Act Number 273 of September 25, 2012 (“Act 273”) provides tax incentives to international financial entities that set up operations in Puerto Rico (“PR”). Act 273 replaces, prospectively, the former International Banking Center
Regulatory Act, Act Number 52 of 1989 (“Act 52”), with the objective of improving the conditions for conducting international financial transactions in PR, while simultaneously boosting the Island’s economy.
International financial entities (“IFEs”) are licensed by the PR Office of the Commissioner of Financial Institutions (“Commissioner” or “OCFI”), and authorized to conduct certain Act 273 specified financial transactions (“Eligible IFE Activities”). Once licensed, an IFE can request a grant of tax exemption (“Tax Grant”) from the PR Department of Economic Development and Commerce, which will enumerate and secure the following tax benefits provided by Act 273 as contractual
rights (i.e., regardless of future changes in PR law) for a fifteen (15) year period:
1)to the IFE
2)to its shareholders