LinkedInJuly 14, 2026
A US citizen can move to Puerto Rico, keep the passport, and pay 0 percent on island-sourced interest and dividends, and on gains from securities bought after residency begins.
Act 38-2026 rewrote the clock.
File the Chapter 2 application on or before 31 December 2026 and the rate is 0 percent. File from 1 January 2027 and it is 4 percent, with six years of prior non-residency to prove.
The exemption tracks appreciation, not realisation. Gains that accrued before the move get neither rate. They are taxed at 5 percent only if recognised more than ten years after residency begins and inside the decree window. Recognised at any other time, they fall back to ordinary Puerto Rico rates, which are higher.
The ordinary rates are the point. Corporate tops out at 37.5 percent, personal at 33 percent, plus a capped 5 percent gradual adjustment tax above USD 500,000. Tax Freedom scores 4.9 out of 10 here, the second weakest of the 23 dimensions GeoCompass scores. The 0 percent does not exist outside the decree.
The decree has a price. USD 15,000 per year, fixed, regardless of income, for its entire life. A principal residence bought, not leased, within two years, from a wholly unrelated seller, and held throughout.
Puerto Rico scores 67.93 out of 100 overall. Rank 80.
Full profile in the carousel.
Want to see where you actually rank, the free 6 minute diagnostic is in the first comment.
#internationaltax #hnwi #relocation
Puerto Rico
United States