Todd Snively Moves to Puerto Rico
For those of you that don’t know, Puerto Rico is a US Territory. It is not anything like one of the 50 states. Puerto Rico has its own government independent from the United States. When Todd Snively was looking at moving his business and his family to Puerto Rico, he realized he didn’t need a passport for travel.
What makes that important is that they also have their own tax laws.
Puerto Rico hit by not one, but two, hurricanes in 2017.
Puerto Rico has always been an impoverished island. Last I heard of the three million residents, something like two million of them live in poverty.
Todd Snively – Act 20
Act 20 wants to try and change that. One of the fastest ways to turn an economy around is to provide incentives to businesses. They hire more people, and thereby stimulate the economy, and they do it quickly. It doesn’t take a rocket scientist to follow that logic.
When Todd Snively moved, the first thing he did was get a place to live. Then bought a car and began shopping for the thousand things you need when you relocate to a new place. He was spending money, and that’s exactly part and parcel of what Puerto Rico expects to happen.
So, exactly what is the crux of Act 20? To attract a certain kind of business to the island in order to provide tax dollars to the Commonwealth. Also, provide jobs for locals, and stimulate the economy from all the trickle down effects moving businesses here creates.
Think about it – what really hurts businesses and business owners? Taxes. Taxes have been one of those things that sometimes will kill a business. Kill a business, employees are out of work, the government loses revenues, and it’s no good for anyone.
Export Services Act 20
In a nutshell, it’s a way to try and attract new businesses to Puerto Rico that do not depend on the people of Puerto Rico to earn money. Hence the name, Export Services Act.
Not every business is going to fit into what Puerto Rico is looking for with respect to this particular tax grant program. Matter of fact (rabbit hole warning) this tax grant program is available to anyone in Puerto Rico, not just business owners, or wannabe owners, living on the mainland.
But, if you have a business model that fits into the constraints of the program, then you receive an exceptionally lower tax bill.
To get right to the bottom line, so to speak, your business is only going to pay 4% on its net profits.
So, that’s cool, right?
But, what about the distribution of those profits from the business to the shareholder(s)? Zero tax.
That’s right, zip, nada, nothing.
Just to make sure we are all doing the same math, worth through this with me now – the Act 20 business earns one million dollars in net profit. The business pays 4%, or $40,000 to the government of Puerto Rico (specifically the Hacienda). Then the remaining $996,000 is a disbursement with ZERO TAXES!
Become a Resident of Puerto Rico
So, are there catches? Well, I guess that depends on what it is you consider a catch.
Probably the biggest, single thing that you must, 100% comply with, is that you have to move yourself to Puerto Rico. That is, you, must be a bona fide resident of Puerto Rico.
Is that a big deal?
Well, I guess that depends on you and your family. Do you, and they, want to live on an island in the Caribbean? Not everyone does.
I found out about this amazing program from friends that had already moved their businesses and family to Puerto Rico. They were of the opinion I’d be crazy not to move. I investigated, and almost instantly moved to Puerto Rico. I’ll be writing more articles to go into greater detail about my experiences both with the tax programs, and living in Puerto Rico.
For information about banking read our banks in Puerto Rico article.
Follow along with us as we explore this amazing program and what it takes to qualify, apply and gain approval.
Todd Snively is available for public appearances. Please contact him at his website, CLICK HERE.