Millennials returning to Puerto Rico, launching startups | Hacker News Reader

Millennials returning to Puerto Rico, launching startups

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150 pointsalbertogui74 comments

I was born and raised in Puerto Rico, but left to work in tech. As with any place, there's some good points and there's some bad points. Below are some points that someone moving to Puerto Rico might want to know.

In my opinion, their greatest achievement has been in its educational system. Despite its huge list of problems, UPR enables people of any background to receive an affordable high quality college education. In the US, you're basically forced to take out huge loans that might take decades to pay off. This should mean you'll get access to lots of highly educated individuals, although I don't know if that's the case in practice.

One of my biggest complaints is its poor representation in the US government. If you're living in Puerto Rico you can't vote in any of the US's elections, even though the actions of the president and congress could potentially affect you. e.g. You could get drafted and sent off to war.

Puerto Rico has its own constitution [0], which arguably grants stronger rights to its citizens than the US constitution. For example, wire-tapping is explicitly illegal. It also includes entries allowing employees to organize into associations and collectively negotiate with their employers, as well as go on strike.

An interesting point is that everyone is required to get a voter ID in order to participate in an election. This isn't seen as a problem, and getting one is incredibly easy. I found it incredibly surprising this wasn't the case in the US.

Food is amazing, but there's very little variety. Since there's so few people from different cultural backgrounds, you mostly get the same templates repeated everywhere. In the last decade it has been slowly improving. If you're a vegan or vegetarian, or if you require a gluten-free diet (i.e. coeliac disease), you'll have a hard time eating out.

Due to cabotage laws, you can't import directly to Puerto Rico. Everything has to go through a US port, which translates to increased costs.

Shipping stuff to Puerto Rico is usually more expensive than shipping stuff to the contiguous United States. I'd guess it's comparable to Hawaii.

Even though both English and Spanish are considered official languages, you'll have a very hard time living there if you don't know Spanish.

[0] https://en.wikipedia.org/wiki/Constitution_of_Puerto_Rico

How is healthcare in PR now?

I can't speak for its quality, but in terms of cost it's much more affordable than the US equivalent.

According to the article, finding specialists in certain medical fields is apparently beginning to become a problem.

I would imagine an authority on Puerto Rico would know what country they were in.

And I would imagine that somebody smart enough to be so certain that Puerto Rico is US territory that they have to comment multiple times asserting their knowledge of the fact would also be smart enough to realize that the poster probably does know that but considers them distinct regions for most intents and purposes and refers to them as such, and that you would choose to just move on and still somehow understand what is being communicated. But I could be wrong. I'm not an authority on the matter.

Yup can confirm. Almost all of the rares specialist is in the metro area. Some of them have a wait of a few months. Some even don't take health insurance and are cash only since Insurances pay so low.

PR is a developed country in a developing country neighbourhood. Healthcare is cheaper than the US but some specialties are hard to get an appointment. The neighbours, DR Cuba, FWI, are a cheap ferry or puddle jump away. So for the common ailments, you have neighbouring islands keeping prices in check.

That's a sailor's perspective on PR healthcare. Since I'm not part of their health care system I looked at it as is it worth it here or do I sail 6 hours to DR. Antibiotics there are 50cents.

PR isn’t a country. It’s part of the US.

It's a territory. It has an independent government, constitution, country code, Olympic team, and elections. Functionally, it is a country.

According to Wikipedia, Puerto Rico is an unincorporated territory of the United States.

Also, it does not appear on Wikipedia's list of sovereign states.

https://en.wikipedia.org/wiki/List_of_sovereign_states

It's not a sovereign state. If you're an American, you don't need a passport to fly there.

You didn't need a passport to go to Canada until relatively recently. That's fairly orthogonal to sovereignty.

Its a colony.

Each of the 50 states also has a government, constitution and elections.

For that to be completely true Puerto Rico would have representation in the federal legislature.

Puerto Rico has it's own Olympic team. Which is sort of a basis for considering PR as a country.

