Entity Formation in Puerto Rico

Ready for a permanent Puerto Rico presence, or chasing an Act 60 incentive decree? We help you incorporate the right way, and stay alongside you for the accounting, payroll, and dual federal/territorial compliance that follow. Independent advice, including telling you when it is too early.

  • Independent advice
  • Vetted partners
  • Honest timing

What incorporating in Puerto Rico means

A Puerto Rico for-profit corporation, or an LLC, is the standard vehicle for a permanent business presence, formed by filing a Certificate of Incorporation (or Certificate of Formation for an LLC) with the Puerto Rico Department of State, not by notarial deed. When you form one, you become the legal employer and operator in Puerto Rico, with full control and no per-employee EOR fees, in exchange for the setup time, a registered-agent requirement, and the ongoing federal and territorial filings that follow.

01

Your own company

Your own Puerto Rico corporation or LLC makes you the legal employer and operator, with full control of employment terms and a local presence.

02

Lower cost at scale

No per-employee EOR fees. For permanent, proven headcount, owning the entity is more cost-effective than ongoing EOR arrangements, and it is the prerequisite for an Act 60 incentive decree.

03

Setup takes time

Incorporation typically takes one to three weeks, and you cannot employ anyone until Department of State registration completes. Timing the move matters, which is why many companies bridge with an EOR first.

How incorporating in Puerto Rico works, step by step

From structuring the company to operating it compliantly.

01 — Structure & prepare

We confirm incorporation is right for you, then reserve the company name, prepare the Certificate of Incorporation, and arrange your registered agent and Puerto Rico office address.

02 — File & register

The Certificate of Incorporation (or Certificate of Formation for an LLC) is filed with the Puerto Rico Department of State, online, by mail, or in person, with standard processing of roughly one to three weeks and paid same-day or 2-hour expedite options available. There is no notarial-deed requirement and no statutory minimum share capital comparable to a civil-law jurisdiction’s scheme.

03 — Register the company

Beyond Department of State registration, the company must separately register with Hacienda’s Registro de Comerciantes before it can legally invoice or collect IVU, obtain a federal EIN, and, for eligible activities, file an Act 60 tax-incentive decree application with the DDEC, so you can operate and employ compliantly on both the federal and territorial sides.

04 — Operate & stay compliant

Business bank account, then ongoing accounting, payroll, filings, and annual reporting, all of which we can run for you.

What incorporating in Puerto Rico costs

Two kinds of cost: the one-off formation, and the ongoing operating obligations. Puerto Rico’s formation cost is low; the real commitment is the ongoing dual federal/territorial compliance. We give you a clear figure before you commit.

Formation & registration

No notarial deed and no statutory minimum share capital of the kind a civil-law jurisdiction requires. The Certificate of Incorporation filing fee runs around USD 150, with standard processing of one to three weeks (faster with a paid expedite). A registered agent and Puerto Rico address are required on the filing.

Corporate tax

18.5% flat normal tax plus a graduated surtax from 15% to 19% on income above USD 75,000, combining to a top nominal rate near 37.5%. An Act 60 tax-exemption decree can reduce this to a fixed 4% (or 2% for qualifying small businesses in their first 5 years, reverting to 4% after) on eligible export-services income instead.

Sales tax (IVU)

Puerto Rico’s sales tax, the IVU, runs 11.5% combined (10.5% Commonwealth rate plus 1% municipal rate). A reduced 7% sales tax rate applies to prepared meals, and a reduced 4% rate to certain qualifying B2B professional services. Registration with Hacienda’s Registro de Comerciantes is required before you can legally collect it.

Ongoing obligations

Accounting, monthly payroll (federal FICA/FUTA plus Hacienda territorial income tax), IVU and corporate tax filings, a Department of State annual report by 15 April (audited financials above USD 3 million turnover) for a corporation, or a flat USD 150 annual fee instead for an LLC, plus municipal license tax (patente municipal, 0.20% to 0.50% of gross receipts, varying by municipality), all of which we can manage for you.

Why form your Puerto Rico company through Bradford Jacobs

Why companies incorporate in Puerto Rico through us rather than a one-off formation agent.

We advise you on the best time to incorporate

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

End-to-end, not just the paperwork

We do not disappear after registration. We stay on for the accounting, payroll, and compliance, so your company runs, not just exists.

