Tax Incentives for Tourism in Puerto Rico The Basics Every Tourism Entrepreneur Should Know
- Lanza Visión
- January 13, 2026
Presented by:
Partner in the Tax Department at Ferraiuoli LLC. Attorney and CPA with extensive experience in tax incentives applied to investment and tourism.
Table of Contents
Every hotel that is built, every lodging facility that is renovated, and every tourism project that opens its doors in Puerto Rico has one thing in common: behind the ocean views and the traveler’s experience, there are key economic decisions that make that development possible. This newsletter was created to explain, simply and without technical jargon, how the tax incentives that drive tourism investment on the Island work, and why understanding them matters if you are an entrepreneur, investor, or owner of a tourism-related business.
What are tax incentives applied to tourism in Puerto Rico?
A
A tax incentive applied to tourism is a benefit offered by the government of Puerto Rico that allows certain tourism-related businesses to pay less in taxes when they invest on the Island. Under Act 60, these incentives include lower tax rates, exemptions from certain taxes, and, in some cases, tax credits. The goal is to encourage the construction, renovation, and operation of lodging facilities, such as hotels and other tourist accommodations, in order to strengthen the tourism industry and its economic impact.
Why does Puerto Rico offer incentives to the tourism sector, and what is the main objective?
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Puerto Rico offers incentives to the tourism sector because tourism generates jobs, economic activity, and revenue for the Island. Before approving the Incentives Code, the government analyzed the return on investment of these benefits and concluded that the economic impact they generate outweighs the cost of the incentives granted. The primary objective is to increase the number of rooms available to tourists through the development of new lodging facilities and the renovation of existing ones.
What types of businesses can benefit from these incentives, in general terms?
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In general terms, tourism incentives may apply to hotels, guesthouses, bed and breakfasts, condohotels, theme parks, and other tourism-related activities. Each project must be evaluated on an individual basis, as eligibility depends on the nature of the business and how it integrates into Puerto Rico’s tourism ecosystem.
What common or typical benefit does a qualifying tourism business receive?
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A qualifying tourism business may benefit from a significant reduction in its tax burden, including investment tax credits of 30% or 40%, a fixed 4% income tax rate, exemptions from property taxes, municipal license taxes, and construction excise taxes, as well as exemptions from taxes on dividends, stamps, and certain payments related to real estate transactions. Not all benefits apply in every case, but taken together, they represent a significant incentive for tourism investment.
What should an entrepreneur who is just starting out and hears “Act 60” for the first time know?
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An entrepreneur hearing about Act 60 for the first time should understand that these incentives do not apply in the same way to all businesses. Eligibility depends on the type of project, the industry, and the business structure, which makes it important to seek professional guidance before making decisions. A proper evaluation from the outset can help prevent mistakes and maximize the benefits available.
Where can someone find reliable, up-to-date information about tax incentives applicable to tourism in Puerto Rico?
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Those who wish to learn about the tax incentives applicable to tourism in Puerto Rico can begin by consulting official sources, such as the website of the Puerto Rico Tourism Company, which provides general and reliable information about these programs and offers basic guidance. These sources help readers understand the broader framework of the incentives and their role within the tourism industry.
However, when it comes to evaluating a specific project, whether the development of a new lodging facility, the expansion of an existing business, or a tourism investment, general information is often not sufficient. In those cases, having specialized professional guidance is essential to assess the project’s eligibility, structure it properly, and make informed decisions about the incentives available.