Does Puerto Rico have its own passport? Also, the UK plays as Scotland, England, Wales, and Northern Ireland in the World Cup but they aren't sovereign. So that Olympic argument doesn't mean anything.

Only US States are recognized in Congress. Puerto Rico, among other places is a territory which gives it a delegate to congress, but no direct participation. It's also not considered sovereign, which US States nominally are.

This has advantages and disadvantages... there's no tax, but also no Senators or congresspeople who give a hoot. Sometimes congressional delegations from places with big Puerto Rican populations will push for policy to secure votes on the mainland.

Also remember that it's a colony, and it's standing is colored by the baggage of colonialism, and there is a split between people who favor that status quo, statehood and independence.

Statehood will never happen unless there is a Democratic supermajority in the Senate.

We have a type of universal healthcare but its so mismanaged that its going to blow into pieces sooner or later. Most have private insurance that is on the expensive side of things given the local economy. For example, I pay $700 a month for 3 people and its not even that great.

Few people travel from Puerto Rico to the DR or even Cuba to get Healthcare.

"In the US"

Puerto Rico is part of the United States.

Technically it's a possession and territory belonging to the of the United States, but not part of it.

I'm aware. But Puerto Rico is a commonwealth, so within the context of my post when I wrote "in the US", I was referring to the 50 states and the federal district. I apologize if it wasn't clear.

I found this incredibly obvious given your context.

Given the content of the rest of the post, did you really think the author was unaware of that?

Isn't there a crime problem? The murder rate in PR is like 30% higher than it is in Mexico...

Drug related crimes (gang murders) are an issue. Stay away from certain areas and dont do drugs and you will be ok. Same as in any US state. Other types of crime arent too bad.

To summarize, Puerto Rico's murder rate is higher than the murder rate of the USA and Mexico but no place in Puerto Rico is as deadly as the deadliest places in the USA and Mexico. Allow me to explain.

Using statistics from 2014 (because that's when I last did the research) San Juan's murder rate was lower than the murder rate of Detroit, New Orleans, St. Louis, Baltimore, Newark, and Oakland. It was a tad worse than Chicago. It's also important to keep in mind that most murders in Puerto Rico are the result of gang on gang warfare and just like everywhere else there are some good neighborhoods and some bad neighborhoods. Compared to Mexico San Juan's murder rate is a fraction of the murder rate of cities like Acapulco and lower than infamous border cities like Tijuana.

Puerto Rico as a whole has a higher murder rate than the USA and Mexico because of its ridiculously high population density. It's a small island (roughly the size of Connecticut) but it has one of the highest population densities in the states. Even in rural areas you're only a stone's throws away from your neighbor. In the USA and Mexico, however, you average the murder rate of thousands of safe and quiet towns with the murder rate of a few bad cities so you end up with relatively good numbers.

To give you some perspective, if you were to choose between Mexico and Puerto Rico without intimate knowledge of the two places you would probably choose Mexico because it has a lower murder rate than Puerto Rico. But if you were to choose between Acapulco and San Juan you would definitely choose San Juan because its murder rate is less than a third than the murder rate of Acapulco even though San Juan is Puerto Rico's deadliest city.

Lies, damn lies and statistics in practice.

What I mean is statistics can be considerably more misleading when the methodology is not explained. I found your comment incredibly helpful in understanding the point you were making.

I moved out roughly four years ago, and no longer follow their news very closely, so take my response with a grain of salt.

When I was living there, I generally didn't feel unsafe. As long as you avoid dangerous areas, I think the likelihood of something happening to you is fairly low. Although I'll admit I feel safer in Santa Clara. Certain parts of San Francisco feel pretty unsafe to me. I'd avoid walking around Tenderloin at night just as much as La Perla.

I've been told that even though the murder rate is high, it's mostly due to gang and drug related violence.

One of my friends that lives in the metropolitan area told me that in recent years she has felt less safe than before. She claims that she has perceived an increase in brutality, and that criminals no longer give a fuck. This is a rough paraphrased translation.

