Quick answer: To qualify for Act 60 you must become a bona fide Puerto Rico resident — 183+ days per year on the island, a real residence purchased within 2 years, an annual charitable donation, and (for the business rate) a PR entity serving off-island clients. You must also cleanly exit your old state's tax residency. Full checklist below, in the order you'll actually hit each requirement.
New to Act 60 overall? Start with the complete guide — what the law is, the rates, and the December 31, 2026 deadline for the 0% capital-gains tier. This page is the operational follow-up: every requirement, documented.
The six requirements, at a glance
| Requirement | Threshold |
|---|---|
| Presence on the island | 183+ days/year in PR |
| Presence in the old state | ≤ 90 days/year on the mainland (with exceptions) |
| Tax home | PR must be your principal place of business/life |
| Property | Purchase a residence within 2 years (Chapter 2) |
| Donation | $10,000/year to PR-registered nonprofits |
| Compliance | Annual reports + day-count records, decree term |
Bona fide residency — the three tests
"Bona fide resident" is a US tax-law term of art (IRC §937) with three prongs, and you must pass all three for the year you claim benefits:
- Presence test: 183+ days physically in Puerto Rico during the tax year. Any part of a day on the island generally counts as a full day — arrive on the 9pm flight, that day still counts.
- Tax home test: your main place of business or employment is in PR. For founders and remote execs this is your PR entity's office — your home counts.
- Closer connection test: your life — family, home, driver's license, voter registration, professional ties — is more connected to PR than anywhere else.
The 183-day count — and what counts as a day
The day count is where applications live or die. The counting rules:
- Every partial day counts. Landing at 11:50pm? That's a PR day.
- Travel days have edge cases. Any part of a day on the island generally counts as a PR day, but transit-day treatment carries technical rules. When your count is tight, have counsel review the travel calendar before you book.
- Mainland days are capped at 90 for most applicants. Business beyond that can qualify for exceptions, but only with documentation.
- Keep everything: boarding passes (physical and e-receipts), ferry tickets, toll statements, hotel folios, restaurant receipts. If it shows where you were, keep it for 7 years.
The property purchase requirement
Chapter 2 individual investors must purchase a residential property in Puerto Rico within two years of decree approval. The law sets minimums that adjust with the market — the point is a genuine residence, not a token condo. Renting first is fine and common: lease for a year, learn the island, then buy with conviction.
Where decree holders actually live: Dorado (the hub), Condado/Old San Juan, Palmas del Mar, Rincón, and Fajardo. The right town shapes your residency record and your daily life — treat it as a strategy decision, not a chore. We advise on the purchase and introduce specialists; we sell no listings.
The annual charitable donation
Chapter 2 holders contribute $10,000 annually to Puerto Rico–registered nonprofits (first-year $5,000 is common in practice). It's a real cost of the decree — budget it into your savings math. Many clients direct it toward causes they actually care about on the island; the requirement is only that the nonprofit is PR-registered.
The entity — for the 4% business rate
The 4% rate isn't personal — it's the decree rate on your PR entity's export-service income. Requirements in practice:
- Form a PR entity (LLC or corporation) and obtain an EIN.
- Services must be exported: performed in PR, for clients outside PR. Serving mainland clients from the island is the classic pattern.
- Income from services performed outside PR doesn't qualify — the work must be done on the island.
- The entity files a PR excise/local return and pays the 4% decree rate on qualifying revenue.
Cleanly exiting your old state
Act 60 approval is half the move. The other half is convincing your old state you're gone. California, New York, and a handful of others aggressively audit departing high earners:
- File a part-year/nonresident return in your exit year, marked clearly.
- Sever the anchors: sell or lease out the old home, surrender the driver's license, re-register cars, move bank/brokerage "mailing addresses," update voter registration, join local PR organizations.
- Document the story: auditors build domicile cases from patterns — where your dentist is, where your kids go to school, which clubs you belong to. Make yours unambiguous.
This is specialist work — our licensed attorney network handles aggressive-domicile-audit states routinely.
Documentation you'll need for the application
- Passport / birth certificate (identity & citizenship)
- Last 2 years of federal tax returns
- Proof of PR address: lease deed or closing statement
- PR driver's license (get it early — it's a closer-connection signal)
- Entity documents: formation, EIN letter, good-standing
- Bank statements showing PR activity
- Affidavit of intent to reside (your attorney drafts this)
What disqualifies you
- Unfiled tax years or open IRS problems — resolve first, apply second.
- Too many mainland days — over the caps, the whole structure collapses.
- Services performed off-island billed through the PR entity (for Chapter 3).
- A "paper" residence — if your family and life stay on the mainland, both PR and your old state can challenge you, from opposite directions.
The honest versionEvery requirement above is satisfiable by a person who genuinely moves their life to Puerto Rico. Almost none of them are satisfiable by a person who doesn't. The checklist isn't paperwork — it's a description of the life the decree requires.
Run your numbers before you run the checklist
The requirements are the "how." Whether it's worth it is the "whether." Run your income and state through the savings calculator, then book the free assessment — we'll confirm your eligibility picture against this checklist in 30 minutes.