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Vibrant, lively and colourful, the Caribbean nation of Puerto Rico welcomes filmmakers with loads of filming opportunities and generous financial incentives

Puerto Rico is a self-governing unincorporated territory of the United States located in the Caribbean and contemporary America. For decades, this place has been in political turmoil due to its constitutional status. Its culture also mirrors this split – where some locals espouse modern US statehood while others want outright independence.

Famous for its tropical beaches, sunsets, Latin music and dance, Puerto Rico reflects the stark difference in cultures adopted by its citizens. There is an amalgamation of ancient and modern everywhere – hip and happening restaurants spread across old Spanish forts, enormous shopping malls and glittering casinos juxtaposed against warm beaches, and stunning coral reefs. With tech-savvy workers, impressive locations, US-style services and a 40 per cent incentive, this country is ideal for filming and post-production.

Climate

Located in the tropics, Puerto Rico has an average temperature of 28 °C throughout the year, with an average minimum temperature of 19 °C and maximum of 30 °C. Temperatures do not change drastically across the seasons. The temperature in the south is usually a few degrees higher than the north and temperatures in the central interior mountains are always cooler than the rest of the island.

Studios & Post-Production

Studio production and post-production facilities have come a long way and all kinds of amenities and top-notch equipment are available for rental in Puerto Rico. Skilled labour is also available in plenty.

Incentives

Production Tax Credits

  • 40 per cent production tax credit on all payments to Puerto Rico resident companies and individuals
  • 20 per cent production tax credit on all payments to non-resident , including producers, directors, writers and talent

Preferential Tax Treatment

Persons engaged in qualifying film projects are eligible for the following preferential tax rates or exemptions:

  • Fixed income tax rate of between 4 per cent and 10 per cent
  • 100 per cent exemption on dividend taxes
  • 90 per cent exemption from municipal and state taxes on property
  • 100 per cent exemption from municipal license taxes, excise taxes and other municipal taxes.

Requirements

Qualifying film projects: feature films, short films, documentaries, television programmes, series in episodes, mini-series, music videos, national and international commercials, video games, recorded live performances and original sound track recordings and dubbing.

  • $ 100,000 minimum spend requirement per project ($ 50,000 for short films)
  • No principal photography requirements (full or partial development, pre-production and post-production may qualify). If 50 per cent or more of principal photography is shot on the island, development payments to Puerto Rico resident companies and individuals and non-resident ‘Above-the-Line’ can qualify
  • No per project or individual wage caps
  • No cap on credits for payments to non-resident: Payments made to non-resident Above-the-Line’ are subject to a 20 per cent withholding over their Puerto Rico sourced income.
  • The annual cap on credits for payments to Puerto Rico resident companies and individuals is $ 50 million (which may be expanded up to $ 350 million if incurred partially in a Film Development Zone)

Which projects are eligible?

At least 50 per cent of principal photography has to be in Puerto Rico or at least $ 1million should be paid to Puerto Rican residents. The credit can apply to non-Puerto Rican shoots if $ 700,000 is spent on Puerto Rican crews shooting abroad. A local production service company or consultant would have to do a Puerto Rican production budget before shooting.

Ways to access the tax credit

The Government of Puerto Rico, through Act No 362 of December 24, 1999, known as the Puerto Rico Law for the Development of the Film Industry, offers a tax credit equivalent to 40 per cent of budget items paid to Puerto Rico entity or resident or up to 50 per cent of the cash invested as equity in the project.

In order to ascertain the amount of tax credit that will be certified, you need to have a Puerto Rico budget. There are some production services companies or local UPMs available that you can to do this. You can advance 50 per cent of the estimated tax credit before shooting. In order to get the advance, you need to provide a letter of credit or a completion bond.

The tax credit is an incentive for investors in a Film Entity dedicated to producing a film project in exchange of stock or unit participations. There is a requirement that the Film Entity organises its financing structure in Puerto Rico. There are local tax consultants that could assist you in this process and will do this work for you.

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