the tax incentive. Act 60 is considered as the Puerto Rico Incentives Code which is attracting entrepreneurs, investors, and high-income professionals in 2026. 

Applicants for Act 60 should establish bona fide residency in Puerto Rico and maintain ongoing compliance with residency, tax, and reporting rules.

Act 60 Puerto Rico Requirements 

To qualify as an Individual Resident Investor under Act 60 in 2026, you must:

• Become a bona fide resident of Puerto Rico

• Spend at least 183 days per year in Puerto Rico

• Establish your tax home in Puerto Rico

• Show a closer connection to Puerto Rico than any other location

• Maintain a primary residence in Puerto Rico

• Make required annual charitable contributions

• Apply for and maintain an Act 60 tax decree

Download my Act 60 Puerto Rico Tax Incentive Ebook to understand residency rules, tax strategy, and the best luxury areas to consider.

Bona Fide Residency Requirement:

The most important Act 60 requirement is getting bona fide residency under IRS rules. You must satisfy all three tests below.

1. Physical Presence Test

Most applicants qualify by spending 183 or more days per year in Puerto Rico. Alternative day-count formulas exist but are rarely used by investors. Serious Act 60 participants typically relocate full-time to make compliance simple. Many choose established luxury areas where long-term living is comfortable and secure.

2. Tax Home Test

Your primary place of business and economic activity must move to Puerto Rico. This usually means:

• Main office or business operations in Puerto Rico

• Primary income-producing activities based on the island

• Professional services performed from Puerto Rico

• No primary tax home remaining in the mainland U.S.

3. Closer Connection Test

You must demonstrate stronger personal and economic ties to Puerto Rico than to any other location. Common proof includes:

• Primary home in Puerto Rico

• Puerto Rico driver’s license

• Puerto Rico voter registration

• Local bank accounts

• Family relocation

• Local memberships and community involvement

Primary Residence Requirement Under Act 60

Act 60 requires you to maintain a primary residence in Puerto Rico. Most qualified investors choose to:

• Purchase a luxury home

• Buy a high-end condo

• Sign a long-term residential lease

Why Many Act 60 Investors Choose to Buy

High-net-worth relocators often prefer ownership because it:

• Strengthens bona fide residency evidence

• Demonstrates long-term commitment

• Builds equity in a supply-constrained market

• Supports lifestyle relocation

• Reduces future housing uncertainty
  
  

Annual Charitable Contribution Requirement (2026)

Act 60 participants must make annual donations to qualified Puerto Rico nonprofit organizations.

Typical Structure

Most Individual Resident Investors must:

• Make a minimum annual charitable donation

• Provide proof of donation each year

• Maintain compliance as part of decree obligations
  
  

Act 60 Application Process:

To receive benefits, you must apply for and obtain an Act 60 tax decree from the Puerto Rico government.

Basic Application Steps

1. Submit online application

2. Pay government filing fees

3. Provide background information

4. Complete compliance documentation

5. Await decree approval

6. Relocate and maintain residency

Real Estate Strategy for Act 60 Investors

Housing decisions play a major role in successful Act 60 relocation.

Why Dorado Beach Attracts Act 60 Buyers

Dorado Beach remains one of the most sought-after locations because it offers:

• Ultra-luxury gated communities

• Ritz-Carlton Reserve lifestyle

• Strong privacy and security

• Proximity to San Juan

• Limited high-end inventory

• Long-term value stability
  
  

For investors planning full relocation, owning in an established luxury enclave often simplifies compliance and improves lifestyle quality. Investors exploring the island’s broader opportunity often review Puerto Rico’s tax incentives for luxury real estate and tourism investments to understand how government programs are shaping long-term demand. Browse current Dorado Beach homes for sale to evaluate available luxury properties.

Ongoing Compliance Requirements

Qualifying for Act 60 is not a one-time event. You must maintain compliance every year.

Annual Obligations

• Meet the 183-day presence rule

• Maintain Puerto Rico tax home

• File required Puerto Rico tax returns

• Submit annual reports if required

• Complete charitable donations

• Preserve closer connection evidence

Mistakes That Can Disqualify Act 60 Applicants

Avoid these critical errors:

• Spending fewer than 183 days in Puerto Rico

• Keeping stronger ties to the mainland U.S.

• Failing the tax home test

• Weak documentation of relocation

• Missing annual donation requirements

• Treating Puerto Rico as a part-time tax strategy

The IRS and Puerto Rico authorities both expect genuine relocation.

Is Act 60 Worth It in 2026?

For qualified high-income individuals and export service business owners, Act 60 can still provide significant tax advantages in 2026. However, the program works best for those prepared to:

• Relocate full-time

• Establish real presence

• Maintain strict compliance

• Invest in long-term Puerto Rico residency

Many serious applicants combine their tax strategy with luxury real estate ownership in premier communities. If you are seriously evaluating relocation under Act 60, you can schedule a consultation with me to avoid costly mistakes and identify the right luxury property strategy. I work with mainland buyers and high-income investors exploring Dorado Beach and other premier Puerto Rico communities.

Frequently Asked Questions (FAQ)

How many days must you live in Puerto Rico for Act 60?

Most applicants must spend at least 183 days per year in Puerto Rico to meet the physical presence test.

Do you have to buy a house for Act 60?

No, purchasing property is not required. However, you must maintain a primary residence in Puerto Rico, and many investors choose to buy for stronger residency positioning.

Can you work remotely under Act 60?

Yes, many export service business owners operate remotely from Puerto Rico, provided their tax home and business activities are properly structured.

What is the biggest requirement for Act 60?

The most critical requirement is becoming and remaining a bona fide resident of Puerto Rico under IRS rules.

Where do most Act 60 investors live?

Many high-income relocators prefer established luxury areas with strong infrastructure and security. Premium communities such as Dorado Beach consistently attract serious buyers evaluating long-term relocation.