The Definitive Guide to Act 60 for Venture Capitalists

Structuring a venture capital fund to comply with Act 60 is a complex undertaking that demands precision. The choice between a Puerto Rico-based entity and a foreign entity with a PR presence has significant tax implications. Our review process is designed to analyze your fund’s structure, ensuring it aligns with the stringent requirements for sourcing income to Puerto Rico, which is critical for eligibility. We can help identify potential issues in your partnership agreements and operating documents that could jeopardize your tax benefits. A properly structured fund is the foundation of a successful Act 60 strategy, and our comprehensive analysis, which has been refined by reviewing thousands of cases, provides the assurance you need. Traditional CPA firms may charge upwards of $25,000 for this level of review, but our AI-driven platform makes it more accessible.

For venture capitalists, the treatment of capital gains and carried interest is paramount. Act 60 offers a 0% tax rate on certain Puerto Rico-sourced capital gains, but the rules are intricate. Our system meticulously examines your investment portfolio and transaction history to help ensure gains are properly sourced and documented. We also analyze the structure of your carried interest, which may be treated as service income subject to the 4% Export Services tax rate or as capital gains. This distinction is critical and often a point of confusion. Our CPA-verified logic is designed to catch subtle errors that could lead to significant tax liabilities. According to the GAO Report GAO-26-107225, proper documentation and sourcing are key areas of IRS scrutiny, making a thorough second opinion essential.

While many decree holders rely on word-of-mouth, the stakes for VCs are too high for anything less than expert verification. The Act 60 compliance market is digitally underserved, leaving many without access to specialized tools. Our platform fills that gap, offering a review that is both comprehensive and verified by qualified CPAs. We review over 200 compliance rules, from the bona fide residency tests (as detailed in IRC Section 937) to the nuances of income sourcing for intangible assets. This provides a level of scrutiny that goes beyond what a single practitioner might offer, giving you confidence that your tax position is sound. Think of it as an institutional-grade compliance check for your most critical financial strategies.