Caribbean Business
EDITORIAL: Rebirth of the Shining Star - Caribbean Business - 27/03/12
For nearly a decade now, Puerto Rico has been stuck in an economic slowdown, with negative growth for six-straight years, high double-digit unemployment, labor participation languishing at a low of 40% and no end to the debacle in sight. Puerto Rico, once the Shining Star of the Caribbean and a model for industrialization across the world, lost its luster....
Source: Puerto Rico News
Published: 2012-04-01 11:43:24 GMT
EDITORIAL: Rebirth of the Shining Star - Caribbean Business - 27/03/12
via Puerto Rico News on 4/1/12
For nearly a decade now, Puerto Rico has been stuck in an economic slowdown, with negative growth for six-straight years, high double-digit unemployment, labor participation languishing at a low of 40% and no end to the debacle in sight.
Puerto Rico, once the Shining Star of the Caribbean and a model for industrialization across the world, lost its luster. A manufacturing industry, that had long lost its competitive edge to other countries that were already starting to offer lower wages and excellent incentives in the mid-1970s, was no longer the only game in town. Decade by decade, a permit bureaucracy grew to intolerable levels and labor laws became prohibitive to the point that Puerto Rico became a very unattractive place to do business.
Today, thankfully, we are seeing the prospects of renewed economic activity-with two-straight quarters of positive growth-giving many investors the confidence to bet on Puerto Rico once again. The Gov. Luis Fortuño administration's new model, offering bold incentives for both local and foreign companies to establish operations in Puerto Rico, is largely responsible for the island's renewed attractiveness.
Armed with a comprehensive empowerment strategy, the Puerto Rico Industrial Development Co. (Pridco) is spearheading the crusade to put Puerto Rico back on the world map. Pridco's Economic Development Model (MENE by its Spanish acronym) is driven by a host of incentives for the establishment of new business across industries.
The Economic Incentives for the Development of Puerto Rico Act-the economic-development plan's backbone-provides a whole host of attractive incentives, including tax credits for businesses established to render services on a commercial scale for foreign markets or for other eligible businesses in Puerto Rico.
The broad array of benefits to businesses under this law's umbrella includes tax incentives (as low as 4%), credits for research and development, tax credits as high as 50% of costs of investment in machinery and as much as a 90% exemption from property taxes.
The incentives list goes on and on: for job creation; for the manufacturing of furniture; for Pridco-promoted companies that improve properties belonging to Pridco; for the film industry; for scientific research and development; for banking and finance; for developers who invest in eligible tourism-related projects.
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