A study commissioned by the Economic Development Department (DDEC by its Spanish acronym) has found that since 2015, the agency has approved 1,680 decrees for Act 20 on companies exporting services and that these firms have created an estimated 8,257 direct jobs on eligible activities. In terms of companies, consulting firms continue to comprise the largest portion of decree holders, with 40.8 percent, followed by “centralized management services” with 7.5 percent.
Since 2015, the agency also has granted 2,202 decrees for Act 22 tax exemptions for individuals who have relocated to the island. In addition, an estimated 768 Act 22 decree holders have also established businesses in Puerto Rico, creating 4,393 jobs. Of the Act 22 decree holders, the vast majority came from the mainland U.S.
“These results are very positive and demonstrate that Act 20 is achieving results in terms of the economic development of Puerto Rico, by exporting services and/or products that are generated on the island. We want data. We want numbers and this study provides that,” said DDEC Secretary Manuel Laboy to reporters.
Laboy acknowledged that there has been an issue with monitoring and ensuring that decree holders are complying with the law. In that sense, he vowed that the agency, as well as the Puerto Rico Treasury Department and the IRS would work to ensure compliance, such as through audits and the filing of annual reports.
The study was conducted by consulting firm Estudios Técnicos.