P.R. Laws tit. 7, § 1243
(a) The operation of a fund shall consist in the investment of restricted use capital in venture businesses, projects or activities in sectors such as:
(1) Manufacture
(2) Service
(3) Tourism
(4) Agriculture
(5) Agriculture and cattle industry
(6) Aquaculture
(7) Commercial fishing
(8) Filming, production, post-production, processing, dubbing and editing of short and long feature films (including the sale and distribution outside of Puerto Rico)
(9) Scientific and technical research businesses or enterprises and the development of products and industrial processes, or
(10) Other businesses or enterprises that encourage the export of products manufactured in Puerto Rico or services generated by the exporting thereof or which allow the substitution of imports, provided said projects, enterprises or businesses are located or carried out in Puerto Rico. The designated entities, in turn, shall exclusively use their restricted use capital in the operation of venture businesses, projects, or activities within the sectors stated above. However, the designated entities shall always have to obtain the Bank’s prior endorsement and preliminary eligibility determination which, if obtained, shall not bind the Secretary nor the Commissioner to issue the joint resolution described in § 1250a of this title.
(b) The restricted use capital investment shall only be allowed with the Bank’s approval in:
(1) Public companies’ shares
(2) Real estate enterprises
(3) Financial services
(4) Professional services, or
(5) Insurance services.
The Bank shall authorize the investment in any of the areas mentioned above when there is a request to such effects, and it determines, based on the specific circumstances of each case, that the particular area qualifies as a venture business, project or activity. Under no circumstances shall the use of restricted use capital be allowed for real estate speculation or for investment in entities that do not operate a profitable business in a regular and continuous form.
(c) In addition to the above investments, a fund or a designated entity may invest its restricted use capital in those risk-free activities provided by the Bank through regulations. It my also invest its restricted use capital in risk-free activities that are not contemplated in said regulations, provided, that after their proper evaluation, the Bank determines that the investors’ interests in the fund or the designated entity are not affected. The income derived from the investments in risk-free activities shall be subject to the provisions of § 1250(e) of this title.
(d) A fund or a designated entity may invest its unrestricted use capital in those venture businesses, projects or activities of the type described in subsections (a) and (b) of this section, or in risk-free businesses, projects or activities of the type described in subsection (c), located in or outside of Puerto Rico, determined by the fund’s administrator, and shall not be subject to the tax penalty established in § 1250(e) of this title.
(e) The Bank is hereby authorized to collect those charges for the filing and processing of requests for determination under subsections (a), (b) and (c) of this section which it shall establish through regulations.
History —Oct. 6, 1987, No. 3, p. 840, § 3; Aug. 31, 1992, No. 57, § 1; July 11, 1996, No. 70, § 3.