Opportunity Zone Magazine Volume 1, Issue 3 | Page 72
72 OPPORTUNITY ZONE MAGAZINE | VOLUME 1 • ISSUE 3
PUERTO RICO’S RARE
POSITION IN THE OZ SPACE
By María de los Angeles Rivera
After decades of decreasing economic activity, Puerto Rico is an attractive jurisdiction for OZ investment
today, offering special incentives and favorable tax rates for investors in its 800 designated OZs.
Puerto Rico is a United States possession in the Caribbean
Sea. Its political situation was unfamiliar for many U.S.
citizens on the mainland until September 2017 when
hurricanes Maria and Irma lashed the small island. The
natural disaster and related aftermath caused by the storms
emphasized the need of investment in the infrastructure and
affordable and secure housing that the several years’ long
economic crisis had left unattended.
While those born on the Island are U.S. citizens, for several
provisions of United States law the Island is treated as a
foreign country. For example, entities organized under the
laws of Puerto Rico are considered foreign entities for United
States federal income taxes, while Puerto Rico born U.S.
citizens are considered nonresident aliens for U.S. estate and
gift tax purposes. These complicated circumstances support
the matchless position Puerto Rico has when investors are
looking for alternatives for their next investment.
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