Puerto Rico Corporation
Everything You Need to Know About Puerto Rico Corporations:
Puerto Rico Incorporation Options
Do It Yourself
Sign up for a free account and use our online tools to start your Puerto Rico corporation today. Includes Puerto Rico incorporation and maintenance walkthrough and company document creation. All for free—just pay the relevant fees.
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How to Incorporate in Puerto Rico
To start a corporation in Puerto Rico, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file Certificate of Incorporation with the Department of State. You can file online or by mail. The certificate costs $150 to file. Once filed, this document formally creates your Puerto Rico corporation.
Per 14 L.P.R.A. § 3542 (2019), every Puerto Rico corporation must appoint a registered agent (also known as a “resident agent” or “agente residente”). You don’t need to hire a registered agent, but if you do, make sure your registered agent will list their address on your certificate wherever possible to ensure maximum privacy.
If you’re starting a new business, you probably already know what you want to name your corporation. But you’ll need to know if your preferred name is available. To find out, visit https://prcorpfiling.f1hst.com/CorporationSearch.aspx and search until you find the perfect name for your corporation.
Once you know who your registered agent will be and what your corporation name is, you’re ready to file your Puerto Rico Certificate of Incorporation. Follow along with our filing instructions below:
Filing the Puerto Rico Certificate of Incorporation
Learn more about each Certificate of Incorporation requirement below. Note that the information you provide becomes part of the public record—permanently.
Better yet, skip the form entirely and hire us to incorporate your Puerto Rico business. We provide a free business address to list whenever possible throughout the filing to better keep your personal address private. And for the cheapest way to start a business? Pay just $49 out the door with our VIP monthly payment option.
1. Corporation Name
Your name must include one of the following words or abbreviations: Incorporado, Corporación, Incorporated, Corporation, Corp. or Inc. Tip: Most businesses keep it simple with “Corp” or “Inc.”
2. Designated Office
List your corporation’s physical Puerto Rico address (and mailing address if different).
3. Resident Agent and Address
Your Puerto Rico registered agent must be available to accept legal notifications on behalf of your business at a physical address in Puerto Rico. Tip: When you hire Northwest, our information will go here.
Your purpose is the primary business activity you plan to engage in. You can simply state that the purpose is to “engage in any lawful acts or businesses for which corporations may be established pursuant to 14 L.P.R.A. § 3502.”
5. Authorized Shares
For each class, list the number and par value of each share. Par value (or “face value”) is the value listed on stock certificates—typically the lowest value at which the share will be sold. If you have multiple classes of shares, also indicate the total shares of all classes.
6. Share Rights and Limitations
Explain any conditions, preferences, rights, restrictions or limitations for each share type.
7. Puerto Rico Incorporator
Your incorporator signs and submits your Certificate of Incorporation. Incorporators must include their names and addresses. Tip: We’ll be your incorporator when you hire Northwest.
If your incorporator’s powers terminate upon filing (i.e. if your incorporator isn’t a director), list the names and addresses of who will serve as directors at the first annual meeting.
9. Term of Existence
How long do you want your corporation to exist? Your can choose “perpetual” (unlimited), “indefinite” (existing until a particular event) or “specific date” (which you’ll have to enter). Tip: Most corporations are perpetual.
10. Effective Date
When do you want your corporation to start? You can either start on the date of filing or choose a specific date up to 90 days in the future—for example, to line up with the start of a tax period.
11. Email Addresses
Like all the information in your Certificate of Incorporation, the email you list will become part of the public record. Tip: Avoid an inbox full of spam, hire Northwest, and you can list our email address here.
Why Have a Registered Agent Form Your Puerto Rico Corporation?
Professionals in Puerto Rico hire registered agent services like Northwest Registered Agent for incorporation—but why?
Standard filing companies don’t have employees or offices in every state and Puerto Rico. But as a national registered agent, it’s a requirement for us, which is a benefit for our clients. Our office is in San Juan, PR. We’re on a first name basis with the people who work in the Department of State. We know all the fastest filing methods, which translates to fast, professional service—without extra fees.
As your registered agent, we list our San Juan registered office address on your corporation’s formation documents. Why? If you’re starting a business from your apartment in Ponce, do you really want your apartment address as your business address? (Hint: the answer is no.) We’ll list our address, so you don’t have to list yours. Plus, we never sell your data. We don’t list your personal information on filings if we don’t have to. It’s all standard and part of our commitment to Privacy by Default®.
Free Mail Forwarding and Business Address
We already accept your legal mail—so why not take it a step further? Across the country, we include limited digital mail forwarding for your regular mail too (5 pieces of regular mail a year; $15 a doc after that). Plus, you can list our address as your business address. That means you can have all business mail routed through our office. With both mail forwarding and a business address included, you get a level of security unmatched in the formation industry.
And now, try our in-house Northwest Phone Service for 60 days, free of charge with our incorporation service. Get a virtual phone number with your choice of area code, make and receive calls from any device, and more—for just $9 a month.
