Step I Your first step to conduct business in the Commonwealth of Puerto Rico is to determine the kind of business structure best suited for your commercial initiative. Puerto Rico General Corporation Act allows the creation of island-based and foreign-owned private corporations, small closely-held corporations, partnerships, and limited liability companies, for any lawful purpose. A domestic corporation is created in accordance with Puerto Rico Laws and foreign corporations are organized in accordance to the laws of any other state or country. They require authorization from Puerto Rico's State Department, prior to conducting any business on the Island. The chosen legal entity has to comply with Department's annual reporting deadline and applicable fees, to keep a good standing. Step II New business entity have to register with Puerto Rico's Treasury Department, known as "Hacienda", to be included in the Merchant's Registry, in order to comply with monthly sales tax collection, and payments. Some eligible businesses may obtain an exemption from sales tax collection. Depending on the location of the business, a municipal license is required by one of seventy eight municipalities on the Island. The business will pay the license fee or "patente municipal", and comply with local zoning permit requirements. Every business will be subject to various reporting requirements. Step III If the business will have multiple employees, it will be required to obtain unemployment and disability insurance, as well as workmen's compensation insurance from Puerto Rico's Labor and Human Resources Department and the State's Insurance Fund. Keep in mind that Puerto Rico's labor laws are complex and afford employees many benefits, not found in most jurisdictions, on top of applicable federal labor laws and regulations. Step IV In addition, there may be industry-specific requirements by various governmental agencies authorized by law to regulate business activities. Finally, there are economic incentives to promote business on the Island. Eligible manufacturing businesses may obtain tax credits or deductions. There are incentives for designated Island-based service providers to foreign and mainland companies, and eligible entities may obtain a 4% fixed income tax rate on net income, a 90% exemption from property taxes and a 60% exemption from municipal permit fees. Some businesses may obtain other tax deductions authorized by Puerto Rico's Department of Economic Development. Step V We can help you comply with complex state law and regulation, including compliance with Puerto Rico Trademarks Act (Act No. 169 (2009)) and the General Corporation Act (Act No. 164 (2009)). We may also assist you with Puerto Rico's Treasury Department Business and Employer requirements: Including SS-4R and 4809 Form filings and Merchant's Registry application. We can assist you with compliance requirements set by Puerto Rico's Department of Labor and Human Resources, and the Municipal Business License application. Including procurement of temporary disability insurance and workmen's compensation insurance, as mandated by local law. Step VI We have experienced legal professional with practical knowledge and expertise in Civil Litigation, Compliance, Commercial Matters, Employment and Administrative Law. Our staff has worked with Fortune 500 companies, as outside counsel, and collaborated with the implementation of legal department's best practices for problem solving complex legal issues. We can advise clients about their legal rights and responsibilities, compliance matters and unfair and deceptive practices regulation. Our litigation team represents clients throughout the litigation process and all administrative proceedings.