It’s more than just an island vacation destination. Puerto Rico offers a lot of good benefits, especially for United States citizens and businesses. Between the cost of living, tax rates, and other incentives, there are many good reasons for doing business in Puerto Rico.
Why is Conducting Business in Puerto Rico a good idea?
There is a large potential market for your goods and services. Puerto Rico’s northeastern Caribbean location draws travelers to the island. Its sandy beaches and year-round tropical climate make it an appealing destination. With few storms and year-round pleasant temperatures, Puerto Rico is close to the mainland United States of America, Central America, and South America.
Tourists return to enjoy the excursions, the region’s rainforest activities, caves, and active Caribbean nightclubs and bars.
Tourism is responsible for billions of dollars in revenue annually. In 2010, over ten million people flew into Puerto Rican airports. Those who visit spend money supporting the island’s many American businesses.
By 2019, tourist consumption had generated over five and a half billion US dollars in Puerto Rico.
Travelers from all over the world come to experience Puerto Rico’s unique rainforest, the many tourist sightseeing activities, caves, excursions, and active Caribbean nightlife. The tropical climate, local foods, and tourist-oriented shopping and activities make it a natural tourist draw. While they are there, tourists enjoy the low sales taxes afforded by Puerto Rico’s economy.
Puerto Rico is a protected United States Territory. Thus, it offers appealing incentives to American corporations. These perks encourage them to locate a business in Puerto Rico. Most other Caribbean countries do not provide this financial encouragement.
Let’s look at some of the other perks of doing business in Puerto Rico:
- Puerto Rico also offers businesses duty-free imports.
- Property taxes are low.
- Real estate is relatively inexpensive.
- Corporate tax rates are appealing.
- During your first year of doing business in Puerto Rico, both real estate and personal property taxes are exempt.
This encourages businesses to set up their companies there. Other incentives are proposed for bylaws 20 and 22. These provide notable savings for Americans who relocate to Puerto Rico.
Higher education is very inexpensive in Puerto Rico. Consequently, many of the island residents have college degrees. When setting up a business, Americans can hire well-educated employees. Even though the workforce is highly educated, the hourly rate is still below American mainland standards.
Anxious for entrepreneurs to relocate to Puerto Rico, the island offers some exciting opportunities.
Its many attractive qualities make Puerto Rico an ideal location for businesses to launch new products and services. Visitors are well acquainted with established brands and anxious to spend their money on these brands that are so much a part of the American culture.
Challenges of Doing Business in Puerto Rico
While there are many advantages to consider in starting a Puerto Rico business, there are also some potential problems.
The economy in Puerto Rico is not as stable as it once was. The island is in the grips of economic uncertainty. It’s continuing to rebuild.
Taxes have increased. This may be catastrophic for small-to-medium-sized businesses.
This past July, Puerto Rico’s sales tax was increased from seven to eleven and a half percent in an effort to increase Puerto Rico’s revenue. This has made tourist shopping not nearly as appealing. As a result, tourist spending is down significantly.
CNBC also notes that the cost of living in Puerto Rico has risen sharply. Employees are now demanding higher wages to make ends meet.
Puerto Rico labor is not the bargain it once was. It is now subject to the same federal minimum wage laws as mainland America. Hence labor has increased over most other Caribbean islands.
Tax Benefits of Doing Business in Puerto Rico
The weather is perfect, the nature is beautiful, and the people are friendly, but sometimes business decisions need to be made based on simple bottom lines.
Here are a few highlights of the tax benefits of doing business in Puerto Rico:
- No capital gains tax
- Very low corporate tax rate
- Income not subject to U.S. income tax
When you add up all of the savings that could mean for your company, the financial benefits of conducting business in Puerto Rico really speak for themselves.
From a business perspective, Puerto Rico has many of the benefits of outsourcing to a smaller, more affordable country, without the inconvenience of leaving the US. The geographical distance isn’t far, and no passport is necessary for US citizens. Plus, you won’t deal with currency exchange rates since the United States dollar is the official currency.
