Act 60 Application Timeline: What to Expect From Day 1 to Decree Approval

The Act 60 application process takes 4-8 months on average. Here's an exact week-by-week breakdown so you know what to expect, what documents you'll need, and how to avoid delays.

Pre-Application Phase (Weeks 1-8)

Week 1-2: Initial Assessment

Your tasks:

• Determine which Act 60 chapter fits your situation

• Calculate potential tax savings

• Assess whether you meet basic eligibility

• Research costs vs. benefits

Actions:

✅ Read relevant chapter of Act 60-2019

✅ Calculate current vs. projected tax liability

✅ Review residency requirements (if individual investor)

✅ Review 80% export revenue test (if export services)

Milestone: Decision to proceed

Week 3-4: Consult with Advisors

Who you need:

• Puerto Rico tax attorney (specializing in Act 60)

• CPA familiar with PR tax law

• Immigration/relocation specialist (if applicable)

What they assess:

• Detailed eligibility analysis

• Tax structure optimization

• Compliance requirements

• Timeline projections

• Cost estimates

Investment: $5,000-15,000 for initial consultations

Milestone: Advisor team assembled, strategy confirmed

Week 5-6: Begin Preliminary Relocation (If Individual Investor)

If you're an individual investor:

✅ Start looking for PR housing

✅ Research neighborhoods

✅ Schedule PR visit to view properties

✅ Begin planning family transition (if applicable)

If you're an export services business:

✅ Identify potential PR office space

✅ Research coworking options

✅ Explore employee recruitment resources

✅ Open preliminary discussions with PR service providers

Milestone: Relocation plan in motion

Week 7-8: Entity Formation (If Business)

For export services businesses:

Puerto Rico entity formation:

1. Choose entity type (Corporation or LLC)

2. Select PR registered agent

3. File Articles of Incorporation with PR Dept of State

4. Obtain Federal EIN from IRS

5. Register with PR Treasury Department

6. Apply for municipal business license

Cost: $500-2,000 total

Timeline: 2-3 weeks

Documents you'll receive:

• Certificate of Incorporation

• EIN confirmation

• PR Treasury registration

• Municipal license

Milestone: PR entity established

Application Preparation Phase (Weeks 9-12)

Week 9-10: Gather Required Documents

For Individual Investors (Chapter 2):

Personal documents:

• Passport copy

• Birth certificate

• Marriage certificate (if applicable)

• Current tax returns (last 3 years)

• Financial statements

• Investment portfolio statements

• Proof of net worth

Puerto Rico tie documents:

• Lease agreement or property purchase contract

• Utility setup confirmations

• PR bank account opening documents

• Evidence of housing search/move planning

Financial projections:

• Expected investment income

• Capital gain projections

• Dividend/interest forecasts

For Export Services Businesses (Chapter 3):

Corporate documents:

• Articles of Incorporation

• Bylaws/Operating Agreement

• Ownership structure charts

• Officer/director information

• EIN letter

Business operations documents:

• Office lease agreement

• Photos of office space

• PR bank account statements

• Employee recruitment plan

• Job postings for PR positions

Financial documents:

• Business plan (10-20 pages)

• 3-5 year financial projections

• Current financial statements

• Tax returns (if existing business)

• Customer list with locations

• Sample contracts showing export nature

• Revenue breakdown (PR vs. non-PR customers)

Export revenue evidence:

• Invoice samples (with customer addresses)

• Contracts with non-PR customers

• Payment processing records

• Analysis proving 80%+ export revenue

Week 11: Prepare Business Plan (If Business)

Required sections:

1. Executive Summary (2 pages)

2. Service Description (3-4 pages)

3. Market Analysis (3-4 pages)

4. Operations Plan (4-5 pages)

5. Financial Projections (5-6 pages)

Tip: Hire PR-based business plan writer familiar with Act 60 requirements ($3,000-8,000)

Week 12: Application Assembly & Review

Actions:

• Compile all documents

• Complete official application forms

• Attorney review of entire package

• Final completeness check

• Prepare application fee payment ($5,000)

