Five Questions a Board Will Ask About a Puerto Rico Project, and How to Answer Them

Somebody inside the company has to carry this. Usually it is a VP of operations or a tax director who has done the work, believes the case, and now has to present it to people whose impression of Puerto Rico was formed by a hurricane news cycle.

These are the five questions that come up, in roughly the order they come up. The answers that work are the ones that concede the real problems rather than talking past them.

1. "Is the power situation going to shut us down?"

This is always first, and deflecting it destroys your credibility for everything that follows.

The honest answer: grid reliability requires planning and capital, and we have budgeted for it. Here is our generation and redundancy design, here is what it costs in capital and in annual operating expense, and here is the continuity plan for our critical processes.

That answer works because it treats the issue as an engineering problem with a price rather than a risk to be waved away. Companies operating successfully on the island did exactly this. The ones that struggled assumed mainland grid behavior.

What does not work: "it has improved a lot" or "our site has not had issues." Boards hear that as hope.

2. "What happens to the incentives if the political situation changes?"

The useful answer has two parts.

First, benefits under Act 60-2019 come through a decree, which is a negotiated grant with a defined term and defined conditions. That is a meaningfully different instrument from a general tax rate that can be adjusted in a budget cycle. Puerto Rico's history also shows that when the framework changed, existing decree holders were grandfathered on the terms of their original grants — which is exactly why Act 73-2008 (Legacy) still governs some operations on the island today.

Second, and more persuasively: our case does not depend entirely on the incentives. Here is the operating economics without them. The incentives improve a decision that already works on labor, facility cost, talent and logistics.

If that second part is not true, the board is right to be skeptical and you have a weaker project than you think.

3. "Can we actually staff it?"

The answer that lands is specific rather than general.

The island's universities produce engineers and scientists at volume, and decades of multinational pharmaceutical, device and industrial presence mean the workforce is already trained inside demanding quality systems. You are not teaching people what a deviation is.

Then add two things boards find reassuring. There is a substantial population of Puerto Rican professionals working on the mainland who will return for the right role, and they arrive with mainland experience and family reasons to stay. And the honest constraint: in narrow specializations the market is competitive, we will pay market rather than a discount, and we have budgeted for developing some capability internally.

The best version of this answer is evidence. If you have already run a real search for one or two roles and can report what happened, that beats any workforce study.

4. "Are we exposed to something we do not understand legally?"

Short answer: no, and this is the strongest structural point in the whole case.

Puerto Rico is the United States. Same federal regulatory agencies. US intellectual property law. US contract law and US courts. US citizens in the workforce. No customs friction moving goods to the mainland. The dollar.

For a board that has previously evaluated genuinely foreign locations, this removes an entire category of diligence. It is worth stating directly, because a surprising number of senior people are not certain of it.

5. "If the tax rate is 4%, why isn't everyone doing this?"

This is the question that separates a prepared champion from an exposed one, and you want to raise it yourself before someone else does.

For a US-parented group, the Puerto Rico decree rate is not a worldwide outcome. The Puerto Rico subsidiary is generally a controlled foreign corporation for US federal purposes, so the US regime still applies — the one commonly called GILTI, renamed net CFC tested income in the 2025 US tax law. Groups above the EUR 750 million consolidated revenue threshold also have to consider Pillar Two global minimum tax rules.

The right framing: the decree rate is layer one of a multi-layer position, and we have had the full analysis run rather than planning from a headline number.

A board that hears this from you trusts the rest of your numbers. A board that hears it from an outside adviser three months later does not.

What to bring

A one-page summary of the incentive position with the basis and the limitations stated on it. The operating case with and without incentives. The power plan as a costed line item. Evidence on hiring rather than assertions. And a clear statement of the structural analysis for your specific ownership structure.

Everything in this article is indicative advisory context. Your actual position depends on your decree, your structure, your scale and your facts, and should be confirmed before you present it as settled.

The posture that works

Boards do not approve projects because the presenter was enthusiastic. They approve projects because the presenter clearly understood the downside and had already priced it.

Lead with the power question. Raise the structural tax question yourself. Be specific about hiring. The case for Puerto Rico is strong enough that it does not need a champion who is overselling it, and it is considerably more persuasive from someone who is not.