Finance & Insurance

A Place to Develop and Scale

Global Financial Services Thrive in Our Entrepreneurial Environment

Puerto Rico is the only U.S. jurisdiction that offers international financial and banking entities (IFEs and IBEs) the legal, regulatory, and intellectual property protections of the United States. With an IFE license, an entity can enjoy the following tax benefits:

fixed income tax rate

on income generated from a permitted transaction

100%

tax exemption on taxes from distributions

(made by an IFE to a foreign shareholder)

100%

tax exemption

on property taxes and gross receipt taxes levied by municipalities

Mature Financial and Insurance Industries Offer Dynamic Growth

Puerto Rico supports finance and insurance businesses with sophisticated banking tools, mobile financial applications, blockchain, and payment processing technology, ingredients that are key for them to scale operations and expand into neighboring markets.

World-class business infrastructure
Professionals experienced in U.S. & international laws and regulations
Federal regulations and exemptions
Local tax benefits and operating incentives
Access to the U.S. markets

Mature Financial and Insurance Industries Offer Dynamic Growth

World-class business infrastructure
Professionals experienced in U.S. & international laws and regulations
Federal regulations and exemptions
Local tax benefits and operating incentives
Access to the U.S. markets

Act 60 Incentives for the Finance and Insurance Sectors

The Puerto Rico Tax Incentives Code (Act 60) offers competitive benefits for a variety of activities in the finance and insurance industries. Incentives are granted for a 15-year term and can be renewed for an additional 15-year term.

fixed income tax rate on net income

0-6%

tax rate on capital gains and distribution of dividends or profits

75%

exemption from real and personal property taxes

50%

exemption on municipal license taxes

Qualifying entities include small and medium businesses, and public-private partnerships.

Act 60 Incentives for the Finance and Insurance Sectors

fixed income tax rate on net income

0-6%

tax rate on capital gains and distribution of dividends or profits

75%

exemption from real and personal property taxes

50%

exemption on municipal license taxes

Qualifying entities include small and medium businesses, and public-private partnerships.

Substantial Growth Across Puerto Rico’s Financial Services Sector

In 2020, there were 823 licensed financial institutions with $164 billion in total assets. The two largest sectors of the industry are made up of 6 commercial banks and 27 IBEs. Commercial banks managed $75 billion in assets in 2020, up $10.3 billion from 2019. IBEs managed $59.3 billion in assets in 2020, up $2.6 billion from 2019.

Unique Benefits for IFEs

The island maximizes local legislation to enable global financial and insurance activities. Therefore, companies benefit from unique flexibility and federal regulatory protection.

Under this combined jurisdiction, IFEs can:

Accept deposits
Borrow money
Lend money, including refinancing and underwriting
Provide letters of credit
Exchange foreign currency
Finance trades
Provide other financial services like: Securities Brokerage, Clearinghouse Services, Asset Management

- License from the Office of the Commissioner of Financial Institutions (OCIF)
- At least $5 million in capital, of which at least $250,000 must be paid-in
- ‍At least $300,000 in free and clear assets, or equivalent financial guarantee
- ‍4 full time employees in Puerto Rico
- ‍Must comply with the Bank Secrecy Act, the Patriot Act, and the regulations set by the Office of Foreign Asset Control (OFAC)

Puerto Rico’s Insurance Market

The insurance market features 47 domestic insurers, 33 international insurers, 271 foreign insurers, and 481 protected cells. These entities offer:

Life and Disability
Property and Contingency
Health
Reinsurance

Act 60: Incentives for International Insurers

As an international insurance hub, actors in this sector enjoy the advantages of U.S. accreditation and protection, as well as attractive local tax incentives.

$1.2 million tax exemption on net income
4% flat income tax rate on net income in excess of $1.2 million
100% tax exemption for partners or shareholders on distributions (total or partial liquidation) and on income from dividends and profit sharing
50% tax exemption on municipal license taxes
75% tax exemption on real and personal property taxes

A Thriving Insurance Industry that Leads the Way in Latin America

Puerto Rico’s insurance industry is amongst the strongest in Latin America on a per capita basis, thanks to the uniqueness of the regulatory landscape. The island has the highest degree of insurance penetration and density, as well as a high number of firms that keep prices and products competitive, with an insurance protection gap of just 0.2%.

PENETRATION (Premiums/GDP)

INSURANCE PROTECTION GAP (Uninsured Losses % of Total)

Connect to Finance and Insurance Organizations

Professional networks, industry associations, and governmental offices support this well-established sector.

Asociacion de Supervisores de Seguros de Latinoamerica (ASSAL)

Association for Financial Professionals of Puerto Rico (AFPPR)

Comision de Desarrollo Cooperativo (CDCOOP)

Financial Analysts Society of Puerto Rico (FASPR)

International Insurance Center (IIC)

National Association of Insurance Commissioners (NAIC)

Office of the Commissioner of Financial Institutions (OCIF)

Office of the Commissioner of Insurance (OCI)

Puerto Rico Chapter of Healthcare Financial Management Association (PRHFMA)

Puerto Rico International Bankers Association (PRIBA)

Puerto Rico International Insurers Association (PRIIA)

Single Business Portal

Entrepreneurs and innovators that are ready to invest and transform their businesses in Puerto Rico can access the Single Business Portal (SBP). The Single Business Portal helps you navigate the ins and outs of getting your project off the ground, offering information, documents, permits, and licenses – all in a streamlined and efficient tool.

Access here