We know the in’s and out’s of each state and jurisdiction—and we use this knowledge to help you when you need it most. Our team of Corporate Guides® has over 200 local business experts. You can call or email us for answers to all your questions about your corporation in Puerto Rico. Our Corporate Guides are dedicated solely to helping you with your business—not selling you services or meeting quotas.
What Do I Do After My Puerto Rico Corporation Is Formed?
After your Puerto Rico Certificate of Incorporation are approved, you still have a few more important steps to take, including getting an EIN, drafting bylaws, holding your first meeting, opening a bank account, and learning about reporting and tax requirements.
Get an EIN
Your federal employer identification number (commonly known as an EIN or FEIN) is similar to a social security number for your business. The IRS assigns these numbers and uses them to easily identify individual corporations on tax filings, including federal corporate income tax returns.
Why does my Puerto Rico corporation need an EIN?
The IRS requires corporations to get an EIN for their federal tax filings, and the Puerto Rico Department of Treasury requires an EIN for their business registration. You may also be asked for your EIN when opening a bank account, securing a loan, or applying for local business permits and licenses.
How do I get an EIN for my corporation?
You can get an EIN directly from the IRS. The application is free, and most businesses can apply online. However, if you don’t have a social security number, you’ll need to submit a paper application form. Can’t bear to fill out yet another application? Hire Northwest to get your EIN for you. Just add on EIN service during checkout when you sign up for our incorporation service. Or choose our VIP service—an EIN is included.
Write Corporate Bylaws
Bylaws are the internal rules you set for your business. They put into writing how decisions will be made and who gets to make those decisions. All the major organizational processes and procedures for your corporation will go in your bylaws.
Do I need bylaws for my Puerto Rico corporation?
14 L.P.R.A. § 3508 (2019) notes that bylaws may be adopted by the incorporators, initial directors of a corporation, or by the board if no payment for shares has yet been received. The statutes, however, don’t specifically require the adoption of bylaws.
However, corporate bylaws are important internal documents, and most corporations draft bylaws and keep them with other corporate records, such as meeting minutes and resolutions.
What should bylaws include?
Corporate bylaws cover basic policies and procedures for issues such as company finances and management. Bylaws should cover a range of topics, answering key questions like those below:
Meetings: When and where will meetings for shareholders and directors be held? How many attendees are required to transact business? What are the procedures for voting or proxy voting? How do you call a special meeting? What actions can be taken without a meeting?
Stock: How are stock certificates issued and transferred? How is voting affected by issues such as corporate stock owners or fractional shares?
Directors and officers: How many directors must there be? Which officer positions are required? What powers do they have? How do you fill a vacancy or remove a director or officer?
Finances: What are the procedures for retaining profits, issuing dividends, and paying bills? Who can withdraw money from the corporate bank account or sign checks?
Records: Where is the corporate book to be kept? What information will be maintained? How are requests for review or access honored? Can records or copies be kept or distributed digitally?
Amendments and emergencies: Who can amend bylaws and how? Can emergency bylaws be adopted in the case of disaster?
Puerto Rico bylaws can make other provisions as well, assuming additions are in accordance with local laws. For example, 14 L.P.R.A. § 3562 (2019) states that bylaws can specify the qualifications required for corporate officers.
How do I write bylaws?
Creating bylaws can be overwhelming—where do you start? Northwest can help. We give you free corporate bylaws when you hire us to form your Puerto Rico corporation. We know what kinds of topics and questions corporations need to address, and we’ve spent years refining and improving our forms. We offer many other free corporate forms as well, including templates for resolutions and meeting minutes.
Hold an Organizational Meeting
An organizational meeting is the first official meeting of the corporation after the business is legally formed with the commonwealth. At this meeting, bylaws are adopted, officers are appointed, and any other initial business is conducted. The first meeting minutes should also be recorded and added to your corporate record book.
Are there any special rules for Puerto Rico organizational meetings?
You’re required to give a minimum of two days notice before holding the meeting. Attendees can, however, waive their required notice in writing. The meeting doesn’t have to be held in Puerto Rico.
Open a Corporate Bank Account
Businesses that mix personal and business finances together risk losing their liability protections, so your corporation will need its own bank account. In addition, a corporate bank account is essential for easily accepting payments, paying bills and holding funds.
How do I open a bank account for my Puerto Rico corporation?
To open a corporate bank account in Puerto Rico, you’ll need to bring the following with you to the bank:
A copy of the Puerto Rico corporation’s Certificate of Incorporation
The corporation’s bylaws
The corporation’s EIN
If your bylaws don’t specifically assign the power to open a bank account, you may also want to bring a corporate resolution to open a bank account. The resolution would state that the person going to the bank is authorized by the business to open the account in the name of the corporation. At Northwest, we provide free corporate bank resolutions, along with many other free corporate forms, to help you get started fast.
File Puerto Rico Reports & Taxes
In Puerto Rico, corporations file an annual report each year. Tax-wise, as a U.S. territory, the commonwealth handles things differently than most states, and corporate tax rates depend on a variety of factors.
What is the Puerto Rico Annual Report?
The Puerto Rico Annual Report is a filing you must submit each year. The territory requires more information for an annual report than most states. In addition to updating information on directors, officers, registered agent and shares, you must also provide a statement detailing the financial condition of your corporation for the previous year.