> They are motivated both by an urge to help lift Puerto Rico out of its quagmire, but also by a profound attachment to the island — its beaches and countryside, its friendliness, its intimacy and the tug of family.

They're probably more motivated by the complete lack of federal income tax[0]. Funny that this wasn't mentioned once in the entire article.

0. https://www.forbes.com/sites/robertwood/2014/07/04/hate-taxe...

"To qualify, an individual must not have been a resident of Puerto Rico within in the last 15 years."

It seems that "returners" don't qualify for that. Maybe it's just the amazing Puerto Rican food (I'd eat every meal at La Casita Blanca if I could).

The Forbes articles is confusing.

The article is in reference to (but doesn't mention) the "Individual Investors Act (Act 22)"[1], which exempts you from Puerto Rico's own income tax, and limits your IRS liabilities for capital gains tax on long term investments sold within the first ten years of your residency.

Regardless of if you take advantage of the above, you are exempt from Federal taxes.

This is just an incentive atop it.

[1] http://businessinpuertorico.com/en/profit/individual-investo...

I ate at La Casita Blanca earlier this week and was blown away by pretty much anything I tried, as well as the friendliness of the owner and the beauty of the herb garden. First time in PR; the restaurant was a highlight in a week filled with great food, striking architecture, and lovely people. I can definitely see why people would move there outside of tax considerations.

Yeah, I was about to say that it's probably largely because of the policy relief under Fortuño and to some extent his successors. Like how you would expect people to have returned to Detroit if they would make the occasional policy decision which doesn't involve spending more of other people's money.

It's pretty interesting to see how this works out within the U.S. when it comes to personal income tax[0]

[0]: http://www.howmoneywalks.com/irs-tax-migration/

Eric and Bryan, the two founders of Lunchera featured in the article, are good friends of mine from MIT. They definitely didn't return to the island for tax reasons. Puerto Ricans are passionate about their "isla" - hard to explain to people expecting rational reasons.

Not to be inflammatory, but I wouldn't expect nationalism to be hard for Americans to relate to.

He said its hard to explain it to people expecting rational reasons.

That's cool for Eric and Bryan, but I was more making a point about the subject of the article: millennials who are launching startups in Puerto Rico.

The narrative that the article paints about this cohort moving to Puerto Rico just out of pure love of the island sounds starry-eyed and naive. Businesses make business decisions, and incredible tax breaks need to be factored into that rational.

At the very least, the article could have examined this point and dismissed it if it's mostly untrue. But tax incentives (not including the one I mentioned) were barely discussed.

Millennials doing startups usually don't have much income to speak of. That's the nature of young people, and that's also the nature of startups. This is probably why there was little mention of the tax incentive; it's largely irrelevant to people who are investing their few resources into a from-scratch business.

If we're talking about business decisions, there are probably several reasons why you would NOT want to go to PR, which far outweigh the lighter tax burden.

Eric has a love of entrepreneurship and a love for Puerto Rico, and doing a GrubHub-like startup in his hometown of Ponce just totally makes sense in that context. In that light, surprisingly, I think the narrative is far from starry-eyed and naive.

Fair enough. I would like to know what those reasons for not doing business in PR are, because the lenient taxes and low costs of living seem pretty compelling for startups. Especially if you're in tech and can do business overseas.

Some people wouldn't want to run businesses in a Spanglophone territory where shipping is more expensive and electricity can be spotty. The local economy may not be quite as strong depending on your industry, and meanwhile you're sending your kids to private schools because the public ones are questionable. Hospitals are less efficient and many government functions, including the ones with which your company interacts, are slow. Supermarket items cost more than they do in the contiguous states, as do gasoline, natural gas, and electricity. And you will need a car because public transportation is not so good, and often nonexistent. Culturally, there's a very relaxed vibe and a strong sense of economic pessimism, which isn't exactly the hopeful and driven mentality that you may want for a startup.

So maybe you're paying less in taxes but your lifestyle, company culture, and ease of doing business worsen. #tradeoffs

For anyone looking to be in Puerto Rico, the massive tax incentives help as well.

http://puertoricotaxincentives.com/

US Virgin Islands are similar as well.

