On March 10, 2026, Governor Jenniffer González-Colón signed Act 38-2026, the most significant amendment to Puerto Rico's Incentives Code (Act 60-2019) since the code was enacted. If you have been following the program under its old shorthand — Act 22, the individual investor decree, the "0% rate" — here is what actually changed, and what did not.

The short version

  • The Resident Individual Investor program was extended twenty years — from a sunset of December 31, 2035 to December 31, 2055.
  • The 0% rate ends for new applicants. Decree applications filed on or after January 1, 2027 fall under a new regime: generally a 4% Puerto Rico tax on interest, dividends, and post-residency capital gains, and 5% on certain pre-residency long-term gains, running through 2055.
  • Applications filed on or before December 31, 2026 are grandfathered under the prior rules — interest, dividends, and post-residency capital gains generally remain exempt (0%) through December 31, 2035.
  • New eligibility screen: applicants under the new regime must show they were not Puerto Rico residents during the six years immediately before relocating (replacing the old fixed lookback window).
  • Primary residence rule tightened: the required Puerto Rico home must be owned directly by the individual or through a trust.
  • Business incentives were not touched. The export services program — the 4% rate on eligible export services income and the 100% dividend exemption — remains unchanged, along with the manufacturing and tourism chapters.

The date that matters is the filing date

Under Act 38-2026, the regime that applies is determined by the date the decree application is filed — not the date of relocation, and not the date the decree is approved. An application filed on or before December 31, 2026 falls under the prior rules; an application filed on or after January 1, 2027 falls under the new 4% regime.

What existing decree holders keep

An Act 60 decree operates as a contract between the grantee and the Government of Puerto Rico — it cannot be modified unilaterally, and amendments enacted after a decree is issued generally do not reach it. Existing individual investor decree holders therefore keep the terms they signed. Act 38-2026 also gives them an option: decree holders may elect to modify their decrees to adopt the new regime and its longer 2055 horizon.

What did not change

Everything else that makes the program demanding is still there:

  • Bona fide residency. The individual benefits still require becoming a bona fide resident of Puerto Rico under the IRS three-part test — presence (generally at least 183 days a year on the island), tax home, and closer connection. Appreciation that accrued before the move generally remains subject to U.S. federal tax when realized.
  • Ongoing obligations. Individual investor decrees commonly carry an annual charitable contribution (currently $10,000, half to government-listed nonprofits working to eradicate child poverty in Puerto Rico), the purchase of a primary residence within two years, and an annual report filed with the Department of Economic Development and Commerce (a filing fee applies).
  • The entity layer. Businesses operating under Act 60 still need a properly registered Puerto Rico entity — with a resident agent on the island — and still file the Department of State's regular annual obligations on top of the decree's own annual report. That corporate layer is what InCorp provides: formation and registered agent service in Puerto Rico.

For the business-side incentive that Act 38-2026 left intact, see how the Act 60 export services decree works.

This article is general educational information, current as of July 2026, and is not legal or tax advice. Whether any decree, rate, or deadline applies to a specific situation is a question for a qualified Puerto Rico tax attorney or CPA.