‍Creative Industries Incentives Under Puerto Rico’s Act 60-2019

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Legal Framework

Puerto Rico’s Incentives Code (Act 60-2019) unified more than 70 prior incentive laws—including the former Film Industry Economic Incentives Act (Act 27)—into a single, comprehensive regime.  Within this framework, the Creative Industries program consolidates incentives for film, television, music, and interactive media under the oversight of the Department of Economic Development and Commerce (DDEC) and its Puerto Rico Film Commission.

Procedurally, all creative-sector decrees are processed under DDEC Regulation MO-DEC-012, which standardizes application, evaluation, and compliance requirements across Act 60 programs.

Scope of Eligible Activities

The Creative Industries chapter covers the production and post-production of feature films, television series, commercials, documentaries, music videos, and digital or streaming content, as well as qualifying video-game and interactive-media projects.  Eligible expenditures include pre-production, production, and post-production costs incurred in Puerto Rico and payments to Puerto Rico residents for qualified services.

The sector also encompasses event production, festivals, and certain advertising and promotional activities linked to audiovisual content, as detailed by the Puerto Rico Film Commission and Invest Puerto Rico.

Core Tax Benefits

1. Production Tax Credit – 40 %
Producers may claim a 40 percent transferable tax credit on all eligible payments to Puerto Rico residents and companies for production services, talent, and goods used on the Island.

2. Non-Resident Talent Credit – 20 %
An additional 20 percent credit applies to qualified payments to non-resident individuals providing creative or technical services, subject to program limits.

3. Co-Production Incentive – up to 15 %
Co-productions between Puerto Rican entities and international studios may obtain an extra 15 percent credit on eligible resident expenditures.

4. Transferability and Monetization
Credits are transferable and tradable, allowing producers to sell them to local taxpayers or use them to offset Puerto Rico income-tax liability.

Application and Decree Process

Applicants submit projects to the Puerto Rico Film Commission with a proposed budget, production plan, and evidence of financing.  Upon technical evaluation and approval, DDEC issues a Decree of Film Tax Credits specifying the authorized credit percentage, eligible-expense categories, and compliance conditions.

The decree process follows the steps outlined in DDEC’s How to Apply Guide:

• Application submission before principal photography;
• Confirmation of financing and insurance;
• Execution of the decree agreement with DDEC; and
• Post-production audit and certification of eligible spend.

All qualifying expenses must be verified through a CPA audit, and credits are issued after DDEC approval.

Compliance and Reporting

Decree holders must:

• Maintain accounting records segregating Puerto Rico and non-Puerto Rico expenditures;
• Provide periodic cost reports to DDEC and the Treasury Department;
• Credit Puerto Rico in production titles or end credits as required by decree terms; and
• Retain proof of payments, invoices, and residency certifications for all qualifying crew and vendors.

Failure to meet decree milestones or audit requirements may result in reduction or recapture of the credit.

Recent Program Developments

In 2024–2025, the Puerto Rico Film Commission updated its administrative materials to align with Act 60 and global industry trends.  The Commission’s Workforce Development Fund Brochure highlights training programs supported by credit proceeds and emphasizes collaboration between production companies and local educational institutions.

DDEC also amended certain decree-processing provisions through updates to its legal regulations, including clarifications on credit transfers and compliance review procedures (Regulation 9414 Amendment 9248).

Strategic Considerations for Producers and Investors

• Budget Alignment: Confirm early that planned spending meets the Film Commission’s definition of “eligible production expenditures.”
• Financing Structure: Credits are transferable but subject to timing; coordinate with lenders for bridge financing.
• Local Partnerships: Co-productions with Puerto Rico-based entities may qualify for additional credits and facilitate residency compliance.
• Timing and Cap Management: Annual fiscal caps and application windows apply; early submission maximizes access to available credit allocations.

MZLS advises production companies, studios, and investors on structuring, financing, and compliance for creative-industry projects under Act 60. Learn more about our Business & Commercial Law and Litigation & Dispute Resolution services, and explore additional analyses on MZLS Insights.

Conclusion

Puerto Rico’s Creative Industries program under Act 60-2019 positions the Island as a competitive destination for film, television, and interactive-media production. With transferable credits of up to 40 percent on local spend and robust administrative support through DDEC, producers can integrate Puerto Rico into global production pipelines while contributing to local workforce and infrastructure development.

For assistance with Act 60 decree applications, audits, or transactional structuring, contact the MZLS Incentives and Economic Development Practice at www.mzls.com.

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