Remote and Small Business in Puerto Rico
The COVID-19 pandemic has fundamentally altered our views on working in a permanent office. If you’re a freelancer, a remote worker, or are thinking of starting a small business in Puerto Rico, prepare to be very tempted to book a ticket to Puerto Rico.
We’ve already discussed the tax and financial benefits, but let’s not forget the opportunity to spend your lunch breaks, evenings, and weekends in a literal tropical paradise. From art galleries to bird watching to delicious food, you’re definitely not going to feel bored.
Many aspiring digital nomads dream of moving to a distant foreign land for a great adventure, but they eventually give up when they realize the hassle of arranging visas and other immigration issues.
Not in Puerto Rico!
US citizens are able to travel to the US territory as if it were any of the 50 states, so no special paperwork is required. Want to go for a week with the option to extend your stay to six months? No problem at all.
Another benefit is the time zone. It’s in the Atlantic Standard Time Zone meaning you’ll spend have the year on east coast time, and the other half just an hour out of sync. In other words, you won’t be scheduling video meetings in the middle of the night if you’re dealing with people in the USA.
Advertising Your Business
Tax benefits and work-life balance are only part of the equation. What about trying to market your business to all the locals and tourists of Puerto Rico?
Billboards are big in Puerto Rico because of the car culture and some strategic city locations, and the effectiveness of outdoor advertising has been proven time and again. Just close your eyes and imagine Times Square in New York City. One of the first things you’ll think of is billboards of all shapes, sizes, colors, and types.
San Juan has its own version of that, called La Placita de Santurce is a must-visit destination on its own, but it’s also a great place to get your advertising into the eyes of your customers.
If you’d like to strategically place billboards around the island, browse our listings to see some of the best options.
Why Billboard Advertising is Effective in Puerto Rico
In both traditional and digital formats, billboard advertising has been very effective in Puerto Rico.
Billboards are so appealing in this island paradise because of the high density of both vehicle and foot traffic.
Puerto Rico has a new, sophisticated highway system. The island also has a love of cars not unlike mainland USA.
Traffic density on Puerto Rico’s roads is almost 750 cars per thousand inhabitants. It is little wonder that companies large and small make use of outdoor advertising. These billboards are viewed by thousands of locals and tourists every day.
In a survey, one in every four Puerto Rican travelers said they were motivated to visit a business on the day they viewed its billboard.
When it comes to outdoor advertising, Puerto Rico is a natural Caribbean magnet. It is home to such large advertisers as Coca-Cola, Wal-Mart, Sears, and Macy’s. In addition, hotel chains like Hilton, Marriott, and Holiday Inn use billboards to attract the attention of both locals and tourists.
Imagine thousands of tourists basking in the sun year-round on Puerto Rico’s beaches. They are a ready market for international retail chains, pharmaceutical companies, restaurants, and nightlife facilities.
Billboards are an effective way to increase brand recognition, launch a new product, or highlight a special event.
Challenges of Billboard Advertising
As in real estate, billboard advertising is dependent upon location.
If your company does not do its research beforehand, you may erect a billboard where your target market is not going to see it.
Placement is crucial to outdoor advertising success.
The message must be seen and read in the few seconds it takes to drive by your billboard. So, what you have to say must be catchy, engaging, and memorable.
The graphics and design of your billboard must reflect the image of your brand. It must be unique enough to provide lasting brand recognition.
In outdoor advertising, color, size, and special effects make a billboard effective.
While billboards are a relatively inexpensive way to advertise, you still need to consider how to get the most from your brand’s advertising dollar.
Why Hire an Outdoor Advertising Media Specialist?
An outdoor advertising media specialist can deliver an effective message to your target market. The trained media specialists are experts at finding the best location. They know how to create a message that is memorable and can be internalized in the short time it takes to drive by the billboard. Media specialists offer an advertising medium that builds brand recognition, brand clarity, and encourages viewers to become consumers.
Talk to an outdoor advertising media specialist about how to make the most effective use of your advertising dollars. For more information on how to make your advertising budget more effective, contact bMedia Group. bMedia are experts in doing business in Puerto Rico.