P.R. Laws tit. 7, § 3112
(a) Any partnership or limited liability company organized under the laws of the Commonwealth of Puerto Rico, the United States of America or under any other foreign jurisdiction law, that works with investments on promissory notes, bonds, notes (including secured and unsecured loans and including the collateral), shares or any other securities of similar nature issued by entities that, at the time of acquisition, are not offered at public stock exchange markets in the United States or in any foreign country, shall qualify as a Fund under the provisions of this chapter during each year that it complies with the following requisites:
(1) Office located in Puerto Rico;
(2) a minimum of eighty percent (80%) of the paid-in capital contributed to the Fund by its accredited investors (excluding the capital that the Fund maintains in bank accounts and other cash equivalent investments) invested in promissory notes, bonds, notes (including secured and unsecured loans and including the collateral), shares or any other securities of similar nature issued by entities that at the time of acquisition are not offered at public stock exchange markets in the United States or in any foreign country;
(3) the paid in capital contributions that have not been invested in accordance with clause (2) of this subsection shall not exceed twenty percent (20%) and shall be maintained in one of the following investments:
(A) Securities and obligations of the Commonwealth of Puerto Rico and/or the United States governments or instrumentalities or political subdivisions thereof if principal and interest are due within a fifteen (15) month period from the investment date;
(B) reselling agreements with institutions insured by the FDIC, SIPC, PRCUSIC, IBE, IFE and/or GDB if due within ninety (90) days or less. The securities relating to the reselling agreements shall be secured with respect to principal and interest by the United States of America or the Commonwealth of Puerto Rico and shall be investment grade. These securities shall be maintained on an institution insured by the FDIC or SIPC;
(C) certificates of deposit with a maturity date of one year or less, issued by institutions insured by the FDIC or the PRCUSIC;
(D) a deposit account in an institution insured by the FDIC or the PRCUSIC;
(E) checking account in an institution insured by the FDIC or the PRCUSIC;
(F) an account with reasonable cash balance for miscellaneous expenses; and/or
(G) investment certificates issued by GDB, IBE or IFE;
(4) No later than four (4) years after its organization date and at the end of each subsequent fiscal year, a PEF shall maintains:
(A) A minimum of fifteen percent (15%) of the paid-in capital contributed to the Fund by accredited investors (excluding the capital that the Fund maintains in bank accounts and other cash equivalent investments) invested in promissory notes, bonds, shares, notes (including secured and unsecured loans and including the collateral), or any other securities of similar nature issued by entities that at the time of acquisition are not offered at public stock exchange markets in the United States or in any foreign country and have been issued by a corporation, limited liability company, partnership, foreign or domestic, which derives at least eighty percent (80%) of its gross income for the prior three (3) years period from sources within Puerto Rico or from income effectively connected or treated as effectively in accordance with the Code provisions;
(5) No later than four (4) years from its organization date and at the end of each subsequent fiscal year, a PEF-PR shall maintain:
(A) A minimum of sixty percent (60%) of the paid-in capital contributed to the Fund by its accredited investors (excluding the capital that the Fund maintains in bank accounts and other cash equivalent investments) invested in one of the following:
(i) Promissory notes, bonds, shares, notes (including secured and unsecured loans and including the collateral) or any other securities of similar nature issued entities that at the time of acquisition are not offered at public stock exchange markets in the United States or in any foreign country, and that have been issued by a corporation, limited liability company, partnership, foreign or domestic, which derives at least eighty percent (80%) of its gross income for the prior three (3) years period from sources within Puerto Rico or from income effectively connected or treated as effectively in accordance with the Code provisions;
(ii) exempt investment trust under § 30521 of Title 13,
(6) that its investors qualify as accredited investors;
(7) shall use a RIA, which shall be a domestic or foreign person with a business office in Puerto Rico engaged in a trade or business in Puerto Rico in accordance with the provisions of the Code and duly registered with the relevant regulators including, but not limited to CFIPR, the SEC, the SBA, as applicable;
(8) shall operate as a diversified investment Fund, therefore, no later than four (4) years from the date of its organization and at the end of each subsequent fiscal year, no more than a twenty percent (20%) of its capital shall be invested in the same business. To determine the twenty percent (20%) investment limit in the same business, a controlled group of corporations or a group of related entities, as provided in §§ 30044 and 30045 of Title 13, will be considered as a business. Therefore, the amounts invested in one or more entities within a controlled group of corporations or a group of related entities shall be aggregated to determine if the Fund has complied with the twenty percent (20%) investment limit in the same business; and
(9) shall have a minimum capital of ten million dollars ($10,000,000), including legal commitments of capital contributions duly documented even if not yet received within twenty-four (24) months from the Fund’s first issuance of proprietary interests and subsequently.
(10) shall appoint at least one of its investors or limited partners in one advisory board where matters of interest and concerns regarding the Fund might be discussed and evaluated.
(11) in case of a foreign partnership or foreign limited liability company it shall be engaged in a trade or business in Puerto Rico and derive at least eighty (80) percent of its gross income from sources within Puerto Rico or from income effectively connected or treated as effectively connected in accordance with Code provisions.
History —Nov. 12, 2014, No. 185, § 3.