Why Puerto Rico Now – Interview

Why Puerto Rico Interview
Why Puerto Rico Now interview with Adam Greenfader of AG&T and Robbie Karver of PR Consultants.  The interview was held in San Juan, Puerto Rico at the recent Investor Mastermind conference.  

 

To receive access to an advance version of Why Puerto Rico Now. Register Here. 

Together they discuss investment opportunities in Puerto Rico. In this interview, Adam and Robbie discuss why the island is ready for great growth. They also explain why the island’s economy may provide insulation from some of the global economic issues causing the recession.  Below are some excerpts from the book. Coming soon and launching in September 2022. 

In every crisis, there is an opportunity. 

Today, we find ourselves recovering from a worldwide pandemic. Supply line challenges caused by COVID 19 has made the production, distribution, and storage of critical supplies a top national priority. Puerto Rico, with over 70 years of critical manufacturing experience, is in an ideal position to lead the fight against COVID 19 for the United States. In the midst of all these challenges, there are silver linings. 

Today, Puerto Rico is about to receive the largest allocation of Federal relief funds in U.S. History.

 In what is being called Operation Bootstrap 2.0., Puerto Rico will receive over 80 billion dollars. This includes money to  construct homes, critical infrastructure, renewable energy, and other vital projects.

In addition to relief funds, Puerto Rico and the Internal Revenue Service have created a series of tax incentives. Their goal is to bring in new businesses and people to the island. Act 20/22 (now Act 60) had the unintended consequence of attracting a new breed of entrepreneurs – blockchain and crypto investors. Suddenly, Puerto Rico finds itself leading a technological revolution with thousands of people bringing new ideas, connections, and capital to the island.

To receive access to an advance version of Why Puerto Rico Now. Register Here. 

Discover Puerto Rico Tourism Development

Discover Puerto Rico

Discover Puerto Rico Tourism video (2:45 s)  highlights Puerto Rico’s unique selling proposition for tourism in 2022 and beyond. Interviews with Adam Greenfader of AG&T and Federico Stubbe of PRISA Group discuss the island’s rich culture, robust infrastructure, great airlift, and other benefits such as Federal tax incentives. Watch the video to learn how you can be part of Puerto Rico’s booming hospitality and tourism industry.

Puerto Rico means business. The island’s supportive ecosystem empowers entrepreneurs’ forward-looking vision with a spectrum of assets, including smart tax incentives, a highly skilled bilingual workforce, U.S. legal & financial frameworks, and an advanced network infrastructure.

 

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  1. Discover Puerto Rico is the official destination marketing organization (DMO) for our Island, which was created by legislation in 2017. Learn more about the organization’s purpose and history, as well as the expert staff who help make the DMO successful.
  2. PRISA GROUP is a family-owned, Puerto Rico-based developer.  PRISA is a builder of green residential communities and luxury hospitality projects. The Company has more than 500 employees and 6,000 units in planning and construction.  The value of works is over $3 billion with over 30 years in the business.
  3. AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our  track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands.

Puerto Rico Investing Mastermind

Adam Greenfader Investing Mastermind

Join us for the Puerto Rico Investing Mastermind with Adam Greenfader of AG&T  from July 25th – July 28 in Condado, San Juan to explore the rich investing opportunities in this tropical US Territory, Puerto Rico.

Click here for tickets and more information.

An island that is offering amazing tax incentives to investors willing to catch the vision of this tropical island.

What you will learn:

  • The island empowers entrepreneurs with a spectrum of assets, including smart tax incentives, a highly skilled bilingual workforce, and U.S. legal & financial frameworks.
  • 98% of Puerto Rico is opportunity zones, including many of its beach properties
  • Find out who is migrating to the island and why!

Real estate investing is one of the greatest vehicles to build wealth, but it doesn’t make sense in every market. Some locations provide incredible returns, while others make it almost impossible to make a profit. Click here for more information.

