Act 60 for Young Entrepreneurs and Physicians: What Still Applies

Act 60-2019 (Ley 60, Puerto Rico's Incentives Code) has two incentives for individuals that raise a lot of questions: the one for young entrepreneurs and the one for qualified physicians. The first is still open and is simple. The second no longer accepts new applications, but many physicians hold active decrees that come with annual obligations.

This guide summarizes the current text of the Código de Incentivos (Incentives Code) as revised by the Oficina de Gerencia y Presupuesto (Office of Management and Budget) on July 16, 2026.

Young entrepreneurs

Who is a "young entrepreneur"

Section 1020.02(a)(9) defines a young entrepreneur as a Puerto Rico resident ages 16 to 35 who wants to create and run a new business in Puerto Rico over the long term. In addition, the person must have earned a high school diploma or an equivalent certification from the Departamento de Educación (Department of Education), or be studying to earn it.

The benefit is not granted through a traditional decree. It is granted through a Special Agreement for the Creation of Businesses (Acuerdo Especial para la Creación de Empresas) that the young person signs with the Secretary of the DDEC (Department of Economic Development and Commerce). In that agreement, you commit to developing your business, creating jobs and meeting other conditions.

What benefits it gives

Section 2100.01 grants the new business, for 3 years from the start of operations:

• Income tax exemption on the first $500,000 of taxable net income. Anything over $500,000 is taxed at ordinary rates.
• Full exemption from personal property tax on the business.
• Exemption from municipal taxes, such as the patente (municipal license tax).

Watch out for dividends. If the business is a corporation, the shareholders do pay tax on the dividends they receive, under the Código de Rentas Internas (Internal Revenue Code of Puerto Rico).

Business requirements

To receive the benefits, the business must meet Section 2100.01(c):

1. Start its main commercial operation on or after the date of the application. It does not work for a business that was already operating.
2. Be operated exclusively by young entrepreneurs.
3. Not be the result of operating through affiliates or of a reorganization.
4. Be limited to one new business per young entrepreneur.

In addition, you cannot be covered by another law or chapter of the Code that gives you tax or economic incentives. If you take another incentive during the agreement, you are considered to have given up this one.

Fees and how to apply

You file the application on the DDEC Incentives Portal. In August 2025, the DDEC announced that accepting the agreement carries a $55 fee, which it waived for those who complete the process in person at the "La Red" events the DDEC organizes.

Even if you are exempt, you must keep up with your registrations and returns: the Registro de Comerciantes (merchant registration), the patente municipal (municipal license tax) and the return you file with the Departamento de Hacienda (Puerto Rico's Treasury Department, "Hacienda").

Qualified physicians

The decree no longer accepts new applications

Section 2021.03 provides that the DDEC accepted applications for new physician decrees until June 30, 2022. After that date, no more are accepted. Act 52-2022 set that date. The only current exception is for cardiovascular surgeons who provide full-time services to the Centro Cardiovascular (Cardiovascular Center), with a certification from the Secretary of Health. That certification had to be requested by December 31, 2024, although the DDEC can grant the decrees later.

If you already have a decree, you keep your benefits under its terms.

Who is a "qualified physician"

Under Section 1020.02(a)(10), the term includes anyone admitted to practice general medicine or any specialty, podiatry, audiology, chiropractic, optometry or dentistry, who practices full time. Full time means at least 100 hours a month of medical services in a hospital, agency, private office or accredited medical school.

What benefits active decrees have

Section 2022.04 grants:

• Fixed 4% rate on eligible income from professional medical services provided in Puerto Rico.
• Exempt dividends up to $250,000 per tax year when they come from eligible income of a medical services business, including for the alternative basic tax.
• 15-year term, with a possible 15-year extension. The law set June 30, 2022, as the deadline to request that extension.
• No $10,000 donation. Section 2021.03(b) exempts physicians from the annual donation that resident investors must make.

The 180 hours of community service

To keep the decree, the physician must provide the equivalent of 180 hours a year of unpaid community service, under the rules of the Departamento de Salud (Department of Health) (Section 2023.02(b)). Eligible services include teaching in hospitals and medical schools, serving areas with a shortage of services, taking shifts at selected hospitals, giving prevention seminars, or serving disadvantaged populations through nonprofit organizations.

Paid, under certain contracts. You can also meet the requirement with paid work, by providing services under contract with the Plan de Salud del Gobierno (the government health plan). Act 128-2026 (July 2026) added the Corporación del Fondo del Seguro del Estado (State Insurance Fund Corporation), the Administración de Compensaciones por Accidentes de Automóviles (Automobile Accident Compensation Administration), ASSMCA (the mental health and addiction services agency) and the Programa de Salud Correccional (Correctional Health Program).

Student loan repayment program

Separately from the decree, Section 2022.06 creates a program, subject to available funds, that can cover up to $65,000 of student debt for physicians, dentists, veterinarians and health researchers who commit to practicing in Puerto Rico for 7 consecutive years. If you fail to comply in the first two years, you repay 100%. In the third year, you repay 70%, and after that the percentage drops 5% per year.

The annual report

Both young entrepreneurs and physicians must file an annual exempt business report (IANE, for informe anual de negocio exento) on the Incentives Portal.

• Tax year 2024. For the first time, the DDEC opened a specific IANE for physicians and another for "other industries" that includes young entrepreneurs. The physicians' report was due November 15, 2025. For several industries new to the system, the DDEC extended the date to January 15, 2026.
• Tax year 2025. According to DDEC Bulletin 2026-005 (Boletín Informativo), the due date for calendar-year decrees under the Code is November 16, 2026 (the 15th falls on a Sunday), unless your decree says otherwise.
• Fines. If you do not file, the Portal imposes an automatic $1,000 fine, another $5,000 if you do not pay the first within 15 days, and the DDEC can start revocation.

Read the full guide to the decree annual report.

787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.