History

Puerto Rico was a Spanish colony from 1493 until the end of the Spanish-American War in 1898 when it became a U.S. territory. By virtue of Law 600 of 1952, the Commonwealth of Puerto Rico drafted its own Constitution, which was approved by a majority of votes of the Puerto Rican populace. The Constitution of the Commonwealth of Puerto Rico sets forth the same basic rights and government structure as does the U.S. federal charter.
Government

Although fiscally autonomous, Puerto Rico operates under the tenets of both the U.S. and Commonwealth Constitutions and, historically, has had one of the most stable governments in the Americas. It is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America and the head of government is an elected Governor. The local government is organized into three distinct branches: a bicameral legislature, the judiciary, and the executive which is currently headed by Governor Aníbal Acevedo Vilá. The island also maintains a non-voting seat in the U.S. House of Representatives and is represented in Congress by a Resident Commissioner, who is elected every four years.
Puerto Rico’s relationship with the U.S. federal government, as defined by the Constitution of 1952, is in many respects similar to that of any state. Matters of currency, defense, external relations and interstate commerce are within the jurisdiction of the U.S. federal government.

The U.S. Constitution, as well as many laws passed by Congress are applicable in Puerto Rico.

An Operations Haven

Puerto Rico's modern and highly efficient infrastructure, transportation, utilities, telecommunications and financial systems - coupled with a highly skilled workforce - are geared towards continued corporate growth. In addition, the proximity and accessibility of the Island not only to the USA but to Latin America and the Caribbean, makes it an ideal strategic location for export and transshipment operations. As a result, corporate profitability ratios far exceed those on the US mainland.

This continuous evolution of infrastructure, together with a powerful economy and a government committed to continued growth are key pro-business components of the island’s success as an industrial and business center. Find out more about the components that make this island the ideal setting for your business venture.

Operational Advantages at a Glance

Puerto Rico offers a unique value proposition to entrepreneurs and established companies. In Puerto Rico you can enjoy the benefits and protections of operating within a U.S. jurisdiction with the added tax benefits of operating as a foreign corporation. The San Juan seaport, at the intersection of trade routes from North America and Europe to Latin America and the Caribbean, is the fourth largest port in the Western Hemisphere. The unusual combination of cash grants, financial incentives and credits, and venture capital initiatives together with Puerto Rico's tax laws offer a wealth of incentives that promote corporate growth, underscoring the Government's commitment to providing a pro-business environment. The effective corporate income tax rate for manufacturing companies is 2 to 7%. Transportation between Puerto Rico and the U.S. mainland is deemed domestic by the United States. A state-of–the-art telecommunications system allows instant access to U.S. mainland and international markets via high-speed third generation technologies. The high productivity of the workforce and the superior quality of products has led many companies to operate more than one plant on the island. Labor costs are significantly lower in Puerto Rico than on the U.S. mainland. Although the U.S. federal minimum wage of $5.15 an hour applies, a favorable wage differential exists on the island. The Puerto Rico Electrical Power Authority has a diversified generating capacity of approximately 5.538 megawatts and an island-wide grid providing industrial users with the electrical power they need. Nearly 10,000 miles of water mains and aqueducts, and existing waste treatment facilities throughout the island provide ample access to water supplies. Strategic Location

Strategic Location

Puerto Rico is right on the intersection of trade routes from North America and Europe to Latin America and the Caribbean. This is an important strategic location that provides firms operating in Puerto Rico with a sustainable competitive advantage on distribution networks. The fact that Puerto Rico is just a few hours away from major Latin American and North American ports, and accessible to European and Asian locations is a major advantage to companies operating in Puerto Rico. Whether by air or sea, your products can reach your major destinations rapidly and efficiently. No wonder Puerto Rico is considered the key to the Americas.

In addition to its perfect location, Puerto Rico has the infrastructure to make it happen, with all airports and seaports located no farther than 2 hours from any point on the Island, facilitating the process of shipping your product anywhere in the world quickly and efficiently, and of course, shipping to the U.S. Mainland is deemed domestic which provides an additional economic benefit.

Puerto Ricans are U.S. citizens since 1917. The Island is divided into 78 municipalities with local mayors and municipal assemblies at the helm. Elections for political positions are held once every four years. Puerto Rico has cultivated a vigorous democratic tradition, very similar to the U.S., which is exhibited by the Commonwealth’s high voter turnout, traditionally at a rate of more than 80 percent. Residents of the island may vote in Presidential primaries, but not in the general election. The U.S. Dollar is the island’s currency. Residents pay local income taxes while contributing to the U.S. national Medicare and Social Security systems. All U.S. labor, safety, minimum wage laws and standards apply. Duty-free access to the United States and economic incentives encourage heavy investment in Puerto Rico.

The stability afforded by its relationship with the U.S. has enabled Puerto Rico to successfully shift from an agricultural economy to a robust and varied industrial economy. Puerto Rico’s air, sea and land transportation system makes the Commonwealth the transportation hub of the Caribbean. As one of the most densely populated islands in the world, the people of Puerto Rico represent a vibrant cultural and racial mix of European, African and modern Caribbean influences.