If you are interested in doing business in Puerto Rico
but are only planning a short-term or limited-scale operation, or would simply like to get to know the market better first, you may find that hiring staff via a professional employer organization (PEO) is your best option. Because when you take on employees through a PEO in Puerto Rico, you control their schedules and workloads, while handing the administrative burden over to the PEO firm. For non-US investors, that is particularly appealing because it means you can get to work in the local market without having to go through company formation in Puerto Rico. A PEO in Puerto Rico may also be known as an employer of record (EOR).
Recruit and attract the best talent for your company.
If you are looking for entrepreneurship in Latin America, Biz Latin Hub is your ally to hire the human talent you need. Situated in the Caribbean, between the Dominican Republic and US Virgin Islands, the US territory of Puerto Rico had a population of 3.82 million in 2021. That year, the island registered a gross domestic product (GDP) of $104.99 billion and a gross national income (GNI) of $21,970 — a prosperity marker higher than any mainland Latin American nation. This contributes to the high influx of foreign investment and market entry, creating high-demand for a PEO in Puerto Rico. Puerto Rico has a highly industrialized economy, with industry contributing more than 50% of GDP in 2018, while the services sector accounted for slightly less. The agriculture sector generated less than 1% of GDP that year.
What is a PEO?
A PEO in Puerto Rico (Professional Employer Organization) is a third-party organization that provides comprehensive HR (Human Resources) services to businesses. PEOs act as co-employers, sharing employer responsibilities with the client company. They handle various HR functions, including payroll, benefits administration, employee onboarding and offboarding, compliance with employment laws, risk management, and other administrative tasks. When a company partners with a PEO in Puerto Rico, they enter into a co-employment relationship. This means that the PEO takes on certain employment responsibilities, such as payroll processing and tax filing, while the client company retains control over day-to-day operations and retains ownership of the business.
Benefits of using a PEO in Puerto Rico
Hiring through a PEO in Puerto Rico offers various benefits:
- Cost savings: The fees you pay the PEO firm are typically much lower than the expenses involved in forming a company, hiring staff, and managing payroll and compliance obligations.
- Time efficiency: With a PEO in Puerto Rico, you can quickly find suitable candidates and hire them without the need to establish a legal entity. It takes only a few days after signing the services agreement.
- Market expertise: Hiring through a PEO in Puerto Rico provides access to local knowledge and a better understanding of the market, regulatory requirements, and business culture. This allows you to make informed decisions before making a deeper commitment.
