Safe Harbor Archives - MasterCompliance

How to Qualify for Puerto Rico’s Act 20

Posted on May 24, 2021June 9, 2021 by admin

Act 20, known as the “Export Services Act”, provides tax exemptions and tax credits to businesses engaged in eligible activities in Puerto Rico and has made the island a hot spot for exportation of international services worldwide. These tax laws were the response to Puerto Rico’s ballooning national debt that started accumulating when the US government cut federal subsidies to the island in 1996. Beginning in 2012, Puerto Rico used its special status within the United States to create unique tax incentives that would lure successful employers down to the island to bring capital and create jobs. The tax benefits Puerto Rico’s Act 20 offers are as follows:

Corporate tax rate reduced to 4%;
100% tax exemption on all distributions from earnings and profits;
90% tax exemption from personal property taxes for certain types of businesses;
90% tax exemption from real property taxes for certain types of businesses; and
60% tax exemption on municipal taxes.

For more details on the benefits of Act 20, check out our Act 20: Puerto Rico Tax Incentives blog now.

To be able to take advantage of Act 20, there are 3 major steps you need to take for your company to qualify for these tax benefits.

Investment Advisory Programs – Safe Harbor Rule 3a-4

Posted on November 1, 2017October 1, 2019 by SCM Communications

One of the key differences between an investment company and a registered investment advisor (RIA) is that advisers are in the business of providing investment advice to others, while an investment company is primarily engaged in the business of investing in securities themselves. Although advisors invest in securities on behalf clients, they do it on an individualized basis unlike investment companies that invest on behalf of clients on a collective basis. If any of a firm’s investment advisory programs are determined to be an investment company then Read More…

Safe Harbor Expansion

Posted on June 22, 2016July 1, 2017 by SCM Communications

NASD Rule 1017 is FINRA’s rule related to events which trigger a broker-dealer’s requirement to file a continuance in membership application (“CMA”). As background, events that require a broker-dealer registered with FINRA to file a CMA are as follows:

a merger with another member firm;
a direct or indirect acquisition of another member;
direct or indirect acquisitions or transfers of 25 percent or more in the aggregate of the firm’s assets, or any asset, business or line of operation that generates revenues comprising 25 percent or more in the aggregate of the firm’s earnings measured on a rolling 36-month basis;
a change in the equity ownership or partnership capital of the firm that results in one person or entity directly or indirectly owning or controlling 25 percent or more of the Read More…