Not since the height of Puerto Rico’s economic industrialization in the 1950s has there been a more crucial time to invest in the Island’s future. Puerto Rico’s economy, and its people, have endured many trials for many years including bankruptcy, a shrinking population and a decimated construction industry. All culminating with the devastating strike of two major hurricanes in 2017. With that in mind and in order to better focus the creation of a long-term strategic plan to promote Puerto Rico, a newly formed promotional entity - Invest Puerto Rico - was devised.
The new entity was created by law as an independent, non-partisan, non-profit investment promotion engine that will strategically position the island as the right place to do business. It will also enhance any tool available to best communicate the potential impact of many local and federal advantages that can be utilized by any serious investor in the Island.
One such tool is the designation of more than 94% of the Island as a federal Opportunity Zone, a game-changer for Puerto Rico. The Opportunity Zones program is a community development initiative established by Congress to encourage long-term investments in low-income communities nationwide. It offers investors and businesses a variety of benefits, including a deferral of reinvested tax gains until December of 2026, a reduction of reinvested gains by 15 percent under certain conditions, and federal income tax-free appreciation for investments held for at least 10 years.
With an estimated $5 trillion in unrealized capital gains available to redeploy in distressed communities and significant interest already shown in such key sectors as real estate development, tourism and energy, the Opportunity Zones program is a powerful tool that Puerto Rico seeks to leverage and catalyze its economic transformation. In fact, the Government is committed on the opportunity and is already supporting this program with a series of initiatives that include expedited permitting and regulatory approvals to promote Opportunity Zones and new proposed legislation to enhance tax-free investment appreciation.
The many benefits of Opportunity Zones add to Puerto Rico’s existing value proposition which includes stability under U.S. laws, attractive tax incentives, prime geographic location, and an educated, skilled workforce. All of this sets the stage for the attraction of successful and serious investors to develop projects throughout the Island mostly focusing on mix-use developments, energy revitalization, housing construction and general infrastructure. The right amount of investments could both benefit the long-term investor and reignite Puerto Rico’s economy into a bright new era of sustained economic development.
As a proud Puerto Rican entrepreneur, there is no doubt that our Island is an unparalleled investment destination. Given the very encouraging set of circumstances that are aligning, now more than ever, Puerto Rico is in the throes of a required transformative period were the private and public sectors can partner with the right investors and take advantage of the many opportunities and new tools now available to successfully establish sustainable and thriving businesses on the Island. The time is now.