Client Alert

Embracing Out-of-State Remote Work in Puerto Rico

By: Angel Berberena, Esq.



December 19, 2024



Puerto Rico is experiencing a surge in remote work opportunities across various sectors, particularly in technology, customer service, marketing, and sales. This surge is largely driven by the island's ease of access to the US, its unique blend of work and leisure, and recent legal changes.

In addition to attractive tax incentives under Act 60, which offer significant tax reductions for businesses that export services and for individuals who become residents, Puerto Rico has invested in its infrastructure and legal framework to support and facilitate remote work.

Legal considerations for out-of-state remote employers and employees:

1. Act 52-2022: This law provides a framework for remote work in Puerto Rico, allowing nonresident employers, as defined by the Puerto Rico Internal Revenue Code, to hire remote workers on the Island without creating a tax nexus. This means that companies can employ remote workers in Puerto Rico without being subject to local corporate taxes, provided they comply with local labor laws and payroll taxes.
2.  Act 27-2024: This law complements Act 52-2022 by offering additional incentives for relocation, including temporary or partial exclusion from local laws; by providing clear guidelines for remote work; and by ensuring that employment relationships are governed by the terms agreed upon in the employment contract.
3. Tax Obligations: Remote workers in Puerto Rico are subject to local income taxes but are exempt from federal income taxes. This, in combination with preferential tax benefits under Act 60, makes Puerto Rico an attractive destination for remote workers looking to optimize their tax situation.
4. Insurance Requirements: As a rule, employers must provide insurance coverage that meets or exceeds local requirements for occupational and non-occupational accidents, disability, and other applicable insurances. This ensures that remote workers are adequately protected while working in Puerto Rico.
5. Unemployment Contributions: Employers must contribute to Puerto Rico's unemployment insurance unless the state law where the employer operates allows remote workers in Puerto Rico to claim benefits in that jurisdiction. This provision helps maintain a safety net for remote workers in case of job loss.

Puerto Rico offers a compelling mix of professional opportunities, lifestyle benefits, and financial incentives for remote workers. When combined with its beautiful landscapes, rich cultural heritage and warm climate, it is no wonder that more and more remote workers are choosing to call Puerto Rico home. 

Goldman Antonetti & Córdova, LLC stands ready to assist you and your business to adjust to Puerto Rico's regulatory and legal changes. If you need further assistance in this area, please contact any of the following members of our Firm:

Disclaimer: Although the information included in this document may concern legal issues, it is not a legal opinion or professional advice and clients shall not use it as such. We assume no responsibility or liability of any kind for any information contained herein, and we expressly disclaim all liability for any claim for damages arising from the use, reference to, or reliance on, such information. If legal or other expert assistance is required, the services of a competent professional should be sought.