#puertorico #opportunityzone #realestateinvestments #act60 #investing#event Kathryn Morea Brian Bourgerie Ashley Tison Brett Siglin Joel BerrocalMichael Gay, CEcD Samira Yassin, CPA, Esq. Veronica Montalvo

AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our  track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands.

 

 

Puerto Rico Mortgage Bankers Association Positive about 2022

Puerto Rico Mortgage Bankers Association

The Mortgage Bankers Association of Puerto Rico positive about 2022. See video clip about the 12 month projections for the island’s economy by Adam Greenfader, managing partner at AG&T.

 

La Mortgage Bankers Association of Puerto Rico (MBA) es una entidad sin fines de lucro, establecida para mantener y preservar la industria de la banca hipotecaria alentando a sus miembros a promover y llevar a cabo una práctica responsable en la otorgación de préstamos hipotecarios y en ejercer el buen juicio de la aplicación de las regulaciones locales y federales de manera que se mantenga el buen nombre y el prestigio de las instituciones hipotecarias y la credibilidad ante los consumidores.

 

 

AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our  track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands. 

 

For more information about Puerto Rico contact us.

 

The Puerto Rico Symposium in Miami With Historic Announcement

 

See All Photos Here

See Agenda and Sponsors

 

The Governor of Puerto Rico Pedro Pierluisi made the historic announcement at The Puerto Rico Symposium in Miami that Puerto Rico was officially out of bankruptcy. The message was well received by over 250 industry leaders from both the public and private sectors.  The event was organized by The Urban Land Institute South East Florida / Caribbean and The Puerto Rico Builders Association.

 

Governor Pedro Pierluisi
Governor Pedro Pierluisi makes historic announcement

 

The Symposium was kicked-off by Scott McLaren, President ULI SE Florida / Caribbean. Scott spoke about the longstanding relationship and collaboration between ULI and the Puerto Rico Builders Association. He highlighted the work on the ULI National Advisory Services Panel on social, economic, and physical resilience in Toa Baja, Puerto Rico. https://seflorida.uli.org/toa-baja-puerto-rico-panel/

Scott Maclaren finished his remarks by recognizing  Vanessa de Mari, the new President of the Puerto Rico Builders Association and the first women president in the organization’s 70 year history. The Symposium was dedicated to this historic accomplishment. In attendance were some of Puerto Rico’s top government leaders.  This included the Honorable Pedro Pierluisi, Governor of Puerto Rico, Manuel Laboy, COR3 Executive Director,  Maretzie Diaz, Deputy Director PR Housing Department CDBG-DR, Natalia I. Zequeira, Commissioner of Financial Institutions, and in attendance, the Secretary of Housing of Puerto Rico, William Rodríguez Rodríguez. The keynote address by the Honorable Pedro Pierluisi, Governor of Puerto Rico’s highlighted the island’s economic accomplishments, the end of Puerto Rico’s population exodus, and the conclusion of the bankruptcy which was officially announced the day of the Symposium.

https://www.bnnbloomberg.ca/puerto-rico-is-out-of-bankruptcy-after-a-22-billion-debt-exchange-1.1738142

In the private sector, Ricardo Alvarez-Diaz, CEO, Alvarez-Diaz & Villalon discussed some of progress of the island’s rebuilding after the 2017 hurricanes Irma and Maria. The reconstruction of the island was  a constant theme throughout the day with specific examples of over 900 started projects.

The first panel, “Why Puerto Rico: Stories of Success,  was a testament to the resiliency of the development community. Moderated by Andrew Carlson, SVP Country Manager, of JLL the discussion highlighted the historic growth of the island’s hospitality sector with the construction and/or renovation of over 3,000 new room keys from El Conquistador, Grand Reserve (formerly known as Coco Beach), Sheraton, AC , and many others. The panel included Federico Sanchez, President & CEO, Interlink Group.

