936 Tax Incentives

The 936 Tax Incentives were federal tax benefits designed to encourage U.S. companies to invest in Puerto Rico by offering substantial tax reductions or exemptions on income earned there. Established in 1976, these incentives aimed to attract businesses and create jobs, fostering economic growth on the island. They provided tax advantages such as reduced corporate tax rates or tax exemptions, making Puerto Rico an appealing location for manufacturing and service operations. The incentives were phased out in 2006, but they played a significant role in shaping Puerto Rico’s economic development during their active years.