The Puerto Rico Investment Agreement is a legal contract that outlines the terms and conditions between an investor and the government of Puerto Rico for investment purposes. It serves as a framework for attracting local and foreign investors, offering various incentives and benefits to encourage economic development and growth on the island. One type of Puerto Rico Investment Agreement is the Act 20 Export Services Agreement. Under this agreement, eligible businesses engaged in exporting services from Puerto Rico are granted tax incentives, including a 4% fixed income tax rate and complete exemption from municipal and state taxes on export services income. Another type of Puerto Rico Investment Agreement is the Act 22 Individual Investors Agreement, also known as the Individual Investors Act. This agreement offers tax incentives to individual investors who become residents of Puerto Rico. Qualified investors under Act 22 are eligible for complete exemption from Puerto Rico income taxes on passive income generated after relocating to Puerto Rico. Additionally, the Puerto Rico Investment Agreement includes provisions for developers and investors in designated Opportunity Zones on the island. These agreements offer significant tax incentives, such as deferral or reduction of capital gains taxes, for investments made in economically distressed areas of Puerto Rico. Investment agreements like these aim to promote economic growth, attract foreign direct investment, create job opportunities, and enhance Puerto Rico's overall competitiveness as a business destination. The agreements typically specify the investment requirements, duration, tax benefits, compliance obligations, and other terms agreed upon by the investors and the government of Puerto Rico. By structuring and entering into investment agreements, Puerto Rico seeks to diversify its economy, promote sustainable development, and overcome the challenges it has faced in recent years. The agreements play a crucial role in attracting capital and stimulating economic activity, while contributing to the overall recovery and prosperity of Puerto Rico.