The application for priority projects through the Single Business Portal (SBP) is still available for investors, after the Regulation of Opportunity Zones in Puerto Rico came into force.
“Complying with the public policy commitment to provide effective tools to advance the economic development agenda around all of Puerto Rico, the application for priority projects is already duly registered with the Department of State, the Regulation of Opportunity Zones and available in the SBP. Both documents are a step in favor of the economic development of Puerto Rico,” Economic Development Secretary Manuel Laboy said.
According to the top official at the Department of Economic Development and Commerce (DDEC by its Spanish acronym), long-term investments on priority projects in Opportunity Zones are estimated at $600 million. “With the implementation of this regulation, we establish the rules for the selection and execution of the various initiatives, as well as filing of compliance reports, among other processes that will allow us to demonstrate the island’s competitiveness to the world,” he added.
The Puerto Rico Incentive Code in its Chapter 7 of Subtitle F, Sections 6070.54 – 6070.69, includes the provisions related to Opportunity Zones. These include a fixed income tax rate of 18.5 percent applicable to priority projects, exemptions in patents, property taxes and construction taxes of 25 percent, as well as a special process for the evaluation and granting of permits.
Laboy stated: “during the past year and a half the DDEC, together with the firm Kevane Grant Thornton, worked as a team to establish all the necessary regulations for the implementation of this economic development tool that can be used in the 98 percent of Puerto Rico.”
The Assistant Secretary of the Office of Business Incentives in Puerto Rico, Javier Bayón, who led the effort to draft the Regulation of Opportunity Zones, detailed that among the provisions of the regulation it is established that the tax credit for investment in Opportunity of up to 25 percent, will be distributed in four terms: 25 percent in the taxable year in which the Exempt Business completed the total construction of the project or began operations, the project does not require construction, and 25 percent of the total credit in the three subsequent taxable years.
To obtain the Regulation of Opportunity Zones, visit: www.ddec.pr.gov/wpcontent/uploads/2020/01/Reglamento_Zonas_de_Oportunidad.pdf. Those interested in starting the application process for priority projects under the Opportunity Zones of Puerto Rico, visit https://ogpe.pr.gov/freedom/.