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Benefits of Making Business in Puerto Rico | Buy & Sell Business

At MergersCorp we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction.<br><br>Find more at: http://mergerscorp.com

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Benefits of Making Business in Puerto Rico | Buy & Sell Business

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  1. BENEFITS OF MAKING BUSINESS IN PUERTO RICO WWW.MERGERSCORP.COM

  2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

  3. BENEFITS OF MAKING BUSINESS IN PUERTO RICO WWW.MERGERSCORP.COM

  4. Country Overview Puerto Rico is the easternmost and smallest of the Greater Antilles, bordered by the Atlantic Ocean to the north and the Caribbean Basin to the south. Neither a state nor independent, the island has been a US territory since 1898. Everyone born on the island is an American citizen and holds a US passport. However, residents cannot vote in US presidential elections, unless they are registered to vote in one of the 50 states. Puerto Rican culture is a blend of Amerindian Taino, Spanish and African influences with Spanish being the island's first language. Tourism is an important money-earner and the island attracts millions of visitors each year. But crippling public debt, poverty and high unemployment have seen many of the islanders leave for the US mainland. Puerto Rico, a tropical Caribbean travel destination and one of the islands of the Greater Antilles in the eastern Caribbean Sea, located 125 km east of the island Hispaniola, .

  5. Executive Summary Puerto Rican culture is somewhat complex, - others will call it colorful. Culture is a series of visual manifestations and interactions with the environment that make a region and/or a group of people different from the rest of the world. During the early 18-century, the Spaniard in order to populate the country took Taino Indian women as brides. Later on as labor was needed to maintain crops and build roads, African slaves were imported, followed by the importation of Chinese immigrants, then continued with the arrival of Italians, French, German, and even Lebanese people. American expatriates came to the island after 1898. Long after Spain had lost control of Puerto Rico, Spanish immigrants continued to arrive on the island. The most significant new immigrant population arrived in the 1960s, when thousands of Cubans fled from Fidel Castro's Communist state. The latest arrivals to Puerto Rico have come from the economically depressed Dominican Republic. Puerto Rico has been one of the most dynamic and competitive economies in Latin America and the Caribbean region until recent years.

  6. Introduction – Doing business in Puerto Rico The Island enjoys a wide cultural diversity founded in the different backgrounds of people that have converged in the Island throughout its history. Many of our residents, who are United States citizens, are fully bilingual. Puerto Rico has highly educated human capital; more than 30,000 university degrees are granted annually, including 10, 000 in the science, mathematics and technology areas. Therefore, most of its workforce is highly educated and focused on providing a high standard of quality and services. Puerto Rico, the smallest of the Greater Antilles, boasts beautiful coasts and beaches, luscious rainforests, dry forests, bioluminescent bays and mountainous areas that make it an ideal destination for touristic purposes. Old San Juan, located in the north area of the capital, San Juan, has multiple historic venues that offer a look into its rich history. Also, the average temperature of 85 degrees Fahrenheit provides ideal weather all year long. Puerto Rico’s current population is approximately 3.8 million and the median age of Puerto Ricans living in the Island is between 32 and 37.

  7. Conducting business in Puerto Rico Register your business with governmental authorities: Register your Corporation (Inc., Corp.), Limited Liability Partnership (LLP), Limited Liability Company (LLC), or any other corporate vehicle at the Puerto Rico Department of State. Register with the Internal Revenue Service to obtain your Employer Identification Number. This will be your ID for most of the following procedures. Register with Hacienda as a taxpayer. In this SURI site of Hacienda, you should be able to register online for the Sales & Use Tax (“IVU”) and get your Merchant Registry instantly. Register with the Municipalities once you identify the place of where you will do business from and obtain a Use Permit. At this point, and if you have the budget we advise you to hire a permit handler, contact us, we will get you in contact with several of them for quotes. You will also need to register with the Municipality for the Volume of Business tax (or the “patente municipal”), and the Municipal Sales & Use Tax (“IVU Municipal”).

  8. Taxation in Puerto Rico The AMT includes various AMT adjustments in order to calculate the tentative minimum tax. Such minimum tax is subject to a 30% flat rate. For taxable years commenced after 31 December 2018, the minimum tax would be subject to an 18.5% flat rate, or 23% in the case of taxpayers required to submit financial statements. For taxable years commenced after 31 December 2018, a corporation is not allowed to claim the same deductions it claimed for regular income tax purposes. Instead, a corporation is allowed to claim a limited amount of deductions such as wages, rents, utilities, marketing, depreciation, insurance, health plan contributions, charitable donations, bad-debts, and certain taxes. A 10% tax is imposed on certain corporation on the deemed dividend amount attributable to a foreign owner. A foreign owner is defined as any non-resident person who directly owns 50% or more of the corporation's stocks. A surtax of 50% is imposed on corporations that improperly accumulate earnings to prevent the imposition of tax on shareholders or partners rather than paying the earnings out as dividends.

  9. Trade Ireland and Japan are the import partners of Puerto Rico and accounted for nearly 23% and 6% of the island nations exports, respectively, in 2006.The value of country’s exports stood at $46.9 billion f.o.b. according to the 2001. The value of country’s imports stood at $29.1 billion c.i.f. according to the 2001. Puerto Rico’s trade with foreign countries is included in the US trade data, along with the figures for the 50 states, the District of Columbia and the Virgin Islands. However, the figures for export and import between the US and Puerto Rico are mentioned as supplementary information. The country is very much open to foreign trade, which accounted for 112.56% of GDP in 2017 (World Bank). Puerto Rican exports in 2017 were valued at USD 73.16 billion (CIA). The main exports are chemicals (5.0%), vehicles (3.5%), tractor and engine parts (2.9%), and electronic circuits (2.5%). . Puerto Rican imports in 2017 were valued at USD 49.01 billion (CIA). The main imported goods are vehicle engines (7.5%), chemicals (5.8%) and remote transmission devices (4.8%).

  10. Banking in Puerto Rico First Bank was founded in 1948 and is a subsidiary of First Bancorp. The banks headquarter is situated in San Juan. The Bank provides services like commercial, retail, and corporate banking products and services. It has handled around US$1.71 billion of the total assets. First Bank had generated revenue of around US$54.95 million in the year 2018. In the same year, the net income of First Bank was around US$17.59 million. It employs around 186+ employees. Banco Popular was founded in 1893 and the banks headquartered is situated in Hato Rey it is also one from the top banks in Puerto Rico. The Bank offers various services such as commercial and retail banking services. It has handled around the US $38 billion of the total assets. It handles about 635+ ATMs within 171+ branches. Banco Santander was incorporated in the year 1973 and the bank provides commercial and personal banking services in the island. It is the subsidiary of the Santander Bancorp The bank was early known as “Banco De Santander Puerto Rico” and later in 1989 the bank was renamed to “Banco Santander Puerto Rico”.

  11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

  12. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

  13. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13 © Midaxo 2018 www.midaxo.com

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