 

Speakers Panel
Dan Kodsi, Brad Dean, Rafael Rojo, Andrew Carson

 

Dan Kodsi, CEO, Royal Palm Companies, Rafael E. Rojo, President & CEO, VRM Companies. Also in attendance was Brad Dean, CEO, Discover Puerto Rico who highlighted the island’s impressive tourism growth (ADR and occupancy rates) during the Covid 19 pandemic and new expansion of tourism throughout all U.S. feeder markets.

As Puerto Rico seeks to build back its tourism and other industries, the financial sector will invariably play a major role. One of the goals of the Puerto Rico Symposium was to facilitate the conversation of growth in both traditional banking as well as new Fintech, IFEs, and other debt/equity players.  Natalia I. Zequeira, Commissioner of Financial Institutions, explained the ease of regulations and process for new financial institutions as Puerto Rico shares many of the same regulations of the U.S. states on the mainland. Ms. Zequeira also mentioned that International Financial Entities (IFE) can now participate in special opportunity projects.

https://www.investpr.org/key-sectors/finance-and-insurance/

Michael McDonnell, Executive Vice President, First Bank, that recently re-opened its  construction division, was bullish on the island’s economic prospects and announced that the Puerto Rico will achieve positive economic growth (GDP) this year– something it has not done in over a decade.  Banesco USA announced the U.S. Department of the Treasury, will invest more than $8.7 billion through ECIP in institutions across the country – Banesco USA is the only bank recipient located in Florida or Puerto Rico.

https://www.prnewswire.com/news-releases/banesco-usa-approved-to-receive-237-5-million-investment-from-the-us-treasurys-emergency-capital-investment-program-301445832.html

Over the last few years, we have all hear about the 80 billion dollars of relief aid that has been allocated to Puerto Rico and is coming. In the “Myth versus Reality panel: Federal Funding Opportunities on The Island,” moderator Ella Woger Nieves of Invest Puerto Rico helped lift-up the proverbial transparency veil. Manuel Laboy, the COR3 Executive Director spoke with detailed facts of the funding by agency with FEMA authorizing 5 billion for temporary work, 21 Billion for 9,000 permanent projects and 800 that are currently under construction today. He also discussed the next wave of over 900 projects that are currently under engineering and design.  Much of this work will be channeled through CDBG-DR and the PR Housing Department. Maretzie Diaz, the Deputy Director PR Housing Department, explained the process for companies wanting to participate in the island’s rebuilding of housing and infrastructure. Mahdu Beriwal, Owner/founder of EIM provided first-hand knowledge of the rebuilding work in Puerto Rico.

 

Adam Greenfader, Ricardo Alvarez-Diaz, Pamela Pautenade, Vanessa de Mari, Alfredo Martinez, Emilion Colon

 

Keynote Speaker Pamela Pautenade, Ex. Deputy Secretary of HUD, was also on hand to share her experiences about the collaboration with the Puerto Rico Builders Association during the 2017 hurricanes crisis. In a moving conversation with Ricardo Alvarez-Diaz, Mrs. Pautenade explained the dedication of the island’s public and private sectors and dispelled any rumors about misuse of relief funds.

 

Keynote Lunch Address
Andrew Farkas, Adam Greenfader

 

Puerto Rico, like much of the Caribbean is in the process of bouncing back from the Covid 19 pandemic.  Adam Greenfader, who chairs the ULI Caribbean Council had a high level sit down conversation with keynote Speaker Andrew Farkas, CEO Island Capital Group. The conversation was focused on social equity and specifically what  role the financial sector has in supporting the region with a particular focus on sustainability, ESG, and helping economic migrants return back to their island homes.

