Puerto Rico (US Territory) Citizenship & Second Passport Guide
🛂 Passport Rank: #6
✈️ Visa-Free Countries: 186
💰 Tax System: varies
🗺️ Pathways: 1
Overview
Puerto Rico is an unincorporated US territory where residents are US citizens and hold US passports, offering strong global mobility. It is notable for its unique tax incentive programmes under Act 60 (formerly Acts 20 and 22), which attract US citizens seeking significant tax advantages by establishing bona fide residency. Puerto Rico residents pay no federal income tax on Puerto Rico-sourced income.
Citizenship Pathways
US Citizenship via Puerto Rico (Birthright/Residency)
Cost: No additional cost (US citizens)
Timeline: 0.0 years
Presence Required: Bona fide residence
Puerto Ricans are US citizens by birth. Moving to Puerto Rico does not grant US citizenship to non-citizens, but Act 60 (formerly Acts 20/22) offers significant tax incentives: 0% capital gains tax, 4% corporate tax, and 0% dividend tax for qualifying residents.
Step-by-Step Process
Residency for US Citizens with Act 60 Tax Benefits
Step 1: Establish Residency: Move to Puerto Rico with the intent to reside permanently.
— Ongoing — Varies
Step 2: Meet Physical Presence Test: Reside in Puerto Rico for at least 183 days during the tax year.
— 183+ days — N/A
Step 3: Apply for Act 60 Tax Incentives: Qualify and apply for tax decrees under Act 60 to benefit from significant tax exemptions.
— Varies — Legal/Application fees
Pros & Cons
Advantages
US citizenship and passport with strong global mobility (rank 6, 186 visa-free destinations)
Significant tax incentives for new residents under Act 60
No federal income tax on Puerto Rico-sourced income for bona fide residents
Tropical climate and rich cultural heritage
English and Spanish speaking environment
No immigration requirements for US citizens
Challenges
Limited voting rights in US federal elections while residing in Puerto Rico
Economic challenges and natural disaster recovery efforts
Potential changes to tax incentives
Still subject to federal taxes on non-Puerto Rico sourced income
Requirements
US Citizenship — Individuals born in Puerto Rico are US citizens. Other US citizens can move to Puerto Rico without immigration requirements.
Bona Fide Residency — To qualify for tax benefits, individuals must establish bona fide residency: at least 183 days a year in Puerto Rico, having a tax home there, and closer connections to Puerto Rico than to the US or any foreign country.
Act 60 Application — To qualify for Act 60 tax incentives, file an application with the Puerto Rico Department of Economic Development and Commerce.
Tax System
System: varies
Bona fide residents of Puerto Rico are generally exempt from federal income tax on Puerto Rico-sourced income. However, they are still subject to federal taxes on non-Puerto Rico sourced income and other federal taxes like Social Security and Medicare.
Frequently Asked Questions
Are residents of Puerto Rico US citizens?
Yes, individuals born in Puerto Rico are US citizens.
What are the Act 60 tax incentives?
Act 60 (formerly Acts 20 and 22) provides significant tax incentives for new residents, including a 4% flat corporate tax rate for export services businesses and 0% tax on dividends, interest, and capital gains for individual investors who become bona fide residents.
Do I need a visa to move to Puerto Rico?
No. US citizens can move to Puerto Rico without any immigration requirements, as it is a US territory.