Quality check:

✅ All forms completed accurately

✅ All supporting documents included

✅ Financial projections realistic

✅ Export revenue clearly demonstrated (if business)

✅ Residency plan clear (if individual)

✅ No missing signatures

✅ All documents properly certified/notarized

Milestone: Application package complete and ready to submit

Application Submission Phase (Week 13)

Week 13: Submit Application

Where to submit:

• Individual Investors: Department of Economic Development and Commerce (DDEC)

• Export Services: Puerto Rico Industrial Development Company (PRIDCO)

Submission method:

• Online portal (preferred)

• Physical submission (San Juan office)

• Email submission (PDF package)

What to include:

• Completed application forms

• All supporting documents

• Application fee payment ($5,000 check or wire)

• Cover letter summarizing application

You'll receive:

• Application receipt confirmation

• Reference/case number

• Assigned case manager contact

• Expected review timeline

Milestone: Application officially submitted

Government Review Phase (Weeks 14-28)

Weeks 14-16: Initial Review

What happens:

• Case manager reviews application for completeness

• Preliminary eligibility assessment

• Identification of any missing information

• Initial questions drafted

You'll likely receive:

• Request for additional information (RFI)

• Clarifying questions about your situation

• Request for updated documents

• Request for more detailed projections

Your response timeline: 10-15 business days

Common RFI topics:

For individual investors:

• Proof of PR housing commitment

• Clarification of investment portfolio

• Evidence of planned PR presence

• Family situation details

For export services:

• More detail on export revenue proof

• Customer location verification

• Office space/operations substance

• Employee recruitment timeline

• More detailed financial projections

Weeks 17-20: Substantive Review

What happens:

• Detailed evaluation of business viability (if business)

• Analysis of economic benefit to PR

• Review of financial projections

• Assessment of compliance capability

• Verification of eligibility criteria

• Cross-checking with other government agencies

Potential interactions:

• Phone calls with case manager

• Virtual meeting to discuss application

• Additional document requests

• Clarifying questions

For export services:

• May include site visit to proposed office

• Interview with principals

• Review of customer contracts

Weeks 21-24: Internal Approvals

What happens:

• Case manager prepares recommendation

• Internal review by senior staff

• Legal review of proposed decree terms

• Financial analysis approval

• Committee review (for larger decrees)

You might experience: Radio silence during this period

Weeks 25-28: Decree Drafting

What happens:

• Legal team drafts your specific tax decree

• Terms customized to your situation

• Obligations clearly specified

• Benefits explicitly stated

• Reporting requirements defined

Decree includes:

• Effective date

• Term length (typically 15 years)

• Specific tax rates granted

• Employment commitments (if business)

• Investment requirements (if individual)

• Annual reporting obligations

• Charitable donation requirements (if individual)

• Compliance conditions

Decree Review & Negotiation (Weeks 29-32)

Week 29-30: Draft Decree Received

You'll receive:

• Draft decree document (20-30 pages)

• Summary of terms

• Deadline to review and respond

Your tasks:

• Review with your attorney

• Verify all terms are as expected

• Identify any errors or concerns

• Prepare any requested modifications

Week 31-32: Negotiation & Finalization

Potential negotiations:

• Employment ramp-up timeline

• Investment requirement timing

• Reporting frequency

• Specific clarifications on qualifying income

Final review:

• Legal review of final terms

• Confirm you can meet all obligations

• Verify effective date

• Check decree term length

Both parties sign:

• You (or corporate officers)

• Government officials (PRIDCO/DDEC)

Milestone: Decree executed and effective

Post-Decree Implementation (Weeks 33-36)

Week 33-34: Immediate Compliance Steps

For individual investors:

✅ Complete relocation to PR (if not already done)

✅ Obtain PR driver's license

✅ Register vehicle in PR

✅ Open PR bank accounts (if not already done)

✅ Register to vote in PR

✅ Establish PR medical providers

✅ Set up charitable donation plan ($10K annually)

✅ Arrange $200K PR investment (if not done)

For export services businesses:

