Country report Puerto Rico

Economic overview

Puerto Rico’s GDP diminished by 2% in 2019. That was halfway because of the public authority’s more tight monetary position, catastrophic events and a diminishing populace. Nonetheless, re-building endeavors made after Puerto Rico was hit by its greatest seismic tremor in a century in January 2020, ought to incompletely pad the lull. 

As indicated by the refreshed IMF gauges from fourteenth April 2020, because of the episode of the COVID-19, GDP development is required to back off to – 6% in 2020 and get to 1.5% in 2021, subject to the post-pandemic worldwide monetary recuperation. 

The Puerto Rican economy has been languishing a downturn over longer than 10 years, which has prompted elevated levels of obligation. In 2019, public obligation spoke to 58.9% of GDP, and it keeps on developing. 

It is required to arrive at 61.5% of GDP in 2020, and 62.9% of GDP in 2021. As per the IMF, the overall government balance in 2019 was equivalant to – 3.3% of GDP. Expansion has been contained at 0.7% in 2019, and is required to diminish to – 1.5% in 2020 and increment to 0.6% in 2021 (April 2020 World Economic Outlook IMF).

Main sectors of industry

Puerto Rico has limited natural assets, with arable land being one of the nation’s most significant regular assets. Notwithstanding, in spite of its significance, just 6% of the island’s complete region is viewed as arable. All things considered, Puerto Rican horticulture produces sugar stick, espresso, pineapple, plantains, creature items and chickens – among different items. 

Puerto Rico faces a few difficulties in accomplishing full usage of its agricultural potential, basically because of the low number of individuals ready to work in the agrarian area. Subsequently, the island imports about 85% of its food needs, despite the fact that a large portion of their territory is fruitful. In general, agribusiness represents only 0.7% of Puerto Rico’s GDP and utilizes 2.1% of the workforce. 

The Puerto Rican industry area chiefly creates drugs, electronic gadgets, petrochemicals, handled nourishments, garments and materials. All in all, the nation’s business has moved from mechanical creation depending on work (food industry, tobacco, copper and materials) to a capital-based assistance industry. Industry represents half of GDP and utilizes 19% of the workforce. 

The service industry’s main sectors incorporate the travel industry, money, protection, exchange, land, transportation and utilities. Services represents to the second biggest offer in the Puerto Rican economy, with 41.5% of GDP, and it utilizes 79% of the workforce.

Taxation for businesses

A domestic organization is taxable in Puerto Rico on its overall pay. An unfamiliar partnership occupied with exchange or business in Puerto Rico is charged at the ordinary corporate duty rates on pay from Puerto Rico sources that is viably associated pay. On account of non inhabitant unfamiliar organization a 29% retention charge (WHT) rate is appropriate on its Puerto Rico-source net pay not viably associated with a PR exchange or business. 

A 10% duty is forced on certain company on the regarded profit sum owing to an unfamiliar proprietor. 

A surtax of 50% is forced on organizations that inappropriately amass profit to forestall the inconvenience of duty on investors or accomplices as opposed to delivering the income out as dividends.

Investing in Puerto Rico

Puerto Rico offers the appeal of a tropical island in the Caribbean with the security of being a region of the USA. 

Notwithstanding its special allure of being a tropical heaven in the Caribbean and a US Jurisdiction with all the solaces and securities gave by US Federal law, Puerto Rico has set up a bunch of exceptionally appealing motivating forces intended to pull in venture from high total assets people, void nesters and retired folks. 

Puerto Rico is additionally effectively open from the US terrain by means of short, day by day, direct flights. The island has 11 air terminals, 3 of which invite direct worldwide flights. 

As one of the main destinations in the Caribbean, Puerto Rico offers the occasion to appreciate an exceptionally high caliber of life.