Governor invites investors to partake in Puerto Rico’s economic transformation
SAN JUAN – Gov. Ricardo Rosselló, alongside Puerto Rico’s Economic Development Department and representatives of businesses that have established themselves on the island, gathered at the “Pathway to the Future: Opportunities of an Economic Transformation” forum in New York, which was hosted in alliance with the Financial Times, to announce that Puerto Rico is “open for business.”
“During this transformative moment for Puerto Rico, the current administration has implemented innovative initiatives and aggressive local tax benefits to attract inbound investment as they reconstruct the Island’s economy and infrastructure, and build a stronger, better Puerto Rico,” a release about the event reads.
It adds that companies such as Microsoft, Lufthansa, Bacardi, Medtronic, Amgen and Sartorious have “long invested in Puerto Rico and are committed to continuing to do so. Others, including Tesla and Google, are investing in the Island’s recovery.”
Other companies looking to capitalize on new ways to do business, such as the development and commercialization of blockchain technology, are investing in software development and exporting intellectual property from Puerto Rico, according to the release, adding Blockchain Industries as an example.
Other opportunities exist for investors on the island as structural reforms are carried out in areas such as energy, where the administration is looking for private industry partners to revamp the island’s infrastructure. In addition, the government is also changing its healthcare and “skills education” systems along with its goal of implementing island-wide broadband.
“Now is the time to invest in Puerto Rico,” Economic Development Secretary Manuel Laboy said in the release. “Puerto Rico’s strongest economic assets – our people, our resiliency, our location and our incentives are all intact – and we now have the opportunity to add to these assets with new, state-of-the-art systems to power the next phase of our story. Our incentives for investors are unparalleled and our workforce is highly educated. Combined with the protection of the U.S. jurisdiction, we recently updated our incentive laws to make it even easier for potential investors to take advantage of our aggressive local tax benefits.”
The Department of Economic Development and Commerce (DDEC by its Spanish acronym) lists some of the incentives offered by the island for the export of services, for individual investors and startups:
• Act 20: Provides a 4% income tax rate, 100% tax exemption on distributions from earnings and profits and a 90% exemption from personal property taxes for certain types of businesses.
• Act 22: Provides 100% exemption from income taxes on all dividends, interest and capital gains for bona fide residents on income made in Puerto Rico. “This is especially attractive to individuals looking to personally relocate to Puerto Rico,” the agency says.
• Act 273: Provides tax exemptions to businesses that qualify as an International Financial Entity.
• Act 399: “Provides a competitive environment for reinsurers to cover risks in and out of Puerto Rico under a secure and flexible regulatory system. Additionally, it provides for the exemption from premium taxes, dividends and other profits, municipal property taxes, and more.”
Also job creation requirements for companies exporting services from the island were removed, and federally funded tech startups are “now eligible to earn research and development tax credits. At the same time, a streamlined process for new residents to receive tax exemption on passive assets has been put into place with a firm commitment to process applications” within 30 days, DDEC assures.
Beyond the incentives, DDEC touts the island’s “quality of life like no other major metropolitan areas in the U.S.,” and the cost of living being “far below average metropolitan areas.” The “diverse and educated bilingual workforce” round out the island’s “many assets.”
Timed with the forum was the launch of Invest Puerto Rico, a nonprofit to promote the tax incentives, credits, grants and other economic tools to draw business investment, increase trade relations and foment job creation.
“As we look to rebuild, strong collaboration with the federal government and the private sector will be critical to creating a stronger and better Puerto Rico as we look to modernize energy systems, waterways, highways and ports. Puerto Rico has the opportunity to use recent public-private partnership successes, like our Luis Muñoz Marín International Airport (SJU), that recently won gold for best operational project at the P3 Awards, as a model to embark on its economic transformation in technology, infrastructure and health care,” Rosselló says in the release.