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Economic Development Fund
Financial support mechanism providing grants or credits for capital investments, employment creation, and economic development activities.
9 min
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Section Code:
5010.01
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Purpose:
EDF — 5010.01
Overview
The Economic Development Fund under Section 5010.01 of Act 60-2019, as amended, establishes a mechanism for businesses to receive financial support for capital investments, employment creation, and other economic development activities. Unlike other Act 60 incentives that provide tax rate reductions, the Economic Development Fund provides direct financial grants or credits for qualifying investments and activities.
Qualifying businesses may receive financial support for machinery and equipment acquisition, property improvements, employment creation, and other investments that advance Puerto Rico's economic development objectives. The fund is administered by designated government agencies and supports projects across multiple industries.
The key distinction of the Economic Development Fund compared to other Act 60 programs is its focus on direct financial support rather than ongoing tax rate reductions. The fund addresses specific capital and investment needs that may present barriers to project implementation.
The Economic Development Fund complements other incentive programs by providing upfront capital support that helps businesses initiate or expand operations. Businesses may access fund resources in combination with tax incentives under other Act 60 designations.
Key Benefits
Capital Investment Support
The fund provides financial grants or credits for qualifying capital investments including machinery, equipment, facilities, and infrastructure. Support reduces the upfront capital required for project implementation.
Employment Creation Incentives
Businesses may receive financial support based on employment creation, providing resources that offset hiring and training costs for new Puerto Rico employees.
Property Development Support
The fund supports property improvements and development projects that enhance business capabilities and economic infrastructure.
Industry-Specific Programs
Specialized fund programs support specific industries including creative industries and film production, addressing sector-specific development needs.
Requirements & Obligations
Project Eligibility
Projects must meet fund eligibility criteria including demonstrating economic impact, job creation, capital investment levels, and alignment with economic development priorities.
Application and Approval
Businesses must submit detailed applications documenting proposed investments, projected outcomes, and funding requirements. Agency review evaluates project merits and fund availability.
Investment and Milestone Commitments
Fund recipients must meet specified investment milestones and deliver committed economic outcomes. Failure to meet commitments may require fund repayment.
Reporting and Documentation
Recipients must maintain detailed records of fund use, investment activity, and economic outcomes. Regular reporting to administering agencies is required.
Coordination with Other Incentives
Businesses receiving fund support may also qualify for other Act 60 tax incentives. Proper coordination ensures compliance with all applicable programs.
How to Apply
The application process varies by fund program but typically requires six (6) to twelve (12) months. Businesses begin by identifying qualifying projects and assessing fund eligibility.
Applications include detailed project descriptions, investment plans, economic impact analyses, employment projections, and funding requests. Supporting documentation demonstrates project viability and economic contribution.
Administering agencies review applications and evaluate projects based on economic impact, alignment with priorities, and fund availability. Upon approval, fund agreements specify terms, milestone requirements, and disbursement schedules.
Fund disbursements typically occur in tranches based on achievement of investment and performance milestones. Recipients must maintain compliance and file required reports throughout project implementation.
This information is educational and should not be considered legal or tax advice. Applicants should consult with qualified legal and tax professionals familiar with Puerto Rico incentive programs before making any business decisions or submitting applications.
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