Puerto Rico Promotion Agreement for the Purpose of Raising Money for a Business

State:
Multi-State
Control #:
US-01866BG
Format:
Word; 
Rich Text
Instant download

Description

Any investment contract that gives a party to the contract evidence of a debt or a business participation right can be a security covered by the Federal Securities Act of 1933. Certain stock issue transactions are also exempt (i.e., exempt from registration with the Securities and Exchange Commission).


The most common exempt transaction that close corporations take advantage of is the intrastate offering. To qualify for this exemption, both the investors and the issuer must all be residents of the same state. The issuer must also meet the following requirements:


" 80% of its assets must be located in the state;

" 80% of its income must be earned from operations within the state; and

" 80% of the proceeds from the sale must be used on operations within the state.


Also, for nine months after the issuance, the stock can only be sold to state residents.


If the offering is not exempt, then the issuer must go through the registration process with the Securities and Exchange Commission.

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  • Preview Promotion Agreement for the Purpose of Raising Money for a Business
  • Preview Promotion Agreement for the Purpose of Raising Money for a Business
  • Preview Promotion Agreement for the Purpose of Raising Money for a Business

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FAQ

Act 20 and Act 22 were enacted in Puerto Rico in 2012 to promote the exportation of services by companies and individuals providing such services from Puerto Rico and the relocation of high-net-worth individuals to Puerto Rico.

Act 22 of 2012 also known as the Act to Promote the Relocation of Investors to Puerto Rico (Spanish: Ley para Incentivar el Traslado de Inversionistas a Puerto Rico) is an act enacted by the 16th Legislative Assembly of Puerto Rico that fully exempts local taxes on all passive income generated by individuals that

Only Bona Fide Puerto Rico Residents Qualify for Act 60 Tax Benefits. The first question the IRS asks is whether an individual has been physically present on Puerto Rican soil for at least 183 days during the taxable year. Note that there are additional methods for satisfying this requirement.

Puerto Rico Act 60: How You Can Lower Your Federal and State Tax Rates Under the Resident Tax Incentive Code. The Tax Incentive Code, known as Act 60, provides tax exemptions to businesses and investors that relocate to, or are established in, Puerto Rico.

The idea was that Puerto Rico needed to be able to levy local income tax and the population of Puerto Rico would not be able to pay both federal and local taxes. The federal government therefore allowed residents of Puerto Rico to earn wages in Puerto Rico without paying federal income tax on those wages.

To get started, you can hire an attorney to file the paperwork for Act 22, or, you can file yourself through Puerto Rico's Single Business Portal.

1. You were present in the relevant territory for at least 183 days during the tax year. 2. You were present in the relevant territory for at least 549 days during the 3-year period that includes the current tax year and the 2 immediately preceding tax years.

Act 60 - Export Services and Commerce To become exempt, the business needs to apply for a tax concession via a tax exemption decree considered a contract with the Office of Incentives for Businesses of the Government of Puerto Rico.

Further, Resident Individuals must apply for and obtain a tax exemption decree under Act 60. To obtain access to the approved and signed tax exemption decree, a one-time fee of $5,000 must be satisfied and deposited into a special fund to promote the relocation of Resident Individuals to Puerto Rico.

Why Move to Puerto Rico? Puerto Rico is the only place in the world that follows neither U.S. domestic tax law nor the FATCA. As of January 1st, 2020, island residents enjoy full tax exemptions on Puerto Rican-sourced dividends and capital gains earned from the appreciation of securities like cryptocurrencies.

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Puerto Rico Promotion Agreement for the Purpose of Raising Money for a Business