  • Beyond registration
  • Ongoing compliance
  • One team throughout

The right specialists, in place

Registered-agent, tax, and accounting partners we have vetted and worked with, coordinated for you, so the process moves and nothing gets missed, including the Act 60 decree track if you are eligible.

  • Vetted specialists
  • Coordinated for you
  • Nothing gets missed

Two decades of formations

Two decades forming and running entities across global markets, with the local knowledge to keep you compliant and out of the common traps.

  • Incorporations
  • Legal & tax partners
  • Traps avoided

We run it after you form it

Incorporation is the start, not the finish. We stay on for accounting, payroll, tax filings, and annual accounts, so your company operates from day one without you building a local finance function.

  • Full back office
  • Accounting & payroll
  • Annual accounts

The incorporation trap nobody flags

A growing business hits a good quarter and someone says, let us just set up a proper Puerto Rico company. It sounds like setting up in any US state. It usually is not, yet. Here is what people expect against what happens in practice.

Employment & payroll obligations

Expectation: a Department of State filing means you can start invoicing. Reality: the corporation exists once the Department of State approves the filing, often within days, but you cannot legally invoice or collect IVU until you separately register with Hacienda’s Registro de Comerciantes, and most municipalities require their own patente municipal license before you can operate there at all. If you are chasing an Act 60 decree, that application runs on the DDEC’s own track, entirely separate from the corporate filing, and is not automatic just because the entity exists.

Tax, filing & reporting obligations

Expectation: we can always reverse it. Reality: dissolving a company needs a formal winding-up process with the Department of State and Hacienda. And once it exists, the obligations do not stop: an annual report or flat fee to the Department of State, monthly federal and Hacienda payroll filings, corporate tax and IVU returns, and municipal license tax filings every year. None of this is a reason not to incorporate. It is a reason to do it at the right time, with the right partners already in place.

What we handle for your company

Beyond incorporation, we can run the full back office for your company.

Compliant payroll

Compliant Puerto Rico payroll and employment administration, issued and maintained for you.

Payroll & filings

Monthly payroll run, with federal FICA/FUTA and Hacienda territorial income tax calculated, withheld, and filed each month.

Statutory benefits

All statutory benefits administered: vacation (1.25 days/month), sick leave (1 day/month), the mandatory Christmas bonus, and Law 80 just-cause protection.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on incorporating and running a company in Puerto Rico.

How long does it take to incorporate in Puerto Rico?

Typically one to three weeks once documents, a registered agent, and the Puerto Rico address are in place, with paid same-day or 2-hour expedite options available. You cannot legally employ anyone until Department of State registration completes, which is why timing matters and why many companies bridge with an EOR first.

No. Unlike many civil-law jurisdictions, Puerto Rico corporations and LLCs form by filing directly with the Department of State, with no notarial-deed requirement and no statutory minimum share capital of that kind. The real cost is the ongoing accounting, payroll, and dual federal/territorial compliance, which we can run for you.

Yes. There is no residency or citizenship requirement for shareholders, members, or directors; a non-resident individual can be sole owner and sole director, managing remotely. You will need a registered agent and a Puerto Rico address, which we arrange.

Incorporate when you have permanent, proven headcount, want full control, or are pursuing an Act 60 incentive decree, and the numbers justify the ongoing costs. Use EOR while you are still validating the market or need people working quickly. Most companies start with EOR and incorporate later. We advise on the crossover.

Accounting, monthly payroll (federal FICA/FUTA plus Hacienda territorial income tax), corporate tax and IVU filings, a Department of State annual report by 15 April (or a flat USD 150 annual fee for an LLC), and municipal license tax filings. We can run all of it so the entity stays compliant without you building a local finance function.

Yes, and it is how most companies use us. Beyond incorporation we provide ongoing accounting, payroll, and compliance, so your Puerto Rico company operates smoothly from day one without hiring locally for back office.

Ready to form your company in Puerto Rico?

Tell us your plans for Puerto Rico and we will tell you honestly whether now is the time to incorporate, then handle it end to end if it is, usually scoped within a day. No formation-mill upsell, just the right call.

Tax, company, and labour data verified July 2026 (Departamento de Hacienda, the Puerto Rico Department of State, Departamento del Trabajo y Recursos Humanos, PwC). Figures change; we confirm the current position when we scope your formation.