Puerto Rico is an attractive option for foreign direct investment (FDI) thanks to tax incentives and the advantages of being an unincorporated territory of the US.
According to SelectUSA, the biggest investors in Puerto Rico come from Germany, Spain, Canada, Mexico and Venezuela, while the top industry sectors for foreign investment in terms of the number of projects are communications, food and beverages, pharmaceuticals, business services, and software and IT services.
How Puerto Rico is attracting FDI during the Covid pandemic
The Covid-19 pandemic has also impacted the country, with lockdown restrictions having been imposed since March 2020, although they are starting to be slightly eased. Despite this complicated situation, Invest Puerto Rico, the country’s investment promotion agency, reported an increase of 32% in leads and engagements in the pipeline during the April-July 2020 quarter.
Invest Puerto Rico’s report for that quarter highlights a focus on the reshoring of bioscience companies. “Because of Covid-19 pressures, the sector globally is ready to reshore and Puerto Rico is ready to perform immediately,” says the report.
The office market is also underlined in the report, which points out that San Juan – the country’s capital city – boasts the third-largest office market in the Central America and Caribbean region, after Panama and Costa Rica, and is the 12th largest in Latin America. The office market is also competitive when compared with the US.
“Average rents for Class A office space (which represents a majority of the commercial market) are highly favourable when compared with other metropolises across the US, particularly when considering the quality of life, cost of living, market access and other amenities,” says the report. “Comparable rents in Miami are double San Juan, and in San Francisco they are 4.5 times higher.”
Another draw for foreign investors in Puerto Rico is its bilingual workforce, which is fluent in both English and Spanish. However, the archipelago is highly susceptible to natural disasters, with Hurricane Maria in 2017 causing major destruction in the country and becoming the second-deadliest US storm in over a century.
Puerto Rico benefits from its relationship with the US when it comes to FDI and attracting foreign investment has long been a priority for the archipelago’s government. As the Covid-19 vaccine is deployed and lockdown restrictions are eased, it will soon be seen how foreign investment takes shape in a post-pandemic Puerto Rico.