Investing in Puerto Rico: Common Misconceptions

Investing in Puerto Rico: Common Misconceptions

When it comes to investing, there are a lot of misconceptions that can hold us back from making profitable decisions. One such place that has faced its fair share of misconceptions in recent years is Puerto Rico.

Puerto Rico, a US territory, has been a hub for tourism and business for decades. However, in 2017, Hurricane Maria devastated the island, causing extensive damage. Most devastating was the loss of life and homes, but the hurricane also hurt Puerto Rico’s economy further.

Despite these hardships, there has been a renewed interest in investing in Puerto Rico. So, let’s explore some of the common misconceptions that might hold investors back from considering Puerto Rico.

Misconception #1: Puerto Rico is not a part of the US

Although Puerto Rico is not a state, it is a US territory. The island has been a territory since 1898. Puerto Ricans are US citizens and have been since 1917. However, Puerto Ricans cannot vote in the US federal elections. In addition, the territory does not have a vote in Congress, and its representative in the House is a non-voting member.

This means that investing in Puerto Rico has unique benefits and risks, but it is not a foreign investment in the traditional sense.

Misconception #2: Puerto Rico is not ready for investment after Hurricane Maria

It’s true that the hurricane caused significant damage to the island’s infrastructure, including its energy grid and telecommunications systems. However, the Puerto Rican government, with the help of the US government, has been working hard to rebuild the island.

President Joe Biden signed a number of executive orders to assist Puerto Rico in its recovery process, including a push for renewable energy development as part of the island’s grid transformation. Investment in this renewable energy development has great potential for investors.

In addition, the Puerto Rican government has been working hard to improve its tax incentives, making it more attractive for businesses and investors. The island’s location and access to the US market make it an attractive location for manufacturers and other industries.

Misconception #3: Investing in Puerto Rico is risky

Every investment comes with some level of risk, and Puerto Rico is no different. However, many of the risks that come with investments in other regions do not apply to Puerto Rico.

Puerto Rico does not have its own currency, so there is no currency risk to consider. Additionally, the tax incentives in Puerto Rico have been stable for decades. These incentives are designed to make it more attractive for businesses to invest on the island. The government has been examining these incentives to make them even more attractive, which bodes well for investors.

Misconception #4: The Puerto Rican government is corrupt

There have been political scandals in Puerto Rico, just like there have been in other parts of the world. However, it’s essential to recognize that corruption is not inherent to the people of Puerto Rico nor its government. Moreover, there have been improvements in recent years in transparency and overall political stability.

The pandemic has been an excellent test of the island’s political stability, and the government has emerged with a good handle on the situation.

Frequently Asked Questions (FAQs)

Q: What are the primary advantages of investing in Puerto Rico?

A: There are several advantages, including geographic proximity to the US, a stable tax environment, and a cooperative government that is working to improve the investment environment.

Q: What types of investments are available in Puerto Rico?

A: As Puerto Rico is a developing region, there are many opportunities for investment in sectors like real estate, manufacturing, and renewable energy.

Q: What are the tax incentives for investors in Puerto Rico?

A: There are various tax incentives for investors in Puerto Rico, including the exemption of federal taxes on profits earned in the territory.

Q: Can US citizens invest in Puerto Rico?

A: Yes, US citizens can invest in Puerto Rico. In fact, investing in Puerto Rico is not considered a foreign investment in traditional terms.

Q: What is the political situation in Puerto Rico?

A: Puerto Rico has had its share of political scandals, but it is now considered stable, with an elected governor and legislature.


Overall, investing in Puerto Rico has become more attractive in recent years. The island’s government has worked hard to improve its investment environment, and the US government has provided financial aid to rebuild infrastructure. While there are always risks involved in investing, Puerto Rico’s location and economy make it an attractive investment location. By doing good research on market factors, potential partners, and tax advantages, investors can make advantageous deals that benefit their interests and the local community.

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