On May 1st of 2016, Kate and I moved our business and life from sunny San Diego to sunnier (and rainier) Puerto Rico.
Puerto Rico is a US territory, meaning you do not need a passport to travel here.
The main reason we made the move was Act 20/22 and the tax benefits they offer.
A quick summation: If you move your business and yourself to Puerto Rico and spend more than half the year here, your business pays a flat 4% corporate tax rate, total. No state tax, no federal tax. For those interested in learning more, Google ‘Act 20 Puerto Rico’ and watch this video.
It took us 18 months from the date of our application to receive the Act 20 Decree (Act 22 took about 10 months). It is real, but it is also a process. We have friends who moved here recently who are benefitting from a much smoother and faster process and received their Act 20 in 4 months.
The good news is it’s retroactive to the date you move to Puerto Rico, so we have been paying 4% taxes since May 1st 2016.
You do have to pay yourself a ‘reasonable’ salary as well which will be taxed at 33%, but the rest of your income will be taxed at 4%.
Our first two months on the island were spent on the western side in a town called Quebradillas.
It was an enjoyable two months and we explored the west side of the island.
While exploring the east coast, we found ‘Palmas Del Mar’ in the town of Humacao and knew we had found home.
After a day exploring the homes for sale, we found our dream home.
This community is full of successful and adventurous Entrepreneurs and we’ve made great friends and enjoyed much of what this tropical paradise has to offer.
If I could go back in time knowing what I know now, I would make the same decision to move to Puerto Rico.
Here is a great resource guide put together by Heidi DeCoux, a Palmas Del mar resident.
Like anywhere, it’s not all sunshine and rainbows, and there are some cons that anyone moving to Puerto Rico should be aware of.
- The roads are in rough shape. Potholes are common and drivers are very poor.
- Power outages happen a few times a month, sometimes more often. We have a generator so there is very little disruption in our lives, but it can still be frustrating.
- Even in our gated community with its own security force, there have been several break-ins.
- I can’t honestly say I feel un-safe, but as an Army Officer and Combat Veteran, I know to not let my guard down and to remain vigilant.
- English is a distant second language. Even though Puerto Ricans begin learning English in Kindergarten and continue through 12th grade, few retain the language. It’s one reason we moved to Palmas Del Mar, where English is the language of choice.
- Hurricanes are always a possibility; Hurricane Maria devastated the island and at the time you are reading this Palmas Del Mar is close to 100% back to pre-hurricane Maria, but many parts of the island (especially inland) have years of struggle ahead.
Of course, there are also many pros to living in Puerto Rico.
- It’s an adventure to live on a tropical island.
- The tax benefits under Act 20 and 22 are amazing.
- The people that make the move to Puerto Rico are incredible. Adventurous, successful, and fun are just a few of the adjectives that come to mind.
- The feeling of community in Palmas Del Mar is strong. We are on the dark side of the moon in some ways, and that gives residents the sense of a tribal family.
- We are 45 minutes southeast of San Juan, so we are close enough to a major city/airport, but at the same time far enough away.
- Because PR is a US territory, you don’t need a passport to get here, and we have the major stores we have come to know and love in the states like Costco, HomeDepot, Marshalls, etc.
- Palmas Del Mar is also very kid-friendly, with a K – 12 academy right in the community.
- Palmas Del Mar also boasts a gold club with 2 great golf courses (designed by Chi Chi Rodriguez), a tennis club with 20 tennis courses, a beach club, 17 restaurants, and a Plaza with a bank, barber, mail facility, market, and other nice to haves.
If you are interested in checking out real estate in Palmas Del Mar, you can’t beat Ricky and Liz, an amazing husband and wife team. Tell them JLD sent you and they’ll be extra nice ;-).
Overall, if you are adventurous, willing to put up with “3rd world frustrations”, and are in a situation where Act 20/22 would be financially game-changing for you (as it is for us), then it’s time to call Puerto Rico home sweet home!