In the last few years Puerto Rico has become known as blockchain capital of the world. While thousands of tech savvy individuals have moved to the island to take advantage of federal tax incentives they have inadvertently created a new economic driver for the Puerto Rico.

https://www.bloomberg.com/news/features/2021-12-11/crypto-rich-are-moving-to-puerto-rico-world-s-new-luxury-tax-haven

 

In our “Fintech & Financial Innovation panel in Puerto Rico, Moderator Nathan Whigham, Founder & President, EN Capital discussed the growth of this huge industry. Rodrick Miller, CEO, Invest Puerto Rico, explained what his group is doing to change the paradigm in Puerto Rico from selling tax incentives to focusing on the island’s quality of labor, education system, and proficiency in bio science and other innovations. Stephen Inglis, CEO, Importal explained his new portal to monetize tax credits and  Yael Tamar, CEO & Co-founder, SolidBlock explained how her company is integrating real estate and blockchain.

https://www.prnewswire.com/news-releases/invest-puerto-rico-elevates-the-islands-role-as-a-global-bioscience-rd-and-manufacturing-hub-attracting-two-major-life-critical-investments-228m-in-new-activity-301221471.html

After a marathon day of conversation it was amazing to see the room still full for our last panel “Growth Industries and Tax Incentives” moderated by Carla Campos and an all-star team including  Jorge Ruiz Montilla, McConnel Valdez,  Francisco Luis, of Kevane Grant Thornton and Rogelio “Roy” Carrasquillo, of the Carrasquillo Law Group. In this panel, specific programs like the Tourism Tax Incentive were explained in detail and there was robust conversation regarding how these incentives have created new jobs in manufacturing, life sciences, construction, and agro-science.

 

On behalf of all of us at the Puerto Rico Builders Association and The Urban Land Institute SE Florida/ Caribbean, thank you to all of the people and sponsors that made The Puerto Rico Symposium possible. We are all hopeful that together both the public and private sector can create long lasting sustainable economic growth.

 

 

For more information about investing in Puerto Rico visit our web site or contact us.

AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our  track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands.

 

18 Billion For The Next Great Construction Boom

San Juan, Puerto Rico. Last week The Puerto Rico Builders Association held its 70th year conference in San Juan Puerto Rico. The historic event was inaugurated with a conversation on Financing the Next Great Economic Construction Boom.  The panel included Michael McDonald, Executive Vice President and Group Director at Firstbank, Luis Alemañy President and CEO at the Economic Development Bank of Puerto Rico, and Eric Delgado Business Banking Relationship Manager at Acrecent Financial Corporation and Adam Greenfader, Managing Partner at AG&T. It was clear from the conference panelists, that after more than fifteen years of stagnate growth, Puerto Rico appears ready to build back better. Billions of dollars of FEMA and CDBG-DR funds are being allocated in what will be the largest government funding program in US history.  While much of the Federal funds will be used to subsidize projects, the group was in agreement that there is a huge need for private investment and capital to bridge the financing gapMichael McDonald, Executive Vice President and Group Director at Firstbank, made the historic announcement that the bank is opening up its construction division. Several members from the newly formed team were present in the packed room including Carlos Navarro and Mei Li Tsai Rivera. “There is no better indicator of an economy that is ready to grow that when a bank reopens its construction division”, quoted Alfredo Martínez-Álvarez, Jr., Chairman of the Puerto Rico Builders Association. Equally promising, Luis Alemañy President and CEO at the Economic Development Bank of Puerto Rico, was asked about the much awaited CDBG-DR funding. Mr. Alemañy explained that the Economic Development Bank of Puerto Rico has already started allocating over $225 Million dollars to small entrepreneurs. The group was especially receptive to the fact that the grants are being disbursed in $50,000 tranches and does not require repayment. Since 2008, Puerto Rico has gone from twelve financial institutions to less than four. Eric Delgado Business Banking Relationship Manager at Acrecent Financial Corporation, sees a new role for niche lenders filling that gap in Puerto Rico.  He specifically discussed how Acrecent can play a role in funding new construction projects. “We are able to get to funding much faster than traditional banks and also have the capacity for higher loan to coast ratios.  Both Firstbank and Acrecent mentioned that capital is seeking anywhere from 25%-35% of project equity. “As Puerto Rico gets ready to build thousands of much needed homes, critical infrastructure and other key projects, it will be up to both private and public institutions to step up and provide the much needed capital and leadership”, quoted Adam Greenfader of AG&T.  All of the panelist were in agreement that the island in the next few years is ready for strong growth. They specifically mentioned that in addition to the more than 8 billion dollars of Federal Grants, Puerto Rico has one of the most robust tax incentives and credit programs in the world. The hospitality incentive with a 40% tax credit was specifically highlighted as a very strong component of any capital stack today. Helping to plan a better future for the island, The Puerto Rico Builders Association will be holding its annual conference on September 20 and 21, 2022.  Speaking and sponsorship opportunities are available and you may contact AG&T at contact@agandt.com.   AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our  track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands.  