✅ Finalize office space lease

✅ Set up PR operations

✅ Hire first PR employee (within 6 months)

✅ Open PR business bank account (if not done)

✅ Transfer qualifying contracts to PR entity

✅ Begin conducting operations from PR

✅ Implement separate accounting for decree income

Week 35-36: Tax Setup

Actions:

✅ Register for PR tax withholding (if employees)

✅ Set up quarterly estimated tax payments

✅ Engage PR CPA for ongoing tax compliance

✅ Set up accounting systems for decree income tracking

✅ Implement recordkeeping systems for compliance

✅ Calendar annual report deadlines

Milestone: Fully operational under decree

Total Timeline Summary

Minimum (Fast Track): 4-5 months

• Pre-application: 4 weeks

• Preparation: 4 weeks

• Review: 12 weeks

• Finalization: 4 weeks

Average: 6-7 months

• Pre-application: 8 weeks

• Preparation: 4 weeks

• Review: 16 weeks

• Finalization: 4 weeks

Extended (Complex Cases): 8-12+ months

• Pre-application: 8 weeks

• Preparation: 6 weeks

• Review: 24 weeks

• Finalization: 6 weeks

What Causes Delays

Common Delay Factors

❌ Incomplete applications (+2-4 weeks)

• Missing documents

• Incomplete forms

• Unclear information

❌ Insufficient export revenue proof (+3-6 weeks)

• Vague customer information

• Unclear revenue sources

• Need additional contracts/invoices

❌ Unrealistic financial projections (+2-4 weeks)

• Overly optimistic forecasts

• Lack of supporting analysis

• Industry benchmark mismatches

❌ Unclear operational substance (+3-6 weeks)

• No clear PR office plan

• Vague employment commitments

• Insufficient operations detail

❌ Government processing backlogs (+4-12 weeks)

• High application volume

• Staffing constraints

• Holiday periods

❌ Back-and-forth on terms (+2-6 weeks)

• Negotiating specific conditions

• Clarifying obligations

• Revising projections

How to Accelerate Your Application

Before Submission

✅ Hire experienced advisors - They know exactly what's needed

✅ Over-document - More is better than less

✅ Be realistic in projections - Don't overstate to impress

✅ Start entity formation early - Don't wait until week 7

✅ Have office space lined up - Show genuine commitment

✅ Demonstrate export revenue clearly - Make it obvious

During Review

✅ Respond quickly to RFIs (within 3-5 days when possible)

✅ Be available for calls/meetings with case manager

✅ Provide clear answers to questions (don't be vague)

✅ Show flexibility on non-critical terms

✅ Maintain communication with case manager

Post-Approval

✅ Implement immediately - Don't delay compliance steps

✅ Document everything - Start building compliance file

✅ Meet deadlines for conditions (employee hiring, investment, etc.)

Cost Summary (Full Process)

Professional fees:

• Initial consultations: $5,000-15,000

• Application preparation: $10,000-25,000

• Business plan (if needed): $3,000-8,000

• Legal review: $5,000-15,000

Government fees:

• Application fee: $5,000

• Entity formation: $500-2,000

• Licenses: $500-1,500

Setup costs:

• Office space deposit: $3,000-10,000

• Relocation expenses: $5,000-20,000

Total estimated: $37,000-100,000+

What to Do While Waiting

Don't just sit idle during the 4-8 month process:

✅ Begin relocation (if individual investor)

✅ Set up PR operations (if business)

✅ Build PR presence (start spending time there)

✅ Network with other Act 60 participants

✅ Research compliance requirements

✅ Plan long-term PR strategy

The Bottom Line

The Act 60 application process is substantial but manageable with proper preparation:

• Timeline: 4-8 months average

• Cost: $37,000-100,000+ all-in

• Effort: Significant documentation and coordination

• Success rate: 85%+ with proper preparation

Key to success: Start early, over-prepare, respond quickly, and work with experienced advisors who know the process inside and out.

The investment of time and money pays for itself many times over once your decree is active and you're saving hundreds of thousands to millions in taxes annually.