Puerto Rico takes you from Latin America to the U.S.
Say ‘Puerto Rico’ out loud. Did the image of sandy beaches, a rich green rainforest and rhythmic music come to mind? Well, you’re not wrong, but that is not all the Caribbean island has to offer, particularly for business that wants an in in the U.S. market.
A strong political and economic connection to U.S. is also ingrained in the fiber of the island, which began its relationship with the U.S. in 1898 and officialized it in 1952 with the creation of the Commonwealth. In short, Puerto Rico is a U.S. territory. And what this means for you and your business is a market that is a regulated by Federal laws stepping stone to the U.S.
Let’s say your business has a product that is manufactured in South America. Puerto Rico is part of the foreign trade zone, which according to the U.S. Customs and Border Protection agency, “are secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory upon activation.” In short, it is a free trade zone. There are three ports on the island, with the closest one to South America located in Ponce.
“For me Puerto Rico has a very unique combination. It can be the head of this small market, because there are 3 million people here in Puerto Rico, but the most special thing about this is that is on the shoulder of the biggest lion of all, the US,” Mariano LoCane, Cinemad.Tv
Many Latin American startups see the US as the perfect place to scale, but the logistics of getting there can be complicated. This is where an accelerator like Parallel18 can be a great asset.
“Working with Latin American entrepreneurs for the last five years has given me lots of insights in terms of what the entrepreneurs need finding new markets such as the United States. Most of the time it’s just having the right connections and resources because there are a lot of uncertainties up there, so normally the entrepreneurs hit a wall, spend lots of money, and return to their countries”, explained Sebastian Vidal, Parallel18’s Executive Director.
“In Parallel18 we put you in touch with the right people by bringing the best mentors from the US; giving companies the right resources in terms of the things that they need to know if they are planning to grow from Puerto Rico to mainland US, and connecting them with their fellow Parallel18 entrepreneurs since most of them come from PR and US and they have the grass roots knowledge that any founder will want.”
Protections under the US
The island is also protected through the Federal Deposit Insurance Corporation, or FDIC, that insure bank deposits of up to $250K, so that your money is safe and protected by a Congress backed agency. And if you’ve read about the current economic situation on the U.S. territory, fret not. This issue has propelled entrepreneurship on the island and many foreigners are taking a calculated chance to boost both the island and their enterprises. For the year 2017, the World Bank puts Puerto Rico in number 55 on their Ease of Doing Business list, a bump up from 2016.
Despite the strong ties to the U.S., Puerto Rico’s culture is very much Latino. The Spanish language, food, and music are testament to that. For a company coming from Latin America, having a familiar atmosphere while transitioning to the U.S. market is a relief. The known background eases the learning experience while providing support in a familiar background.
Location, location, location
From a geographical point of view, Puerto Rico is a central location that connects the Americas, south and north. Direct flights to major hubs such as New York, Miami, D.C., Atlanta, among others, are available every day. Most importantly, traveling from Puerto Rico to the U.S. does not require extra documentation or preparation; it is the same as traveling within the U.S.
Due to its location, Puerto Rico has long been a stop for expats from all over the world. This means that your startup will not only get to experience a combination of Puerto Rican and American cultures meshing together, but also from Spain, Dominican Republic, and the Middle East, among others. The diversity that the Caribbean provides
“There is an Argentinian saying that goes: ‘What do you prefer to be, the head of a mouse or the tail of a lion?’ This is like the head of a small market or the tail of a big market? For me Puerto Rico has a very unique combination. It can be the head of this small market, because there is a 3 million people here in Puerto Rico, but the most special thing about this is that this mouse is on the shoulder of the biggest lion of all, the US. So, at the same time you can be the head of a small market but this small market has connections with the biggest market,” said Mariano LoCane, CEO Cinemad.tv and a Gen1 participant.
If you’re looking to expand your business from Latin America to the U.S., having presence in Puerto Rico is a must. The geographical location combined with the political, cultural and economic American connection that the Island has will benefit the growth process of your start-up.
