Puerto Rico's Law 20 creates 16800 direct jobs and boosts economic growth

In a recent government meeting, significant discussions centered around the impact of Law Number 20 of 2012, which has been pivotal in job creation and economic growth in Puerto Rico. The law has generated approximately 16,800 direct jobs, with an average salary of $36,000—substantially higher than the median income of $19,775 in the region. This increase in employment has also led to nearly $26 million in direct revenue for the government through sales and use taxes, known locally as IVU.

The approval of decrees under this law has seen a notable rise since 2015. In that year, 195 decrees were approved, which surged to 630 in 2018. This spike can be attributed to several factors, including the backlog of applications from 2017 due to the devastation caused by hurricanes Irma and María, legislative efforts to streamline the approval process, and promotional initiatives aimed at attracting businesses.

As of mid-2019, 215 decrees were approved, with about 35% of the entities benefiting from Law Number 20 being local businesses. This marks a significant increase from the 20% of local entities in 2015-2016, indicating a growing recognition among local businesses of the opportunities in foreign markets and the benefits of diversifying their income streams.

The total payroll for entities benefiting from this law is approximately $595 million, with 51% linked to eligible activities. The total number of jobs created has reached around 36,222, a substantial increase from the 7,400 jobs reported in 2015 and 2016. This includes 16,692 direct jobs, 17,026 indirect jobs, and 2,504 induced jobs, showcasing the law's significant economic impact on the island.

As Puerto Rico continues to navigate its economic challenges, the ongoing success of Law Number 20 serves as a beacon of hope, illustrating the potential for growth and recovery through strategic legislative measures.