Five months after back-to-back hurricanes decimated Puerto Rico’s already-struggling infrastructure, the island’s governor, the MIT-educated Ricardo Rosselló, told a crowd at a forum in New York this week that Puerto Rico is officially “Open for Business.”
There is no doubt that Puerto Rico has a long, hard slog ahead of it. It was already drowning in debt. Now, as it is struggling to rebuild, hundreds of thousands of residents are leaving for the mainland, and the bankrupt U.S. territory is still working on a fiscal plan. Despite the uphill battle, the attitude at this week’s forum, called “Pathway to the Future,” was optimistic, as attendees expressed their hopes that the private sector could help Puerto Rico rebuild.
“Challenging times create enormous opportunities,” Rosselló said in his keynote address. Those should be enticing words for entrepreneurs. If they’re not—or if you’re feeling particularly Gordon Gekko about it all—keep in mind the words of noted rich person Baron Rothschild: “The time to buy is when there’s blood in the streets.”
Here are some (better) reasons to do business in Puerto Rico right now:
- It just passed a “gold standard” public private partnership law to encourage investment.
- It is building a new energy grid from the ground up, which leaves lots of room for innovation.
- Puerto Rico has had four governments in 16 years, meaning “change” has seen a lot of change. The current government has created structural reforms that separate economic development from government ensuring stability.
- Tax benefits: The newly-passed 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 residents.
- Puerto Rico’s forthcoming fiscal plan, which includes nearly $17 billion in federal funds from the U.S. government, projects a budget surplus in six years.
- Products manufactured in Puerto Rico get a “Made in the USA” sticker
- Low costs: The average wage in Puerto Rico is $28,740 a year, compared to $49,630 a year in the mainland.
- Intellectual Property is protected by U.S. law
- Good neighbors: Companies like Microsoft, Lufthansa, Bacardi, and Medtronic have been working in Puerto Rico for a long time. Tesla and Google came to help in the island’s recovery, and Tesla may be staying put.
- Puerto Rico is revamping laws to make it easier for the sharing economy to take hold and bring cash to the community.
If you’re not looking to do business in Puerto Rico but still want to help, follow the advice of Manuel Laboy, secretary of the Department of Economic Development and Commerce: “You want to help Puerto Rico? Go on vacation there.”