Expanding your Business Internationally via Puerto Rico

Expanding your business to new global markets can be an exciting new step for your company. Whether it's a growth strategy, technological edge, or your product has a better fit with other audiences, international markets have a lot of opportunity. And operating from Puerto Rico may be the best start for successful expansion. 


Look Before You Leap

With opportunites there's also challenges. As this article by Eric Samson on Entrepreneur.com describes, there are many challenges to expanding globally, one of the most important being whether "you have the "right" product and the "right" brand that local customers will be drawn to." It's important to have the right framework before you leap. 

Some of the questions you'll want to ask yourself before expanding to a new market are: 

  1. Is your business fundamentally sound?

  2. Do you have enough human resources to lead expansion efforts?

  3. Are you prepared to hire overseas workers if that’s necessary?

  4. What will you have to change about your business or offerings to adapt to local culture?

  5. Are you familiar with local strategies for effective selling?

  6. Is there a way to take market share from existing competitors in your new target markets?

  7. Will you need to partner with a local?

  8. Can you absorb the start-up costs of overseas expansion?

  9. Are there regulatory issues that limit your potential business growth?

  10. Is selling online a better alternative given your available resources?

Once you answer these questions and consider how you may want to test entry in a new market. You can explore a pilot program with local customers before you move all of your operations. This gives you the chance to test the full sales cycle, customer relations, cultural expectations, and other aspects of doing business in a new country prior to making larger financial commitments. 


Puerto Rico: Bridging the Gap

Puerto Rico is physically located in the Caribbean, between North and South Americas and has many advantages for American companies to expand internationally. As part of the United States, Puerto Rico is under the federal legal jurisdiction, including intellectual property protection. What's more, you keep your US Citizenship without having to the pay worldwide taxation since you're still in the U.S. 

Puerto Rico is a bilingual territory with most of the poplation fluent in Spanish as well as knowing English. Having a bilingual staff is a pretty good way to start expansion in another Spanish-language country. 

Export Services Tax Incentive

If you're planning to export your services to other countries, doing so from Puerto Rico gives you more tax advantages than anywhere else in the world. By moving operations to Puerto Rico and creating at least 5 jobs, your company may be eligible for 4% corporate tax rate and 100% tax exemption on dividends. 

Manufacturing Tax Incentive

If you manufacture a product, either for the US market or abroad, you can also benefit from Act 73, which also gives a 4% fixed income tax rate and 100% tax exemption on dividend distributions, along with other deductions and credits, such as 50% tax credit on elegible R&D costs.

Want to know more about Puerto Rico's tax incentive for Export Services? Read our Guide to Act 20.



22 Nov 2016

By PR Business Link