Adam Greenfader Shares New Opportunities in Puerto Rico

Adam Greenfader

Adam Greenfader, Managing partner of AG&T (7 minute video) speaks on new opportunities in Puerto Rico. Learning this video about the the island’s history and how you can learn from the past to generate real value and  long term economic growth. The video includes new information about tax incentives, the tourism tax incentive, Act 20/22, and other tax credits for real estate development. Contact us for more information and to learn about Why Puerto Rico Now

AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands.

 

Could this be the year for Puerto Rico?

Adam Greenfader
Adam Greenfader, Managing Partner, AG&T

It had been almost 12 months since my last visit to Puerto Rico. Thanks to the COVID lockdown expectations were low. The last time I visited, more than 2 years after hurricanes Irma and Maria, the devastation was still overwhelming.  Streets were lined with garbage, electrical lines in disrepair, and thousands of homes had roofs covered in blue tarps. This combined with more than ten years of economic recession made has made Puerto Rico extremely pessimistic. As I landed in Luis Munoz Marin Airport, I was thinking,  “Would the ensuing earthquakes and COVID pandemic ravage the economy even more…”

I travelled the entire island from coast to coast –  100 x 35 miles, in a two week period. I drove from San Juan to Aguadilla, Mayaguez, Ponce, Humacao, Fajardo, and Ocean Park.  The roads were in good condition, the street lights working, and many buildings newly painted.  Notwithstanding the COVID crisis, the economy was bustling.  Most palpable was the positive attitude and feeling of the people. I spoke with many colleagues and friends and was told that much of the hurricane insurance had circulated through the economy.  The 8-12 billion in Federal relief from CDBG-DR is expected by early 2021.  Homemade signs seeking construction workers can be seen throughout the island that read, “Se Solicita Carpinteros y Albanilles”.

 

While the tourists were clearly absent ‘en mass’, a handful of new boutique hotels, especially in San Juan, have been recently delivered between 2019-2020. Much of this new hotel activity is due in part to the Tourism Tax Incentive. The tax incentive provides up to 40% of the total project’s cost back to sponsors…incredibly, some of it can be used for funding as part of the initial capital stack.  While this is not common anywhere in the world, Puerto Rico’s is not a typical Caribbean destination. The total economic activity (GDP) in Puerto Rico is less than 7% for all tourism related activities.  This includes, hotels, trades, conventions, excursions, etc..   This is an astonishing low number for an island that is surrounded by warm water, beautiful beaches, and lush landscapes. Read more about why Puerto Rico is like this at: https://www.agandt.com/wordpress/contact-why-puerto-rico-now/

These tax incentives combined with a team of dedicated individuals in the Destination Marketing Organization (DMO) –  Discover Puerto Rico and other Public Private Partnerships (Invest Puerto Rico) is helping to make Puerto Rico a thriving tourism destination. The island currently boats some of the top hotels in the Caribbean with ADR’s over $1,500 per night.  Much of this demand is generated by the Act 20/22 (now Act 60).  For the last five years, hundreds of high net worth US individuals have moved to Puerto Rico to take advantage of zero Federal capital gains.  Act 60 has resulted in over 500 families and hundreds of new business moving to Puerto Rico.  There seems to be no end in sight for these new Americans living in Puerto Rico.  

