For the Fund:
- Private Equity Funds (“PEFs”) and Puerto Rico Private Equity Funds (“PRPEFs”) are treated as partnerships for tax purposes and, as pass-through entities, are not subject to income tax.
- 75% tax exemption on personal property and real estate owned by the Fund.
- 100% exemption from municipal license tax.
For the Accredited Investors:
- 10% tax rate on interest/dividend income.
- 0% tax rate on capital gains.
- 5% tax rate on capital gains realized upon the sale of ownership interests in a PEF or PRPEF, unless reinvested within 90 days in a PRPEF, in which case, exempt.
- Income not subject to municipal license tax.
Accredited Investors that are Puerto Rico Residents:
- Deduction of net capital losses attributable to investments by the Fund in companies that derive at least 80% of their gross income during the last 3 years from Puerto Rico sources or from income effectively connected or treated as effectively connected with a trade or business in Puerto Rico.
- 60% income tax deduction based on capital committed in a PRPEF (up to 30% of the investor’s net income prior to deduction, per year for up to 15 years).
- 30% income tax deduction based on capital committed in a PEF (up to 15% of the investor’s net income prior to deduction, per year for up to 10 years),