DDEC Seed Capital: up to $15,000 or $35,000 for your business

The DDEC’s Trade and Export Program administers several of the incentives established in the Regulation for Economic Programs and Incentives (MO-DEC-015), under Ley 60-2019, known as Puerto Rico’s Incentives Code. Carta Circular DDEC Núm. 2025-014, issued 9 October 2025 by Secretary Sebastián Negrón Reichard, establishes the uniform mechanism for applying for and being reimbursed under those incentives, and repeals Carta Circular DDEC Núm. 2024-011. Capital Semilla exists to give incentives to PyMEs that are not eligible for a tax decree under the Incentives Code. The programme is funded by an allocation from the DDEC’s Economic Programs and Incentives Fund and is subject to the availability of funds: the Carta Circular says its provisions remain in force until the total funds allocated to the Programme are used up. Applications are evaluated by a Committee made up of the Auxiliary Secretary for Entrepreneurship and Business Development, the Director of the Programs and Strategic Alliances Division and a representative of the DDEC’s Legal Counsel Office, which issues a report and recommendation to the Secretary, who approves.

A PyME is a business generating average sales of $3,000,000 or less over the three tax years before the current one and employing 25 or fewer people full time or the equivalent. For Capital Semilla for New Businesses you must have fewer than 36 months in operation; the Carta Circular distinguishes microbusinesses — gross income under $500,000 a year and seven or fewer employees — from small businesses — gross income under $3,000,000 a year, no fewer than 2 people and no more than 25 full-time employees. In both cases the PyME must have at least one full-time employee on payroll. For Capital Semilla for Existing PyMEs you must have three years or more in operation and sales of up to $3,000,000 a year. There are express exclusions: the DDEC does not accept applications for establishing short- or long-term rentals or medical cannabis dispensaries, and businesses showing losses on their income tax return are not eligible, in compliance with the law on return on investment. In addition, PyMEs that already received an incentive under Impulso PyMEs, Capital Semilla or the Special Marketing Incentive must wait twelve months from the expiry of the relevant contract before becoming eligible again.

• New business: fewer than 36 months in operation, with at least one full-time employee on payroll.Verified against the official source
• Existing: three years or more in operation and sales of up to $3,000,000 a year.Verified against the official source
• Not showing losses on the income tax return: businesses at a loss are not eligible.Verified against the official source
• New businesses only: evidence of matching funds through financing, an incentive or investment, no more than 18 months old.Verified against the official source
• Having waited twelve months from contract expiry if you already received Impulso PyMEs, Capital Semilla or the Marketing Incentive.Verified against the official source

• Application Form completed in full.
• Business Proposal with six parts: Incentive Request (with a table of items, quantity and approximate cost), Business Description, Product or Service Description, Human Resources, Customer Profile and Marketing Plan.
• Current photo ID, Merchant Registry, Municipal License and Permiso Único or Carta Consulta.
• Certificate of no debt with Hacienda and Certification of Tax Return Filing for the last five years.
• Certificate of no debt for all concepts from CRIM and Certificate of no debt from ASUME.
• If a corporation: Certificate of Organization, Certificate of Incorporation and Certificate of Compliance (Good Standing) from the Department of State.
• Existing PyMEs only: a copy of the income tax return and a copy of the quarterly unemployment and disability contribution return with payroll from DTRH.
• If you owe any of those agencies: evidence of a current payment plan and that it is up to date.

1. 1

   Step 1: First work out which of the two applies to you

   The dividing line is 36 months in operation. Fewer than 36 months is Capital Semilla for New PyMEs, up to $15,000 and with a matching funds requirement. Three years or more is Capital Semilla for Existing PyMEs, up to $35,000 and with no matching requirement, but reimbursing 50% to 75% instead of 100%. The Carta Circular defines start of operations as a business that has filed tax returns or provides a sworn statement of filing (Hacienda Form SC 2781).

2. 2

   Step 2: Look at the table before getting attached to the big number

   For Existing PyMEs the Committee takes net annual income into account as reported on the income tax return, and the Carta Circular publishes this reference table: $15,000 for net income of $500 to $150,000; $20,000 for $150,001 to $500,000; and $35,000 for $500,001 to $3,000,000. For New PyMEs the Committee considers the matching funds, the net annual income and the statement of need in setting the amount. The headline $35,000 is the top of the table, not the default figure.

3. 3

   Step 3: If you are new, put together the matching funds

   The match is the money you put in, and the evidence cannot be more than 18 months old. There are three forms. Financing: a loan from a bank or cooperative authorized to do business in Puerto Rico, with evidence of the loan being granted and disbursed for business purposes. Incentive: written evidence of the approval of an incentive not from the DDEC, granted by a government entity, a non-profit or an authorized foundation. Investment: supplier invoices and cancelled payment receipts — cancelled checks and bank statements — for permit and licence payments, a security deposit for a commercial lease, purchase of equipment, inventory or improvements to premises you own. Investments to set up space in your home for the business do not count.

4. 4

   Step 4: Gather the papers: there are many and all must be current

   Current photo ID, Merchant Registry, Municipal License, Permiso Único or Carta Consulta, certificate of no debt with Hacienda, certification of tax filings for the last five years, certificate of no debt for all concepts from CRIM and certificate of no debt from ASUME. If a corporation, also the Certificate of Organization, the Certificate of Incorporation and the Certificate of Compliance (Good Standing) from the Department of State, all in the entity’s name. Existing PyMEs add a copy of the income tax return and a copy of the quarterly unemployment and disability return with payroll from the Labor Department. If you owe any of those agencies, provide evidence of a payment plan and that it is current. The DDEC discards any incomplete application.

