Mohni Pabrai figures he'll save as much as $10 million in tax a year, as well as half a million in operating costs through his qualification under Act 20 to set up a new private equity venture in Puerto Rico.
Act 20 entices hedge funds, family offices, professional service firms and even software developers to locate there by taxing their corporate profits from exported services at a flat 4% rate and allowing those profits to be paid out to the owners free of Puerto Rico income tax. So far the government has okayed 346 export companies, with 400 approvals expected this year.
Excerpted from https://www.forbes.com/sites/laurengensler/2015/02/11/puerto-rico-new-age-tax-haven/#db2925a57c96