Dorado Beach

This week Puerto Rico also inaugurated for the first time in over 20 years, the same political party. The PNP or US Statehood party won the election with a mandate for political stability, reduced corruption, and closer ties with the United States. While the island’s economic crisis is far from over, the COVID pandemic has put Puerto Rico back in the spotlight for its manufacturing proficiency. The island of Puerto Rico is one of the world’s leading pharmaceutical destinations – producing more than the top 5 US States combined. As thousands of jobs come back to the USA-Puerto Rico, invariably many will end up where the cost of labor is 15% less expensive, and there is a 60 year culture of robust manufacturing.

 
Grand Reserve
Grand Reserve

So is this the year for Puerto Rico?  Strong yes if you are involved with affordable housing, luxury resorts, alternative energy and critical manufacturing.

While we at AG&T do not have the proverbial ‘crystal ball’ on the island’s long term economic growth, things feel like they are on the right track and we will have more clarity with the resolution to the island’s bond crisis, the electrical authority privatization (AEE), and the completion of the responsibilities of The Fiscal Oversight and Managemnt Board for Puerto Rico. 

CDBG-DR and Critical Manufacturing

PUERTO RICO  DISASTER RECOVERY ACTION PLAN

The Action Plan

The first Action Plan outlined the uses for the approximately $1.5 billion in CDBG-DR made available by Congress on February 1, 2018. Subsequent amendments encompassed in this iteration of the Action Plan have further allocated an additional $8.2 billion anticipated in a second allocation for the Island, and now include the additional $277 million in unmet infrastructure need. While the recovery funds are clearly being allocated to repair billions of dollars in damages created by the recent hurricanes, repair without true economic recovery will ultimately continue a long standing dependence on federal payments.  While the plan addresses many of the needs of Puerto Rico, it fails to address how Puerto Rico can help make America safe again in light of the recent and devasting Covid-19 pandemic. The Covid-19 pandemic has revealed an urgent need to secure medical and pharmaceutical supplies manufactured in the United States and avoid their shortage and dependence on foreign jurisdictions.  For decades, Puerto Rico provided the United States (and the world) with a reliable and cost efficient source of critical manufacturing. It is time to bring critical manufacturing back home.

US Manufacturing

Puerto Rico has been a historical hub for US manufacturing of pharmaceutical goods for more than 50 years. Total exports for Puerto Rico amounted to $20.5 billion in 2019. That was a 13.3‐percent increase from 2018 when exports totaled $18.1 billion. Puerto Rico is home to major US and European companies such as Bayer, Bristol-Myers Squibb, Baxter, Pfizer, and Johnson & Johnson to name a few. Puerto Rico leads all states in the field of pharmaceutical manufacturing  and trade dollar value in 2019 was higher than both California and Indiana combined. Puerto Rico led U.S. exports of pharmaceutical and medicine manufacturing in 2019, accounting for 24.6% of total U.S. exports.

In Puerto Rico, there are 49 pharmaceutical plants,  70 for medical devices. Seven out of the 10 top-selling medications are currently being manufactured in Puerto Rico.  Both sectors make up 33% of gross domestic product, which create 142,500 direct and indirect jobs, with an average salary of $42,000. Thousands of small and medium-sized companies supply goods and services to this industry.

COVID 19

A rapid ramp-up of hundreds of millions of units will likely be needed in the short term, which will require three key elements — readily available facilities, a quickly scalable skilled workforce, and rapid access to key materials.  Puerto Rico is uniquely positioned in all three elements. First, the ten year decline in manufacturing volume on the Island has left idle or seriously underutilized large-scale, state of- the-art facilities. There are several large-scale API (active product ingredient sites/chemical) sites mostly idle and available to accommodate high volume production. Similarly, on the finished product side, there are also a handful of largely underutilized drug product sites (available to produce capsules, tablets, etc.), as well as the excess capacity of many other manufacturing sites that typically operate with a 25-40% capacity cushion.

