P.R. Laws tit. 13, § 10108
(a) General rule. — The transfer of a tax exemption grant or the stock, property or other interest on property of an exempted business that holds a decree granted under this part must be previously approved by the Secretary of State. If the same is carried out without previous approval, the exemption grant shall be rendered null and void as of the date the transfer occurred, except in those cases listed in subsection (b) of this section. The above notwithstanding, the Secretary of State may retroactively approve any transfer made without his/her approval when in his/her judgment the circumstances of the case so justify, taking into consideration the best interests of Puerto Rico and the economic and industrial development purposes of this part.
(b) Exceptions. — The following transfers shall be authorized without the need of previous consent:
(1) The transfer of the assets of a decedent to his/her estate or the transfer by bequest or inheritance.
(2) The transfer under the provisions of § 10109 of this title.
(3) The transfer of stock or any shares in a partnership when such a transfer does not directly or indirectly result in a change in the ownership or control of an exempted business.
(4) The transfer of stock of a corporation that owns or operates an exempted business that holds a decree granted under this part, when the same occurs after the Secretary of State has determined that any transfer of the stock of said corporation shall be allowed without his/her prior approval after considering the extent to which the availability of investment capital may depend on the fact that there are assets that are freely transferable, the nature of said exempted business and its importance to the industrial development of Puerto Rico, the integrity and financial situation of the stockholders, the paid-in capital and the number of stockholders that the corporation expects to have as of the date the exempted business commences operations. The Secretary of State shall also consider the recommendations submitted by the agencies that issue reports on tax exemption applications before making his/her determination.
(5) The pledge granted or mortgage executed in the normal course of business with the exclusive purpose of providing security for bona fide indebtedness. Any transfer of control, title or interest by virtue of said contract shall be subject to the provisions of subsection (a) of this section.
(6) The transfer by legal procedure, court order, or by a bankruptcy judge to a receiver or trustee. Any subsequent transfer to a third person other than the same debtor or former bankrupt [person], shall be subject to the provisions of subsection (a) of this section.
(7) The transfer of all assets of an exempted business that holds a decree issued under this part to an affiliated business. For the purposes of this clause, affiliated businesses are those whose stockholders or partners hold eighty percent (80%) or more of the common stock or voting stock, issued and outstanding.
(c) Notice. — Any transfer included in the exceptions of subsection (b) of this section shall be notified to the Director by the exempted business, with a copy to the Secretary of the Treasury, within thirty (30) days of the transfer, except those included under subsection (b)(4) of this section that do not convert the stockholder into a holder of ten percent (10%) or more of the outstanding corporate capital, and those included under subsection (b)(7) of this section, which shall be notified by the exempted business to the Director, with a copy to the Secretary of the Treasury, prior to the transfer.
History —Dec. 2, 1997, No. 135, § 9, eff. Jan. 1, 1998.