What You Need to Know About Puerto Rico’s Goverment

What You Need to Know About Puerto Rico’s Goverment


With the new PROMESA law, changes are in progress. PROMESA gives power for oversight of the Puerto Rico government to a 7-member, bi-partisan board appointed by the United States Congress. This page will be updated as new information is released.

Here is an article with details on the current PROMESA board appointees.


Puerto Rico’s Commonwealth Status

As a Commonwealth of the United States, Puerto Rico is part of the US but does not have the same status as a state. Citizens of Puerto Rico are citizens of the US and are entitled to a US passport. Any citizen of a country with travel rights to the US can travel freely to the US.

Puerto Rico is self-governing for internal matters and established its own constitution in 1952. Its chief of state is the President of the United States, and Puerto Rico itself is under the protection of the US military. Puerto Rico elects a Governor as its head of state, governing all internal affairs. US citizens who are residents of Puerto Rico may not vote in US presidential elections, and Puerto Rico does not have elected representation in either house of the US Congress, although a single resident commissioner from Puerto Rico has a voice, but cannot vote.

Puerto Rico corporate entities are considered foreign corporations according to US laws, a distinction that is important when considering your strategy if you are considering relocating. Contact us to discuss more how this may impact you.

Residents of Puerto Rico who earn their income by work done in Puerto Rico (or investments made while formally residing in Puerto Rico) are not subject to tax by the IRS; instead, US citizens in Puerto Rico pay tax to Hacienda, the Puerto Rico internal revenue organization.


Puerto Rico’s Legislative and Judicial Systems

With few exceptions, Puerto Rico is subject to all Federal laws and regulations put in place by the US government. Most relevant US agencies have representation within Puerto Rico.

The island is divided into 78 municipalities, each of which is governed by a mayor and municipal assembly. The senior legislative bodies consist of the 27-member Puerto Rico Senate and the 51-member Chamber of Representatives. All of these political positions are put in place by popular election and last for a term of 4 years.

Puerto Rico’s judicial system is directed by its Supreme Court, which consists of 7 judges appointed by the Governor. The system includes a Court of Appeals, a Superior Court, a District Court, and Municipal Court.


Puerto Rico’s Government Agencies

Here is a partial list of government agencies and offices you may find to be a helpful reference:

  • AT: Land Administration (Department of Economic Development)
  • DDEC: Department of Economic Development and Commerce
  • DH: Department of Finance
  • DTRH: Department of Labor and Human Resources
  • Hacienda: Treasury Department
  • JR: Review Board and Use Permits
  • La Fortaleza: Governor’s Office
  • PRIDCO: Puerto Rico Industrial Development Company (Department of Economic Development)
  • Promoexport: Trade and Export Company of Puerto Rico (Department of Economic Development)
  • OCIF: Office of the Commissioner of Financial Institutions
  • OGPe: Permit Management Office
  • OIGPe: Office of Inspector General Permit
  • OITE: Office of Industrial Tax Exemption

[Please note that the acronyms commonly used as names of agencies, by both English and Spanish speakers, reflect the original Spanish-language full names of the agencies. The acronyms listed above are what is commonly used by all; the full English-language names listed are the official translations of the full Spanish-language names of the agencies.]

Official directory of government agencies (note that this site is in Spanish – if you are not fluent, the Google translate feature will be your friend here)
Hacienda official site (also in Spanish)

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

Puerto Rico’s Economy: Land of Opportunity

Puerto Rico’s Economy: Land of Opportunity

Puerto Ricos Economy

Most of what has been covered in the news lately is Puerto Rico’s debt, and there is no doubt that this is a serious issue. Currently, the new PROMESA board is at work to determine the plan to restructure Puerto Rico’s debt, and plan what changes may go with it to ensure ongoing accountability.

What is not included in these news reports is the stunning opportunities for new business growth that the island and all its many advantages make possible. In addition to incredible, world-class tax incentives, Puerto Rico is also attractive in other ways. These opportunities are very likely to continue since they are part of the means for improving the economy long-term. (There have been no signs that the recent passage of the PROMESA bill by the US Congress will negatively impact the ability or intention of the Puerto Rican government to continue to incentivize economic growth and recovery through the excellent legal tax advantages that it currently makes available to its legal residents.)

Beneficial for Businesses

Puerto Rico is a great place to do business for many industries. A number of fortune 100 companies have established operations here, including 10 of the world’s top 20 pharma and biotech companies; 2 Fortune 1000 companies are even headquartered in Puerto Rico. And out of 174 active Foreign Trade Zones, Puerto Rico ranks 13th in imports and 11th in exports (report reference from 2012).


  • Puerto Rico’s tax incentives are world class!
  • All needed infrastructure is in place.
  • The tax incentives are creating an entrepreneurial environment, where it is easy to meet potential business partners.
  • For many people, Puerto Rico’s weather, beaches, and beautiful places to live make it a very desirable place to relocate, so some employees and business partners may be easy to convince.
  • PR has a bilingual population.
  • One of the best engineering schools in the country is located in Mayaguez, and US companies heavily recruit all types of Puerto Rico STEM graduates.
  • Puerto Rico is very accessible by air travel, with many non-stop flights daily from New York and other major US cities.


Puerto Rico Has the Most Developed Economy in Latin America

Puerto Rico’s annual gross domestic product is about $100 billion. The economy is already strong in the following sectors:

  • Manufacturing
  • Pharmaceuticals
  • Electronics
  • Processed foods
  • Clothing
  • Textiles
  • Service
  • Tourism

Technology is a growing industry, and some predict it may be the next big wave.

Future Plans for Economic Development

Puerto Rico is currently still losing some of its most highly educated residents to higher paying jobs in other locations. Many of the plans to improve the economy involve creating additional and more substantial jobs locally, to retain top talent on the island. Attracting more business to Puerto Rico naturally also impacts the economy indirectly by creating more services jobs to support these businesses and new residents relocating to Puerto Rico.

The PR government’s plans include encouraging growth in Manufacturing, Services, and Tourism businesses. Act 73 (the Economic Development Incentives Act) and Act 20 (the Export Services Act), have been put in place to attract new businesses of these types to the island, to create new jobs for Puerto Rican residents, and to boost the local economy. The Tourism Development Act has been put in place to offer tax credits and exemptions for businesses constructing and operating tourism endeavors.

Puerto Rico is fortunate to be located in an advantageous geographic position along the Mona Passage, between the Atlantic Ocean and the Panama Canal. Puerto Rico’s Port of the Americas is designed as a modern, containerized import/export and transshipment cargo facility. Located in Ponce, Puerto Rico’s second largest city, on the southern coast, it is also very near to Mercedita International Airport (PSE).

With Act 214, Puerto Rico embraces innovation via the Science, Technology, and Research Trust. The Trust provides access to grants for projects involving technology commercialization, research, and the creation of science and technology jobs.

Plans are also underway to transform the former Roosevelt Roads Navy base into a diverse community including tourist attractions, residential properties, schools, and hospitals.

Read more about these and several other plans in progress to stimulate Puerto Rico’s economy in the official government report. Feel free to contact us with any questions.


Puerto Rico government report on current economic indicators

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

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