Doing business in the Puerto Rico & U.S. Virgin Islands District (2024)

FAQs

Do I need a business license in the Virgin Islands? ›

Every business operating in the U.S. Virgin Islands must obtain a business license from the Department of Licensing and Consumer Affairs (DLCA). Ensure that you have all the necessary certifications, clearances, and permits before submitting your business license application.

Every limited liability company is required to maintain in Puerto Rico a registered office and a resident agent, who can be an individual resident in Puerto Rico, a domestic corporation, or a foreign corporation authorized to do business in Puerto Rico.

With a diverse and talented workforce, tax benefits and incentives, robust infrastructure and more, Puerto Rico has positioned itself as a destination where businesses thrive. Explore the top reasons why and how Puerto Rico enables the success of your entrepreneurial vision.

According to the PR Department of Economic Development and Commerce, anyone doing business in Puerto Rico—including sole proprietors—must obtain a Merchant's Registry Certificate from the PR Treasury Department. There are other licenses and permits many Puerto Rico businesses also need.

If you are a bona fide resident of the US Virgin Islands, you will need to file a US Virgin Island tax return with the Virgin Islands Bureau of Internal Revenue instead of the IRS.

A USVI corporation pays an effective tax rate of approximately 23.1% on its eligible income, and with the 90% tax credit, the effective rate is 2.31%. (Salaries and other forms of compensation, such as guaranteed payments, are fully taxable.)

A Puerto Rico LLC taxed as a Corporation of Individuals is taxed as a pass-through entity and doesn't pay corporate income tax, making it similar to a partnership. However, unlike a partnership, a corporation of individuals can make distributions to its members that aren't subject to US self-employment taxes.

Puerto Rico's Act 60 promotes investment in Puerto Rico through tax incentives. These tax benefits include zero tax on passive income, including capital gains, dividends, and interest. Other tax benefits from Act 60 include: 2-4% corporate tax.

In the case of a non-resident foreign corporation, a 29% withholding tax (WHT) rate is applicable on its Puerto Rico-source gross income not effectively connected with a Puerto Rico trade or business.

Manufacturing is the largest economic sector of the island; composing almost half (about 46%) of its gross domestic product (GDP) through more than 2,000 manufacturing plants scattered throughout the island.

Why are the rich moving to Puerto Rico? ›

The answer lies in Puerto Rico's unique financial incentives and generous tax breaks. No federal income tax on passive income is one such perk attracting high net worth individuals to this tropical paradise. This means if you're making money from investments or rental properties – it remains untouched by Uncle Sam.

As a protected U.S. Territory, Puerto Rico offers unique benefits to its corporation including: no U.S. taxes for selling products in the U.S., duty free importing of products from the U.S., low corporate tax rates, real estate and personal property taxes are exempt during the first year, one shareholder can form a ...

Capital gains generated in Puerto Rico are entirely tax-exempt, which can be a significant advantage for investors and entrepreneurs. Interest and royalty income derived from Puerto Rico is exempt from taxation, making it an attractive location for intellectual property and financial services companies.

Puerto Rico LLC Cost. The initial cost to start an LLC in Puerto Rico is $250 to register your business with the Department of State. After that, you'll have a yearly recurring cost of $150 for your Annual Fee, which keeps your LLC current with the state.

To form your LLC in Puerto Rico, you'll file a Certificate of Formation with the Puerto Rico Department of State and pay a $250 filing fee. We'll show you everything you need to set up your Puerto Rico LLC and keep it maintained in this guide.

Tax Status An EC is exempt from all US Virgin Islands income, gross receipts, withholding taxes and licence requirements. In addition, ECs do not pay tax on US Virgin Islands source income such as interest and dividends. Interest paid to creditors by an EC is also not subject to withholding tax.

U.S. citizens do not need a passport when entering the U.S. Virgin Islands, according to the official U.S. Virgin Islands passport requirements, but you may be required to show proof of citizenship (raised-seal birth certificate and valid government-issued ID card such as a driver's license) when departing the U.S. ...

Obtain a Federal Employer Identification Number (EIN) from the Internal Revenue Service. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Website: ltg.gov.vi/departments/corporations-trademarks.