Puerto Rico market attracts IT companies

Those looking for a spot to plant a new flag should consider sunny Puerto Rico. At least so says Washington Technology, which reports this week that the island territory’s IT sector “is expected to grow at an average annual rate of 2.8 percent through 2009, when employment in the sector will top 40,000 workers.” The growth comes as Puerto Rico continues to shake off its image as having an economy driven mainly by tourism and rum production. In fact, 45 percent of the island’s GDP comes from manufacturing, and those that manufacture — as our readers well know — in the modern world require large IT capabilities. Best of all, the island offers a number of competitive advantages to American companies compared to other Carribean nations: its citizens are American, bilingual, and well-educated. “In the post 9/11 era, and the homeland security and defense atmosphere that we’re living in right now, the talent itself is not [sufficient]. It’s actual U.S.-based talent” that is of paramount importance, said Boris Jaskille of Pridco.

For an example of such success, one need look no further than the federal goverment. In 2005, the Defense Logistics Agency’s Procurement Technical Assistance Program awarded $97 million in federal contracts for projects in Puerto Rico, and federal agencies all told have granted Puerto Rican IT companies more than $362 million in contracts in the same time period. Private firms working on the island benefit as well. “We have our own internal revenue code,” said Jaskille. “It has very particular advantages” — including no federal income tax and no US corporate taxes. Moreover, “Not only do we have the same regulatory framework, if you will, that you would find in the states in terms of the monetary system and the financial, legal and banking and insurance systems,” said Jaskille, “but we also have intellectual-property protection by means of U.S. patent laws.”