Hiring staff via an employer of record (EOR) in Puerto Rico is a popular option among investors who only need a small number of local executives, or who are looking to hire a team on a short-term basis. Because an EOR in Puerto Rico will hire staff on your behalf, meaning you can have people in place in only the time it takes to find them.
With the EOR provider able to help in the recruitment process and also provide payroll outsourcing services, many investors and corporations choose to hire this way, rather than incorporate a company in Puerto Rico.
Located in the Caribbean, between the Dominican Republic and US Virgin Islands, Puerto Rico is a US territory with a population of approximately 3.19 million, as of 2020. That status means that the island uses the US dollar as local currency, bringing with it many of the same benefits enjoyed when doing business in Latin America’s dollarized economies.
That year, the territory registered a gross domestic product (GDP) of $103.14 billion and a gross national income (GNI) of $21,740 per capita – less than a third of that registered in the mainland United States, meaning that workers can be hired at highly competitive rates.
Puerto Rico has a highly developed manufacturing sector, with garments, computers, pharmaceuticals, and medical equipment all major export commodities that help the sector generate more than 50% of the island’s GDP. The services sector, meanwhile, accounts for almost 49%.
Although agriculture accounts for less than 1% of GDP, efforts have been made in recent years to develop the rural economy, including a drive to promote coffee production since 2019.
However, it is the industrial and services sectors that tend to be the biggest draw for investors, driven by the well-established facilities and strong infrastructure found on the island, as well as the ready supply of unskilled labor for factory work and growing pool of talent for the likes of the tech industry.
If you are interested in entering the Puerto Rican market, read on to find out more about the benefits of using an EOR in Puerto Rico, as well as some of the legal obligations your employer of record will take care of. Or you might prefer to simply contact us now to find out more about how we can assist you.
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What is an employer of record in Puerto Rico?
An employer of record in Puerto Rico is an outsourcing provider that hires local staff on behalf of its clients via its locally incorporated entity.
In practice, that means that while those staff are officially employed by your EOR in Puerto Rico, the client has full control over their schedules, responsibilities, and workloads, and manages them directly.
Where needed, an EOR – which can also be known as a professional employer organization (PEO) – is able to assist the client with recruiting and hiring those staff, handling their onboarding and subsequent offboarding when their period of employment comes to an end.
That is particularly attractive, given that the employer of record will have a firm understanding of the local market, being aware of the best educational institutions and local companies during the processing of resumes, as well as having a well-established recruitment network for finding top talent.
Your EOR in Puerto Rico will also manage the payroll of any staff hired on your behalf, calculating statutory deductions and paying salaries in accordance with local regulations, meaning that you can rest assured your operations will be in complete compliance with local laws.
What are the benefits of hiring staff through an EOR in Puerto Rico?
Among the benefits associated with hiring staff through an employer of record in Puerto Rico are the following:
Reduced commitment: When you hire via an EOR in Puerto Rico, you avoid the need to incorporate a company, meaning that you can withdraw from the market in only the time it takes to offboard your local outsourced staff.
Compliance certainty: Your employer of record in Puerto Rico will provide you with the guarantee that all local regulations and norms will be complied with, meaning that your company will not face legal inconveniences or reputational damage due to non-compliance.
Valuable connections: Your EOR in Puerto Rico will be established in the local business community, and will have connections that may be useful to your business, while also assisting with efforts to recruit the staff you are looking for, should that be part of the services agreement you sign.
Cost efficiency: While working with an employer of record will come with a fee – usually on a per-employee basis – that will often be comparable or less than the costs associated with company formation and managing payroll in-house.
Local knowledge: Your EOR in Puerto Rico will be able to help you bridge the cultural gap in a new and unfamiliar market, as well as offering advice on key decisions related to doing business, such as choosing providers to work with.
Legal requirements an employer of record will take care of
The guaranteed compliance that your EOR in Puerto Rico offers can include, but is not limited to, the following:
- Implementing statutory working hours
- Facilitating holiday allowances and honoring public holidays
- Providing sick leave and other personal entitlements according to the law
- Preparing legal documentation, such as contracts
- Timely payment of salaries and benefits
- Managing any other aspect of the payroll system
- Overseeing the onboarding and offboarding of staff hired on your behalf
Biz Latin Hub can be your EOR in Puerto Rico
At Biz Latin Hub, we provide tailored packages of back-office services to support investors and corporations entering and doing business in Latin America and the Caribbean, with local teams based in 16 markets around the region.
As well as high-quality hiring & EOR services, our portfolio includes accounting & taxation, company formation, due diligence, legal services, and visa processing, among others. So whether you are looking for an EOR in Puerto Rico or wish to make an investment that goes beyond working with an employer of record, we can help you.
Our unrivaled regional reach also means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
Contact us now to find out more about how we can support you.
Or read about our team and expert authors.