For US biotech companies that want the advantages of going offshore with the security of still being at home, Marie Robert has a ready answer: Puerto Rico.

Ms Robert, executive director of Puerto Rico Industrial Development Company (PRIDCO), points out that companies in Puerto Rico operate under US constitutional safeguards, customs protection, the federal banking system, intellectual property protection, and US currency – but are not subject to the federal taxation system.

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These benefits would attract investors from any industry but the life sciences sector, in particular, is a top target for PRIDCO. As a result, Puerto Rico has seen significant growth and investment in the biotech industry over the past three years. Investment in manufacturing facilities during this period has surpassed $2bn and over 1300 jobs have been created.

Further incentives

Biotech, and other, companies looking to establish operations in Puerto Rico can benefit from a corporate tax rate of between 0% and 7%, depending on the amount of investment and on the number of jobs created. However, Ms Robert says: “We know that tax incentives alone will simply not cut it anymore.”

With this in mind, Puerto Rico is making substantial investments in projects such as a Biotechnology Pilot Plant, a Biomolecular Sciences Complex and the recently-announced Biotechnology Park at the former naval base in Ceiba.

A certificate in aerospace engineering is now offered to engineering students at University of Puerto Rico-Mayaguez and plans are in the works for offering both undergraduate and postgraduate degrees in biotechnology. “These efforts, along with our plans to re-engineer our incentives, will certainly allow us to compete favourably with other jurisdictions in attracting foreign investment,” Ms Robert says.

Wider success

Aside from biotech, Puerto Rico has had several FDI success stories in recent years in other sectors. Infotech, an Indian subsidiary of aerospace giant Pratt & Whitney, recently began operations at a plant in Isabela and will ultimately hire as many as 400 engineers to work on design.

But such developments are all part of an even greater story of sustained growth over the past decade, with GDP growing over 64% since 1996 to current levels of $74.4bn, the manufacturing sector growing by 69.2% since 1996, and outbound shipments increasing by 141% to $55.2bn in the same period.

Despite such upswings, Ms Robert is aware that the island must continue to work hard to keep investment dollars rolling in – and that means casting a wider net in terms of source countries. “In the past, Puerto Rico has focused mainly on attracting investment from US companies,” she says. “We now know, however, that to compete in the global economy we must think globally and attract companies from all over the world.”

The possibility of establishing a controlled foreign corporation structure makes Puerto Rico especially attractive to European companies, which can repatriate earnings while paying a net tax rate of no more than 7%.

But Ms Robert is not satisfied with targeting companies from the US and Europe alone. “Any jurisdiction that ignores the great potential of investment from Asia is not likely to survive as an FDI destination,” she says. “We are very proud of having attracted Infotech to Puerto Rico.

“Last but not least, our cultural and geographical proximity to Latin America and our strategic geographic location make Puerto Rico an ideal investment hub for the Americas,” she adds.

Long-term goals

Ms Robert says if she had to mention just one key objective in her role at PRIDCO it would be to truly transform Puerto Rico’s economy by bringing better, higher-skill jobs to the island, in order to put it on the path towards achieving a knowledge-based economy.

“More than 50 years ago, a generation of proud Puerto Ricans embarked on the difficult task of transforming Puerto Rico, moving from an agrarian-based economy to an industrial one,” she says.

“The time has come for a new generation of Puerto Ricans to follow the lead of those who came before us and to take the next step in transforming our economy into a knowledge-based economy that will allow us to remain competitive for many years to come.”