Incorporating a business in Puerto Rico provides foreign investors with many of the same advantages of doing business in Latin America as they would at home. You could form a corporation on Atlantic Beach in San Juan, Puerto Rico.
Hiring locals through a PEO could be a good option for those who only intend to dabble in the Puerto Rican market temporarily or on a smaller scale.
You can get to work in the time it takes to find the right people when you use a PEO here instead of setting up and then dissolving a local company.
Investors love Puerto Rico because
It’s a U.S. territory in the Caribbean between the Dominican Republic and the US Virgin Islands that has a population of about 3.2 million and a GDP of $103.1 billion as of 2020.
Even though the COVID-19 pandemic caused a slight drop in GDP compared to the previous year, the Puerto Rican economy fared better than others in the region.
With a GNI per capita of $21,740 in 2020, it remains one of the most prosperous territories in Latin America and the Caribbean, surpassed only by the Bahamas.
Once known for its sugar production, today it boasts a thriving and diverse economy, with a manufacturing sector that accounts for more than half of GDP and is a major draw for foreign investors. Pharmaceuticals, medical equipment, clothing, and computers all rank among the most important manufactured exports to this country.
It relies heavily on the tourism industry. Because of the high level of English proficiency on the island, call centers are another rapidly expanding sector of the economy.
There are three foreign trade zones in the United States and its territories, also known as free trade zones (FTZs), on the island of Puerto Rico, which offer attractive financial benefits to enterprises based there. In addition to them, the island’s sizable tourism industry brings in a lot of money from elsewhere.
Besides having significantly stronger infrastructure than many other countries in Latin America and the Caribbean, Puerto Rico’s status as a colony of the United States means that local firms can confidently transact in dollars.
Most of its trade is conducted with the continental United States, however, thanks to the United States’ participation in several free trade agreements, local enterprises also enjoy privileged access to a variety of key global and regional markets (FTAs).
How to form a corporation in Puerto Rico
Company incorporation here requires the following main steps, which are highlighted below after some context is provided regarding why the territory is an attractive investment destination.
Incorporating a company requires the following five steps:
Put down a deposit on the company name in Puerto Rico
Reserving a business name is the first step in the incorporation process. This requires checking official databases for availability and similarity to existing brands before moving forward with a name.
Designate a personal representation
Appointing a legal representative is necessary if you plan to be out of Puerto Rico for an extended period while still being responsible for managing your business affairs there. A power solicitor is required to appoint someone to act on your behalf, such as by signing legal documents.
Makeup rules for running the business
Assuming these two things are in order, the next step is to draught the bylaws of the company, which will detail the operations, structure, goals, and shareholders of the business.
Company registration
Once the bylaws have been drafted, the company can be registered with the Puerto Rico Chamber of Commerce and other relevant local authorities.
Create a business checking account
Opening a corporate bank account is the final step in forming a corporation and is where all business transactions will be processed. In light of your location and line of business, your solicitor should be able to recommend the most suitable service providers.
