business in puerto-rico

How to set up a business in Puerto Rico: A step by step guide and cheat sheet

In this list, you will find most of Puerto Rico’s requirements in order to start a business.

One of the most important points is planning and decide how to organize your business. Will your business operates and would preferably do business as a: sole-proprietorship, a corporation, a partnership, a limited liability partnership (LLP), limited liability company (LLC), among many other options. This is the first issue where you need to be aware of. This as you also need to choose your tax treatment election either to be taxed as an individual, a corporation or applying for tax decrees, such as Act 20, Act 22 or Act 273 among others and if applicable. For that, we might be of help (contact us).

If you have already decided your entity’s structure, then you should proceed to:

Register your business with governmental authorities:

  • Register your Corporation (Inc., Corp.), Limited Liability Partnership (LLP), Limited Liability Company (LLC), or any other corporate vehicle at the Puerto Rico Department of State.
  • Register with the Internal Revenue Service to obtain your Employer Identification Number. This will be your ID for most of the following procedures.
  • Register with Hacienda as a taxpayer. In this SURI site of Hacienda, you should be able to register online for the Sales & Use Tax (“IVU”) and get your Merchant Registry instantly.
  • Register with the Municipalities once you identify the place of where you will do business from and obtain a Use Permit. At this point, and if you have the budget we advise you to hire a permit handler, contact us, we will get you in contact with several of them for quotes.
  • You will also need to register with the Municipality for the Volume of Business tax (or the “patente municipal”), and the Municipal Sales & Use Tax (“IVU Municipal”).

At this point, you should also open your bank account. If you consider that you may employ someone for you in your establishment, you will have to register with the Department of Labor and Human Resources and/or the State Insurance Fund. Considering any other special regulations you can now ‘start’ operations.

While this should work as a workflow of the process of starting a business in Puerto Rico, we highly recommended you to contact us for further assistance.

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