Puerto Rico Info
Joined: 16 Nov 2006
Posts: 17
Home Country: puertorico
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 Posted: Sun Nov 19, 2006 10:28 pm Post subject: DOING BUSINESS IN PUERTO RICO / PUERTO RICO BUSINESS GUIDE |
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DOING BUSINESS IN PUERTO RICO
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Obshchestvo s Ogranichenoi Otvestvenosti
Minimum Capital Requirement: 0
City: San Juan
Registration Requirements:
Procedure 1. Check the uniqueness of the company name.
Time to complete: 1 day
Cost to complete: no charge
Procedure 2. Register the company at the Puerto Rico Department of State and obtain a business certificate.
Time to complete: 1 day
Cost to complete: USD 100 + USD 10 for the issuance of the Certificate of Existence
Comment: The company's certificate of incorporation is filed at the Corporations Division (Departamento de Estado - División de Corporaciones), PO BOX 3271, San Juan, P. R. 00904-3271. The certificate of incorporation generally sets forth the basic business purposes of the corporation, the address of the corporation, the number of shares in each authorized class of stock and the rights of stockholders in each of these classes. A corporation may be incorporated, come into existence and begin business operations within the same business day if all documents are duly filed.
The fee schedule is as follows: $0.01 for each share of authorized capital with par value up to 20,000 shares (the law assigns a $100 par value to each share for purposes of this computation); $0.005 for each share over 20,000 up to 200,000; $0.002 for each share over 200,000; $0.005 for each share of authorized capital without par value up to 20,000 shares; $0.0025 for each share over 20,000 up to 2,000,000; $0.002 for each share over 2,000,000. Minimum charge are $100.
Procedure 3. Apply for an employer identification number (EIN) with the Internal Revenue Service of the United States.
Time to complete: 1 day
Cost to complete: no charge
Comment: Social security and medicare taxes are collected by the Federal government through the Internal Revenue Service of the United States of America. EIN is used for all tax purposes.
Notify the EIN to the P. R. Treasury Department (Form 4809). Each employee must fill the form 499-R-4, regarding the P. R. Tax Withholding.
Procedure 4. Apply for a municipal business license (patente municipal).
Time to complete: 1 day
Cost to complete: no charge
Comment: A Commonwealth law establishes the right of every municipality to impose and collect Municipal License Taxes (Patentes Municipales). The tax is based on volume of business. Most for-profit activities that generate revenues in excess of $5,000 per year are covered. File the application with the Director of Finances at City Hall (Director de Finanzas - Alcaldía Municipal).
Procedure 5. Request unemployment and disability account numbers from the PR Department of Labor and Human Resources (Departamento del Trabajo y Recursos Humanos).
Time to complete: 1 day
Cost to complete: no charge
Comment: Unemployment tax is administered by US IRS and PR Department of Treasury. Puerto Rico Disability taxes are imposed and administered by "Negociado de Seguro por Incapacidad No Ocupacional de los Trabajadores" (SINOT).
Procedure 6. Subscribe to a workmen's insurance policy.
Time to complete: 1 day
Cost to complete: no charge
Comment: The policy is issued by Corporación del Fondo de Seguro del Estado (State Insurance Fund Corp), telephone (787) 793-5959. Rates vary depending upon the type of activity.
Procedure 7. File with the Registry of Merchants and Business, the Commercial Development Administration
Time to complete: 1 day
Cost to complete: no charge
Comment: According to the Mandatory Registry of Merchants and Businesses Act, Law No. 171 of August 12, 2000, all natural and juridical persons engages in business in Puerto Rico with annual sales in excess of US $50,000 (including service providers) must register in this Registry, maintained by the Commercial Development Administration. The informative return must be filed on or before January 15 of each year. The law's regulation (No. 6620) imposes some hefty fines for lack of registration.
TAXES
Puerto Rico sales tax is 1.5%; however, there is a 5% jewelry tax. 11% tax on room charges in hotels with casinos, 9% tax on hotels without casinos, and 7% on small inns.
All inbound shipments to Puerto Rico are subject to a local excise tax. Merchandise and/or articles arriving from the U.S. that will be sold, consumed, given away, and/or remain in Puerto Rico are subject to a 6.6% Puerto Rico excise tax that is calculated from the commercial invoice value. This is payable upon entry to Puerto Rico.
Puerto Rico has it own tax system. Although it is modeled after the U.S. system, there are differences in law and tax rates.
The Puerto Rico tax system is based on self-assessment. Taxes are paid to the state. In addition, a premium is paid to the Social Security. Individual taxpayers are required to file an annual income tax return when minimum-income thresholds are met. They report taxable income and deductions, compare their final tax liability to any income tax withheld or estimated tax paid, and determine any balance due or overpayment of tax due from the Treasury.
For information about the filing taxes in Puerto Rico contact the Bureau of Income Tax at the following address:
Negociado de Asistencia
Contributiva y Legislación
Departmento de Hacienda
P.O. Box 565
San Juan, Puerto Rico 00902-6265.
The telephone number is (787) 721-2020, extension 3611. |
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