If your total revenue is less than $3 million, this financial statement can be prepared by someone with general accounting knowledge. However, businesses with revenue over $3 million must have their report audited by a certified public accountant licensed in Puerto Rico.
How much is the Puerto Rico Annual Report?
The annual report has a flat fee of $150.
When is the Puerto Rico Annual Report due?
The filing is due no later than April 15. For-profit corporations that miss that deadline without filing for an extension can suffer considerable fines at the Department of State’s discretion, ranging from $750 up to $2000. Repeated failure to file annual reports can lead to administrative dissolution for your corporation.
These filings can be easy to forget—which is why we send our clients automatic reminders for your Puerto Rico Annual Report filings. Or better yet, let us file for you. With our business renewal service, we can complete and submit your annual report for you for $100, plus the $150 Department of State fee.
What should I know about Puerto Rico corporate taxes?
Because Puerto Rico is a US territory, corporate taxes are a little different, and the taxes you pay depend on residency, business activities, income sources, and more. Some corporations pay as a little as 4%, and others pay much more. For an overview of Puerto Rico business taxes, check out our Puerto Rico Tax Advantage page.
The total Puerto Rico sales tax is 11.5%, 10.5% for the commonwealth and 1% for municipalities.
Do corporations have to register with the Puerto Rico Department Of Treasury?
Yes, if you will be a taxpaying employer in Puerto Rico, you’re required to register with the Puerto Rico Department of Treasury (Departamento de Hacienda). You can register via the Treasury’s online portal SURI. You’ll need your EIN before you can register.
Puerto Rico Corporation FAQs
How can I submit the Puerto Rico Certificate of Incorporation?
You can file your Puerto Rico Certificate of Incorporation online or by mail. The address for the Department of State is:
Departamento de Estado de Puerto Rico
Calle San José, Plaza de Armas
San Juan, PR 00901
How much does it cost to start a Puerto Rico corporation?
Puerto Rico charges a flat $150 to file a Certificate of Incorporation as a for-profit corporation.
Hire us for a one-time fee of $375, including the Department of State filing fees, a year of registered agent service, and more. Or, pay just $49 out the door with our VIP monthly payment option.
How long does it take to start a Puerto Rico corporation?
Filing your Certificate of Incorporation generally takes less than a day to complete.
If you hire Northwest to start your corporation, we file online and typically have your Puerto Rico corporation formed within 24 hours.
Does a Puerto Rico corporation need a business license?
Most businesses will need a license. If you plan to engage in any business in a Puerto Rico municipality, you’ll have to get a “Patente Municipal” license—a municipal tax license. The tax is based on turnover (sales) with variable rates. If you fail to register, there’s a fine of up to $500 in many municipalities. Also, if you have a physical office or location in Puerto Rico, you’ll also need to obtain a Use Permit before you begin operating. The permits are available from either your municipality or the Office of Management of Permits.
For some license applications you may need an EIN or a certified copy of your Certificate of Incorporation. At Northwest, we can streamline the process and get these for you—simply add on these items during checkout.
What is a foreign Puerto Rico corporation?
A corporation formed outside of Puerto Rico—but which conducts business in the territory—is considered a foreign Puerto Rico corporation. For example, if you incorporated in Florida but decide to open a storefront in Puerto Rico, you would be a foreign Puerto Rico corporation. This also means you would need to register with the Department of State by filing a Certificate of Authorization for doing Business in Puerto Rico. Foreign corporations are required to file the Puerto Rico Annual Report as well and are also subject to the commonwealth’s relevant corporate taxes.
Can Northwest help me form a nonprofit corporation?
Absolutely! We’re happy to start a nonprofit corporation for you. Nonprofits only pay $5 to file a Certificate of Incorporation, and annual reports will only cost $5 as well.
How can I get a Puerto Rico phone number for my corporation?
It’s a conundrum: you need a local number to display on your website and give to customers, but you don’t want to make your personal number quite so…public. We get it. And we’ve got you covered with Northwest Phone Service. We can provide you with a virtual phone number in any state—plus unlimited call forwarding and tons of easy-to-use features. You can try Phone Service free for 60 days when you hire us to form your corporation, and maintaining service is just $9 monthly after that. No contract required.
How to Order Puerto Rico Incorporation Service
Our Puerto Rico incorporation service is designed to be fast and easy—signing up takes just a couple minutes. Here’s how it works:
We offer flexibility with two different options for payment. You can pay everything up front, which includes a full year of registered agent service. Or, pay just $49 out the door with our VIP monthly payment option. With our VIP option, we also include an EIN. Just choose one of the buttons below, answer a few easy questions about your business and submit your payment.
Next, we’ll prepare and submit your Puerto Rico Certificate of Incorporation to the Department of State. In the meantime, you’ll have immediate access to your online account, where you can find useful state forms, pre-populated with your business information.
Once the Puerto Rico Department of State has approved your filing, we notify you that your Puerto Rico corporation has been legally formed. You can now move on to next steps, like holding your organizational meeting and opening a bank account.