Puerto Rico Manufacturing Proposition Analysis
Identified most relevant incentives for
in current federal landscape
Starting from a long list of tax incentives, applied 3 filters...
A
Which incentives
impact Puerto
Rico the most?
B
Which incentives
are most relevant
Which incentives
C
are currently
for biopharma /
medtech?
under federal
consideration?
Compared potential attractiveness of
incentives for in-shoring mfg. to PR
Addressed three key questions for both types of incentives...
1
What are relevant
characteristics of
target companies /
product segments?
Company type (e.g., Biopharma Brand Co., CDMO)
Product segment (e.g., small molecule, biologics)
Company tax status (e.g., US-CFC, US branch)
... and prioritized 2 types of incentives for impact analyses¹
2
What is the
likelihood of
in-shoring to PR?
Fit with PR's value proposition
Level of tax benefit from incentive
In-shoring mechanism (e.g., volume shift, new sites)
Economically
distressed zones
Credits for -20-40% of wage
expenses & depreciation /
amortization allowances in
mfg. in specialized zones in US²
GILTI elimination +
standalone incentives
Income generated by PR CFCs
not considered toward GILTI³ plus
credits for -3-10% wage
expenses & depreciation /
amortization allowances
1. Also reviewed and deprioritized standalone incentives without GILTI elimination 2. Assumed
activities of PR branches and PR CFCs of US-domiciled parent companies are eligible for credits
3. Global Intangible Low-Taxed Income 4. Focused only on PR excise and local tax revenues
3
What is potential
impact for PR?
Est. incremental mfg. value in-shored in 2026
Est. incremental job growth in 2026
Est. incremental PR tax revenues³ in 2026
... and assessed potential attractiveness of EDZ & GILTI
elimination proposals for each company/product segment
16
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