Finance & Insurance In Puerto Rico

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.

U.S. dollar
Stable business environment
Federal regulations and accreditations

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

Act 60 Incentives for Finance and Insurance Stakeholders

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.

4%
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 2019, there were 854 licensed financial institutions with $149 billion in total assets. The two largest sectors of the industry are made up of 7 commercial banks and 28 IBEs. Commercial banks managed $64.7 billion in assets in 2019, up $4.4 billion from 2018. IBEs managed $56.7 billion in assets in 2019, up $7.6 billion from 2018.

Unique Benefits for IFEs

Puerto Rico 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

Puerto Rico’s Insurance Market

The insurance market features 47 domestic insurers, 33 international insurers, 281 foreign insurers, and 481 protected cells. These entities offer:

  • Life and Disability
  • Property and Contingency
  • Health
  • Reinsurance

Act 60: Incentives for International Insurers

Puerto Rico offers international insurers the benefits of an international insurance hub, the advantages of U.S. accreditation and protection, and 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

Act 60 Synchronizes Finance & Insurance Incentives

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)

Download Sector Sheet

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Karen Mojica-Franceschi, Esq.

Business Development Director
+1 (787) 376-7159
kmojica@investpr.org