Foreign investors have been showing increasing interest in doing business in Puerto Rico over recent years, thanks to favourable market conditions and a host of unsaturated opportunities. For those interested in entering the market, there are five essential steps that must be followed to complete company formation in Puerto Rico.
Located in the Caribbean between the Dominican Republic and the US Virgin Islands, the US territory of Puerto Rico had a population of 3.19 million in 2019. That year the island registered a gross domestic product (GDP) of $104.99 billion, and a gross national income (GNI) of $21,970 — a marker of prosperity not exceeded by any mainland Latin American country.
One of the biggest draws for investment in Puerto Rico is the island’s well-established manufacturing base, with industry contributing more than half of GDP in 2018, while services accounted for slightly less. The country is also a growing innovation and startup hub, boasting a wealth of local tech talent at competitive rates.
These factors, along with the fact that Puerto Rico’s status as a US territory means it uses the US dollar and counts on better infrastructure than many other Latin American or Caribbean jurisdictions, while also offering significant tax incentives to investors, have seen growing levels of foreign direct investment (FDI) entering into the market.
While the vast majority of Puerto Rico’s foreign trade is with the mainland United States, US participation in a range of free trade agreements provides locally-based businesses with preferential access to numerous significant or nearby markets around the region, including Canada, Colombia, the Dominican Republic, and Mexico.
If you are interested in company formation in Puerto Rico, read on to understand the five steps involved in the incorporation process, as well as some of the benefits of working with a company formation agent. Or go ahead and contact us to discuss how we can help you get to work.
5 steps for company formation in Puerto Rico
The process for company formation involves following these five key steps:
1. Reserve a company name
The first step towards company formation in Puerto Rico is to reserve a company name. This will involve checking against official databases to make sure that no other business is trading under a similar name.
2. Appoint a legal representative
If you are not planning to be permanently present in the territory, you will need a legal representative, who will be able to act, respond, and sign documents on your behalf. They must be appointed via a power of attorney, which a legal representative with sufficient professional experience will be able to help draw up.
3. Create the company bylaws
The next step is to create the company bylaws, which will be an essential part of the registration process. The bylaws describe the activities of the company, as well as its structure, objectives, and shareholders.
4. Register the company
The fourth step in the process of company formation in Puerto Rico is to register the company before local authorities, including the Puerto Rico Chamber of Commerce, which your legal representative will be able to help you to do.
5. Complete company formation in Puerto Rico by opening a corporate bank account
With the company registered, the final step to complete company formation in Puerto Rico is to open a corporate bank account. Your legal representative will be able to advise you on potential account providers based on your location and business activity.
How can a company formation agent help?
A company formation agent in Puerto Rico will have the legal training and experience to help you go through business formation as smoothly as possible. That individual or firm will have a firm grasp of the administrative demands involved, and will be able to help complete all necessary paperwork in order to get your entity off the ground.
Below, some of the main advantages of working with a good company formation agent are considered:
Specialist advice: A company formation agent will be able to give you bespoke legal advice on the likes of which entity type best suits your needs, as well as any recent or upcoming changes to local regulations that you may want to take into consideration.
Efficient processing: Your company formation agent will be well schooled in the administrative hurdles involved in company formation in Puerto Rico and, as such, will be able to help you navigate them in the quickest manner possible.
Legal representation: When you opt to contract a company formation agent, you are contracting a provider with a deep knowledge of local corporate law, which makes them an ideal choice to be your named legal representative.
Guaranteed compliance: A company formation agent’s knowledge of the local market and administrative process means that working with them guarantees that you will remain fully compliant with regulations, avoiding any potential legal inconveniences or financial penalties.
Biz Latin Hub can help with company formation in Puerto Rico
At Biz Latin Hub, our team of experienced company formation agents is equipped to help you enter the Puerto Rico market and take advantage of the country’s business opportunities. With our complete portfolio of back-office solutions, including legal, accounting, and recruitment services, we can be your single point of contact for entering the market and doing business in Puerto Rico, or any of the 17 countries around Latin America and the Caribbean where we have teams in place.
Contact us now for a consultation or free quote.
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