For foreign investors looking to enter Latin America and the Caribbean, doing business in Puerto Rico can offer something of a “best of both worlds” in terms of providing many of the benefits that come with a commercial launch in the region, while retaining some of the advantages that investors enjoy at home. If you’re looking at company formation in Puerto Rico, this page will let you know what benefits you can expect.
Key takeaways on doing business in Puerto Rico
| Is foreign ownership allowed in Puerto Rico? | Yes, a business can be 100% foreign-owned by either legal persons (legal entities) or natural persons (individuals). |
| Most important sectors in Puerto Rico | Industry accounts for more than 50% of GDP, while the services sector makes up most of the rest. Pharmaceuticals, medical equipment, computers, and garments are some of the key export goods produced in Puerto Rico, along with fish and rum |
| Are there Free Trade Zones in Puerto Rico? | Yes, all of Puerto Rico’s main ports have sizeable FTZs which offer significant tax incentives for trade with other parts of the United States and elsewhere. |
| Incentives for Foreign Direct Investment in Puerto Rico | |
| International links | The vast majority of Puerto Rico’s foreign trade is with the mainland United States, but US participation in a range of free trade agreements, offers businesses based in Puerto Rico preferential access to a large number of markets around the region. |
Doing business in Puerto Rico: The Economy
While Puerto Rico retains many of the cultural and economic features commonly associated with Latin America and the Caribbean, its status as a US territory and the strong ties it has with the United States can be favourable to foreign investors, particularly those from the US mainland and Canada, or other English-speaking countries.
The Puerto Rican economy is characterized by significant manufacturing activity, with industry accounting for more than 50% of GDP, while the services sector accounts for most of the rest, with agriculture generating less than 1%.
Esa división económica se refleja en el perfil comercial del territorio, con productos farmacéuticos, equipos médicos, ordenadores y prendas de vestir entre los principales bienes de exportación producidos en Puerto Rico, junto con el pescado y el ron. En 2018, el valor total de las exportaciones alcanzó la impresionante cifra de 60.570 millones de dólares.
Call centers are also a growing business activity because of the high level of English proficiency on the island. Puerto Rico is also home to a dynamic startup scene and an increasing pool of tech talent.
For investors looking to take advantage of these growing sectors and incorporate a business in Puerto Rico, the island has three free trade zones (FTZs) — known as foreign trade zones in the United States and its territories — that offer lucrative financial incentives to businesses located within their boundaries. Beyond the FTZs, the island also has a huge tourism sector that draws significant overseas investment.
The vast majority of Puerto Rico’s foreign trade is with the mainland United States, but US participation in a range of free trade agreements, offers businesses based in Puerto Rico preferential access to a large number of markets around the region. Nevertheless, the economy relies heavily on the United States, and receives several forms of federal economic aid.
Puerto Rico has seen a significant increase in interest from international investors over recent years, accompanied by a rise in foreign direct investment (FDI), particularly from the likes of Canada, Germany, Mexico, and Spain. The most popular sectors for investment include the telecommunications industry, software and IT services, food and beverages, and manufacturing.
5 Razones para hacer negocios en Puerto Rico
- US territory
Its status as a US territory provides a number of advantages for doing business in Puerto Rico, beyond the simple fact that having the US dollar as its official currency means significant savings on transferring capital into and out of the country for investors based in the US, or who do significant business in dollars.
Porque ser territorio estadounidense también significa que los procesos oficiales se basan a menudo en sistemas estadounidenses, lo que implica una burocracia significativamente menor que la de otros países de la región. Mientras que los fabricantes se benefician de poder etiquetar sus productos como “Made in the USA”.
- Tax benefits
Hacer negocios en Puerto Rico conlleva una serie de ventajas fiscales que lo hacen atractivo para los inversores, como un tipo del 4% en el impuesto sobre la renta, una exención fiscal del 100% sobre las distribuciones de ganancias y beneficios, y una exención del 90% de los impuestos sobre bienes personales para algunos tipos de empresas.
Esto hace que muchos bienes y servicios sean significativamente más baratos que en Estados Unidos o en cualquier otro lugar, al tiempo que proporciona algunas de las ventajas que los inversores buscan en un paraíso fiscal, sin dejar de estar en suelo estadounidense.
- Prime location
Situado entre la República Dominicana y las Islas Vírgenes estadounidenses, Puerto Rico goza de una ubicación privilegiada que le permite acceder fácilmente a los mercados de toda la región de América Latina y el Caribe.
Mientras tanto, sus fuertes lazos con Estados Unidos hacen que vuelos regulares conecten el Aeropuerto Internacional Luis Muñoz Marín de la capital, San Juan, con una serie de importantes ciudades estadounidenses, con vuelos directos a Miami de menos de tres horas de duración.
- Good infrastructure
Al ser territorio estadounidense, Puerto Rico se beneficia de unas infraestructuras considerablemente mejores que muchos países latinoamericanos, con autopistas, escuelas, hospitales y servicios públicos bien desarrollados.
Además, debido a la base industrial bien establecida, la isla cuenta con infraestructuras de apoyo a la economía de importación y exportación, y el comercio internacional se canaliza principalmente a través del gran puerto de contenedores de San Juan.
- Significant opportunities
Además de tener una base industrial bien establecida y preparada para la inversión, Puerto Rico también cuenta con un sólido ecosistema de empresas emergentes, que se ha convertido en los últimos años en un centro de innovación.
Para reforzar ese ecosistema existe un programa llamado Startup 18, una aceleradora con sede en San Juan que ya ha recaudado más de 126 millones de dólares en inversiones e impulsado a más de 200 empresas desde su fundación en 2015.
FAQs on doing business in Puerto Rico
Answers to some of the most common questions we get asked by our clients.
1. Can a foreigner own a business in Puerto Rico?
Yes, a business can be 100% foreign-owned by either legal persons (legal entities) or natural persons (individuals).
2. Are there Free Trade Zones in Puerto Rico?
| Yes, all of Puerto Rico’s main ports have sizeable FTZs which offer significant tax incentives for trade with other parts of the United States and elsewhere. |
3. How long does it take to register a company in Puerto Rico?
Registering a company in Puerto Rico takes 4 weeks.
4. Which sectors are important in Puerto Rico?
Industry accounts for more than 50% of GDP, while the services sector makes up most of the rest. Pharmaceuticals, medical equipment, computers, and garments are some of the key export goods produced in Puerto Rico, along with fish and rum
5. Does Puerto Rico have trade agreements with other countries?
The vast majority of Puerto Rico’s foreign trade is with the mainland United States, but US participation in a range of free trade agreements, offers businesses based in Puerto Rico preferential access to a large number of markets around the region.
6. What entity types offer Limited Liability in Puerto Rico?
In Puerto Rico, the S.R.L (Sociedad de Responsabilidad Limitada) is the limited liability company.
Biz Latin Hub puede ayudarte a hacer negocios en Puerto Rico
At Biz Latin Hub, our multilingual team of company formation specialists is equipped to help you doing business in Puerto Rico.
With our complete portfolio of back-office solutions, including legal, accounting, and hiring & PEO services, we can be your single point of contact for entering the market and operating in Puerto Rico, or any of the 17 countries around Latin America and the Caribbean where we are present.
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