Puerto Rico can make quick gains in substituting a considerable amount of the production lines currently hosted internationally.  Although close to 30,000 people are currently employed by the industry, this number is less than 50% of the peak employment experienced just over a decade ago.

The Reduction of  Manufacturing

The United States – Puerto Rico’s dominance in critical manufacturing was significantly reduced by a confluence of globalization and other political-economic events in the 1990’s.  This also included one self-induced action, the elimination of US Federal Section 936 tax incentives.  The elimination of Section 936, was sadly intended to bring manufacturing back to the mainland,  but actually sent our critical industries to China, Mexico, Ireland.  The expiration of 936 prompted the number of manufacturing jobs to fall in Puerto Rico by almost half and is usually cited as one of the principal triggers of Puerto Rico’s long economy descent.

In  2017, Puerto Rico effectively filed the largest-ever federal bankruptcy proceeding by a local government with $74 billion in public debt.  To make matters worse, the passage of the recent Tax Cuts and Jobs Act made has made it more expensive for U.S. corporations to operate in Puerto Rico.  The GILTI & BEAT provisions in particularly has led to a further deterioration of the island’s  pharmaceutical and medical industry, whose business model is heavily-dependent on intellectual property.

Current legislation

The US dependence on foreign manufacturing has recently caused direct action by Congress to secure the lines of medical and pharmaceutical supplies manufactured in the United States and avoid their shortage and dependence on foreign jurisdictions. Two such bipartisan resolutions are HR 6443 by Jennifer Gonzalez of Puerto Rico and HR 6448 by Stacey Plasket of the US Virgin Islands.

Economic Recovery Through Critical Manufacturing

As legislation is passed to make America safer, CDBG-DR can play a vital role in expediting this very important task. One of the goals of the CDBG-DR Economic Recovery program is to create an economic environment where residents will want to come back to the Island. By improving economic conditions and increasing the number of available jobs, Puerto Rico can minimize the displacement of Puerto Rican residents who have out-migrated and are at risk of permanent resettlement off the Island.

Conclusion

The time to secure America’s critical manufacturing is now. Puerto Rico has been a leader in this sector for the last 50+ years and is ideally suited to lead the way. While CDBR-DR is primarily aimed at making the island whole again, especially in housing and electrical infrastructure, the Covid19 pandemic has provided an opportunity to create both safety for Americans and a solid economy for the island of Puerto Rico.

Tax Incentives for Strategic Recovery

See video on strategic tax incentives and recent fiscal policy for the territories and Puerto Rico.

Francisco Luis, Partner at Kevane Grant Thornton and Adam Greenfader, Caribbean Chair / AG&T discuss “ Bringing back manufacturing to USA – Puerto Rico. “ 

In this in-depth conversation about Tax Policy and Incentives,  Mr. Luis discusses the GILTI and BEAT provisions of the 2017 Tax Code and some of the implications of the House Resolution 6448; otherwise known as ” The Territorial Economic Recovery Act.

Other topics include,  ‘Opportunity Zone incentives’ and the ‘Tourism Tax Credit’ as part of the recently passed Act 60.

Francisco Luis has over twenty-nine years’ experience in public accounting, including the “Big Four” and private consulting practice. 

He engages in the design and development of tax planning and consulting strategies. This includes tax services in the area of mergers and acquisitions, business reorganizations, partnership transactions, tax incentives and exemptions, individual and corporate tax issues, personal financial matters, and others. Moreover, since the designation of Puerto Rico as an Opportunity Zone, Francisco has been actively participating as guest speaker on several conferences and activities lecturing about this new incentives regime.

His experience includes participation in multiple international and global business transformation engagements, including post-acquisition implementation and executing strategies focused on reducing global effective tax rates, mostly interplaying with the Puerto Rico tax incentives. Francisco has significant experience assisting clients before the Internal Revenue Service and the Puerto Rico Treasury Department, among others. He also possesses extensive tax compliance experience.

Membership

  • Puerto Rico State Society of Certified Public Accountants
  • American Institute of Certified Public Accountants