With the recent executive order imposing tariffs on imports from Canada, Mexico, and China, U.S. businesses are bracing for increased costs, disrupted supply chains, and heightened uncertainty. But amidst this shifting trade landscape, Puerto Rico emerges as a beacon of opportunity. 

Unlike foreign countries, Puerto Rico is a U.S. territory. That means there are no additional costs, import duties, or regulatory trade barriers when doing business with the mainland. For businesses aiming to protect their bottom line while optimizing supply chains, nearshoring or reshoring to Puerto Rico presents a strategic opportunity to turn trade disruption into a competitive advantage. 

Why Puerto Rico? A Seamless Trade Advantage

The recent wave of tariffs is designed to incentivize domestic production, but for many businesses, manufacturing in the mainland U.S. comes with high labor costs and logistical challenges. These challenges make it imperative for businesses to find a cost-effective and reliable alternative. Puerto Rico stands apart from traditional nearshoring locations like Mexico and Canada, which still face trade compliance risks, customs duties, and regulatory uncertainty. The island provides the best of both worlds—full access to the U.S. market without the costs and risks of offshoring. 

• Seamless Trade & U.S. Compliance: Commerce between Puerto Rico and the mainland U.S. operates under the same federal regulatory frameworks, including FDA, USDA, and U.S. intellectual property laws. 

• More Advantages than Traditional Nearshoring Locations: Unlike Mexico and Canada, Puerto Rico offers U.S. legal protections, full regulatory compliance, and no customs duties, making it a safer and more reliable alternative. 

• Cost-Effective Manufacturing: With competitive labor costs and generous tax incentives, companies on the island benefit from reduced operational expenses while maintaining high-quality standards. 

• A Proven Manufacturing Hub: The island is home to $64B in total exports (2024), 8 of the top 15 best-selling pharmaceutical products in the world, and 12 of the world’s top 20 pharmaceutical companies, including Pfizer, AbbVie, and Johnson & Johnson. Additionally, Puerto Rico hosts 70+ FDA-approved medical device plants from industry leaders such as Medtronic, Thermo Fisher, GE Healthcare, and Stryker. 

• World-Class Infrastructure: From major seaports and international air transshipment hubs to advanced 5G connectivity and smart logistics networks, Puerto Rico ensures seamless operations for manufacturers. 

Reshoring & Nearshoring for Stability and Growth

The vulnerabilities of global supply chains have never been clearer. Ongoing geopolitical tensions, supply chain bottlenecks, labor shortages, and rising transportation costs have made nearshoring a necessity for forward-thinking businesses. Companies like OcyonBio have experienced these disruptions firsthand.  

“If your manufacturing is in China, that costs you a lot of pain and agony,” says Robert Salcedo, CEO of OcyonBio. However, by operating in Aguadilla, Puerto Rico, OcyonBio has successfully mitigated many of the supply chain shortages affecting other businesses. 

Reshoring operations to Puerto Rico offers other advantages. Its strategic location in the Caribbean provides easy access to both U.S. and Latin American markets, reducing transit times and improving logistical efficiency. This proximity helps businesses mitigate international trade risks by bringing production closer to the U.S. market, ensuring greater supply chain stability.  

Additionally, companies benefit from operating within a secure U.S. jurisdiction, avoiding unpredictable foreign trade policies. Puerto Rico also boasts a highly educated and bilingual workforce, with the highest proportion of STEM degrees in the U.S. and one of the world’s top concentrations of engineers and scientists, making it an ideal destination for innovation-driven industries. 

Beyond Tariffs: A Long-Term Competitive Edge

While today’s tariffs are a pressing concern, smart businesses are thinking long-term. Puerto Rico offers not only trade stability but also a pro-business environment with substantial tax incentives: 

• No U.S. federal tax on eligible income, allowing businesses to reinvest more capital into expansion, workforce development, and innovation. 

• Up to 50% tax credit on R&D expenditures, making Puerto Rico an attractive destination for innovation-driven companies. 

• 100% exemption on capital gains & export services, driving higher profitability for businesses relocating operations to the island. 

As businesses navigate the uncertainties of new trade policies, the companies that adapt first will gain a competitive edge. Puerto Rico offers a rare opportunity—a U.S. jurisdiction with cost-efficient commerce, a pro-business environment, and world-class manufacturing capabilities, positioning the island as a competitive global hub for business expansion and investment. If companies are looking for a smart, sustainable, and strategic location to expand operations, Puerto Rico is the answer. 

Secure Stability and Growth

Avoid the burden of tariffs and secure long-term stability. Reshore to Puerto Rico for a resilient, cost-effective, and future-proof manufacturing hub. Learn more at our Reshoring page here.