5. 5

   Step 5: Write the business proposal

   The Carta Circular asks for six concrete parts. Incentive Request: describe how the incentive will help you develop the business and include a table with the items you will buy, the quantity and the approximate cost. Business Description: how long established or what stage it is at, type of organization (DBA or corporation), location, and what permits you have or their status. Product or Service Description. Human Resources: the owner’s capabilities and duties, how many employees you have, whether full or part time and what they do. Customer Profile. And Marketing Plan: how you will promote the business.

6. 6

   Step 6: File and wait for the Committee

   The application is filed online through the DDEC portal. The Evaluation Committee meets, checks that the documentation is complete and meets the programme’s objectives, and issues a report and recommendation to the Secretary, who approves. The Carta Circular does not publish how long that decision takes, and this guide does not invent a figure. If approved, you have fifteen business days to comply with and submit all the documents needed to formalize the Incentive Contract.

7. 7

   Step 7: Do not spend a cent until the contract is recorded

   This is the part that costs money when it is ignored. The Carta Circular says the DDEC will not treat as reimbursable any expense the business incurred before the date it signed the contract, and that only permitted expenses made and paid after the Incentive Contract is recorded at the Oficina del Contralor qualify. It is not "after approval": it is after signature and recording. If you are unsure whether a particular expense is reimbursable, the Carta Circular itself invites you to consult the Programme before incurring it.

8. 8

   Step 8: Spend only on what is allowed

   The permitted uses are the same for both versions: purchase of new machinery and equipment directly related to operations; a food cart for mobile or anchored commercial use, only if you operate from a cart that is not in good condition or if the business requires moving machinery — and the Carta Circular stresses that buying other motor vehicles is not allowed; a subsidy of 50% of the net salary of newly created jobs hired at 40 hours a week; payment of commercial rent, with a current lease in the applicant’s name and where the landlord may not be a relative within the fourth degree of consanguinity or the second of affinity; improvements to the premises’ infrastructure if you own the property, such as removing barriers for people with disabilities or improving plumbing or electrical systems; and purchase of software and technology licences. For new PyMEs, restaurants may use it only for food preparation equipment, excluding anything associated with selling alcoholic beverages. And an express note: air conditioning systems and furniture do not qualify as essential equipment.

9. 9

   Step 9: Bill properly: how you paid decides whether you get reimbursed

   Reimbursement is requested with an invoice addressed to the DDEC for the total amount claimed, signed with the declaration that no DDEC public servant has an interest in the contract’s profits. You must attach original receipts in the business’s name — if you operate under a DBA, in the individual’s or trade name; if a corporation, in the entity’s name — and if you submit copies, they must be certified as true and exact copies. The authorized payment methods are check, manager’s check, credit card, PayPal, ATH Móvil Business and web cash, all in the name of the entity that signed the contract and reflected on the bank statement. Payments made in cash or by money order are not reimbursed. The invoice must be accompanied by photos of the machinery or equipment purchased, installed and operating. Reimbursement may only be requested quarterly, and if six months pass without a reimbursement request the contract is cancelled automatically.

10. 10

    Step 10: And comply afterwards, because the DDEC audits

    The DDEC may at any time conduct inspections, audits and information requests, and visit the premises to confirm the funds were used in accordance with the Carta Circular. Express violations include providing false or altered information; failing to keep the records justifying reimbursements; failing to report a change of owner or shareholders; and owing taxes to the Government or falling behind on a payment plan with Hacienda, CRIM or ASUME without immediately reporting it. The Secretary may revoke the incentive, cancel the contract and demand full or partial repayment. If the DDEC has to go to court to collect, the participant is also liable for attorney’s fees equal to 10% of the debt.

The application is filed online on the DDEC portal. For clarifications, the Carta Circular gives the DDEC Central Office at 787-758-4747, extensions 3314, 5515 and 5517, the email premprende@ddec.pr.gov, or the Trade and Export Program staff at the Centro Único de Servicios (CUS), in the Fomento Industrial Building, Ave. Roosevelt #355, first level, San Juan. There are Business Development Centers in San Juan and Mayagüez.

• Buying the equipment before the contract is signed and recorded at the Oficina del Contralor.
• Paying in cash or by money order: those payments are never reimbursed.
• Counting on the $35,000 without looking at the net annual income table that sets the amount.
• Applying as a new business without the matching funds, which is a requirement only of that version.
• Submitting matching evidence more than 18 months old.
• Including air conditioning or furniture, which the Carta Circular declares non-essential.
• Renting the premises from a close relative: the landlord may not be a relative within the fourth degree of consanguinity or the second of affinity.
• Letting six months pass without requesting reimbursement, which cancels the contract automatically.
• Filing with a single expired document: the DDEC discards any incomplete application.

These are the government pages this guide is based on.

• Departamento de Desarrollo Económico y Comercio (DDEC)

  DDEC

  www.ddec.pr.gov

• Carta Circular DDEC Núm. 2025-014 — PyME incentives

  ddec

  docs.pr.gov