News & Resources

On March 21, 2018, Governor Ricardo Rosselló provided some details about a new Labor Law Reform.  The new Labor Law Reform proposes to lower, on a still unspecified date, the vacation and sick leave accrual of private employees to 7 days per year.  In three years from the enactment of the Reform, the Christmas bonus will not be obligatory and Act 80 of May 30, 1976, the Unjust Dismissal Act, will be eliminated. The purpose of these proposed changes is to increase the rate of labor participation in Puerto Rico, which is currently around 40%, compared to an average of 63% in the US. You can view the article by clicking on the following link:  Click here to download  

Act 93 of August 8, 2017 (“Act 93”), which is effective immediately, amends Act 185- 2014, as amended, known as the Puerto Rico Private Equity Funds Act (“Act 185”), to clarify the scope and meaning of certain provisions in accordance with its legislative history of facilitating entrepreneurship and the deployment of private capital in Puerto Rico. The principal changes introduced by Act 93 deal with certain defined terms, eligibility requirements, and tax deductions related to an investment in a private equity fund (each, a “Fund”) under Act 185. You can view the complete article by clicking on the following link: Click here 

Recent legislation will accelerate much-needed power, road, and water infrastructure projects – meanwhile, law firms are winning more work from clients that have relocated to Puerto Rico.

On June 20, 2017, the Disbursement Authorization and Tax Concession Committee (the “Committee”) issued Resolution 2017-05 (the “Resolution 2017-05”) establishing rules to limit the use of Granted Credits
for the tax year 2017 and subsequent years.

On March 22, 2017, the Disbursement Authorization and Tax Concession Committee (the “Committee”) issued Resolution 2017-01 (the “Resolution”) establishing that a Granted Credit (as defined below) may be sold by its Holder (as defined below) or claimed against the income tax of the Holder for the 2016 Tax Year without additional restrictions than those imposed by the Puerto Rico Internal Revenue Code of 2011, as amended (the “Code”), or the special laws applicable to the Granted Credit.

Act 16 of March 8, 2017 requires public and private employers to provide equal pay to employees, regardless of their gender, that perform substantially the same work.

As a public policy matter, on February 21, 2017, the Government of Puerto Rico enacted Act 14-2017 to incentivize medical professionals to stay in Puerto Rico or move to Puerto Rico and practice medicine locally.

The Labor Transformation and Flexibility Act (“the Act”) provides that employees hired before the date of effectiveness will keep their current rights, as expressly provided in the articles of the Act.

The PR Department of Treasury (the “PR Treasury”) recently announced that it will begin the implementation of a new integrated tax platform in three phases beginning on October 15, 2016 through December 2018.

Tax Notes, a renowned United States tax magazine, published “Puerto Rico: A Tax Haven for Hedge Fund Managers”, an article written by our Counsel Fernando Goyco-Covas describing the United States federal and Puerto Rico income tax benefits afforded by Puerto Rico’s Acts 20 and 22 and the United States Internal Revenue Code to hedge fund managers that become bona-fide residents of Puerto Rico.