The Puerto Rico Opportunity
Discover the strategic advantages of doing business in Puerto Rico.
Why Puerto Rico Stands Out
Puerto Rico offers a strategic business environment brimming with unique advantages. As a U.S. territory in the heart of the Caribbean, it provides businesses with a familiar legal framework, the security of U.S. banking laws, and advanced infrastructure, all while offering attractive tax incentives.
Strategic Location & Connectivity
With direct access to key markets in the U.S., Latin America, the Caribbean, and Europe via three air transshipment hubs, 11 seaports, and 11 airports, Puerto Rico’s central location makes it a hub for global trade.
Advanced Talent Pool
Home to over 80 world-class universities and colleges, Puerto Rico’s labor force is highly skilled, bilingual, and focused on STEM disciplines. More than 50% of graduates specialize in technical fields, creating a pool of 25.6K candidates
Growing Sectors
With 48% of its GDP driven by manufacturing, Puerto Rico boasts a strong and diversified economy. The island’s legacy in bioscience, alongside emerging technology, financial services, and entrepreneurship sectors, promises vast opportunities for businesses seeking growth.
Tax Incentives & Business Security
The Puerto Rico Incentives Code (Act 60) accelerates economic growth by providing competitive tax benefits, while also harmonizing business incentives and offering 15-year tax decrees for eligible activities. Additionally, businesses are protected under U.S. laws, including intellectual property and patent protections, FDIC banking regulations, and the use of the U.S. dollar.
Infrastructure Investment
Post-Hurricane Maria, billions have been allocated to revitalize Puerto Rico’s infrastructure, solidifying the island as a resilient business hub with cutting-edge logistics.
Access to Capital
Non-dilutive capital is a pivotal business tool, enabling growth and operational expansion while preserving ownership and company value.
FAQs
Puerto Rico is not just about beautiful beaches, rainforests, and music, in fact around 47% of the Island’s GDP comes from manufacturing activities (7% Tourism & Hospitality and 46% other activities).
12 of the world’s top 20 pharmaceutical companies in addition to many other leading industrial manufacturers have a significant presence on the Island.
Puerto Rico offers a perfect blend of attractive financial incentives, a talented and bilingual workforce, and advanced logistical infrastructure capabilities all on US soil
Yes, Puerto Rico is a commonwealth of the United States, meaning Puerto Ricans and those who relocate to the Island maintain U.S. citizenship and the protections under US federal law.
Puerto Rico holds a unique position wherein the U.S. Government classifies Puerto Rico as an independent taxation authority by Federal Law codified on the Title 48 of the United States Code as 48 U.S.C. § 734. Under this distinction, the Island has its own tax code and version of the IRS (called Hacienda). Additionally, under Internal Revenue Code (IRC) §933, Puerto Rico source income is excluded from U.S. federal tax.
This designation allows Puerto Rico to create unique tax incentives encompassing reduced tax rates, attractive tax credits, and other payment exemptions to attract businesses and individuals to relocate and invest into the Island.
Whereas U.S. citizens are normally subject to worldwide taxation, regardless of the source derived from, IRC §933 provides an exception for residents of Puerto Rico, excluding their Puerto Rico source income from U.S. federal tax.
Under Puerto Rico’s Act 60-2019, as amended (“Act 60”), the following general benefits are made available:
4% flat corporate tax (1.0% for novel industries).
0% rate on dividend distributions.
75% property tax exemption.
75% construction tax exemption.
50% municipal license tax exemption.
50% exemption on other municipal taxes.
In addition to tax savings, Puerto Rico offers:
Attractive tax credits that can be sold to third parties at a discount.
Cash grants for machinery & equipment, infrastructure investments, and job creation.
As a U.S. commonwealth, all the products manufactured in Puerto Rico qualify as ‘Made in USA.’
Under Act 60 (previously Act 22-2012, as amended (“Act 22”)), bonafide residents of Puerto Rico who were not a resident during the period of January 17, 2006 to January 17, 2012 benefit from:
0% rate on dividend distributions.
0% on interest income.
0% on short-term and long-term capital gains.
Under Act 60-2019, the Island offers attractive non-dilutive funding (meaning that the funding does not impact the equity ownership) in the form of cash grants and tax credits that can be sold for cash to third-parties with a Puerto Rico tax liability.
A unique element to the Puerto Rico tax credits is that under Act 60, they are third-party assignable, meaning that the company generating the tax credits has the right to either use them to offset their own tax liabilities or to sell them to a third-party at a discount to their face value. The price for tax credits varies based on demand, however, DECA Analytics usually places credits between $0.88 and $0.92 per $1.00 in credits.
Puerto Rico is unique in that the incentives offered under Act 60 are excellent collateral for companies seeking financing. Both the cash grants and the tax credits represent cash back into the company that can be used as collateral.
Yes, Puerto Rico has an exceptional bilingual workforce with one of the highest concentrations of STEM graduates with over 50 institutions of post-secondary learning graduating approximately 25,000 bachelor degrees and 5,000 post-graduate degrees in science annually.
The Island is the 6th highest concentration of scientists and engineers in the world and leads the nation in the concentration of pharmaceutical, medical device, and high-tech manufacturing expertise.
The local workforce of multigenerational U.S. citizens is bilingual in English and Spanish, giving local companies the perfect opportunity to tap into global markets.