Definitely real challenges though... these places are poor tropical backwaters. It's a shame as it's beautiful and full of potential.

Poor backwater compared to what? Puerto Rico has a GDP per capita between Spain and Italy.

And a Gini coefficient (.531 as of 2011) between Guatemala (.530) and Colombia (.535). Italy and Spain are at .319 and .359 respectively. The US as a whole is .475.

It's an inequality coefficient, not any kind of measure of how "nice" a country is for someone living there.

Countries with a high Gini, tend to segregate more heavily than those who don't, which for the typical 'rich' software developer means that they'll live in a trendy area and know to avoid the 'ghetto'.

For example, Miami has a high gini at ~0.6 to 0.7 which gives you the palaces overlooking shacks effect of Miami Beach.

High gini also correlates with extreme economic growth, where the benefits fall onto a small group (e.g. software developers), and a reversion to the mean hasn't yet taken place.

> they'll live in a trendy area and know to avoid the 'ghetto'

cough cough the Bay Area. Seriously, though, the Santa Clara County metropolitan statistical area clocks in at 0.45 while New York is 0.60 [1].

[1] https://www.census.gov/prod/2012pubs/acsbr10-18.pdf

County statistics are misleading here. Santa Clara County is a big place (almost the size of Long Island) with lots of municipalities. New York County is just 1 of 5 counties that encompass New York City!

If you look at Brooklyn (Kings County), the number is 0.499, Queens County the number is 0.433.

According to another site, the citywide number was 0.547 in 2013. ( https://nextcity.org/daily/entry/inequality-new-york-city-we... )

rayiner definitely meant per capita GDP. Yes people calling the place a poor backwater have American bias for sure.

St. Croix USVI would be a great place to start a startup. It's on the east coast time zone, and infrastructure is good enough, real estate is cheap (for the Caribbean). There are ample outdoor activities (swimming, snorkeling/diving, kayaking, kitesurfing, fishing, sailing, golf, tennis, yoga, etc).

The incentives of the USVI EDC Program* are quite significant. It's one of the only legal loopholes for US citizens to avoid most income taxes. The main catch is, you have to hire 10 people, including 8 locals (this can include yourself):

  - 90% reduction in corporate income tax

  - 90% reduction in personal income tax

  - 100% exemption on gross receipt tax

  - 100% exemption on business property tax

  - 100% exemption on excise tax payments

  - Reduction in the customs duty from the standard 6% to 1%

  - Tax reduction on royalty income from software developed in the USVI and sold to non-US customers

  - Availability of rental space at below market rates in the St. Croix and St. Thomas Industrial Parks

* https://www.usvieda.org/incentives/edc-program

Do you know of any startups or tech companies in the USVI? I'm located in St. Thomas and there are financial companies that take advantage of edc I haven't heard of any startups or techs.

Tech scene seems kind of dead here.

There's a small handful. Here's one: http://nearix.com/

How can I get in touch with you? Maybe we can connect next time I'm down that way.

Local here. Feel free to contact me (check profile) for anything. :)

We have a incubator called parallel18, and a couple of working spaces. It's not a super huge tech scene but the people are awesome.

How's the internet there? I'd imagine that would be a significant barrier to productivity.

To boost productivity, wouldn't you want the internet to be really bad most of the time? Like "only good enough to read textual docs and ssh into AWS" bad.

Well, depends on what you do. Sure, it can be nice to be offline for some coding, but most work these days, even predominantly coding work, is a team affair and requires communication to work well. Further, being able to get quick access to docs, tickets, etc. is quite useful.

But also, if one is responsible for the functioning of significant amounts of infrastructure, then it's not so great to have to worry about internet flaking out in the middle of working through production issues.

But yeah if you were working on something solo, then bad internet wouldn't matter as much.

People do different work and different things. Some people probably also get reinvogorated after watching HD video streams as a break.

Personally, I prefer fast internet and blocking sites via hosts file, extension, or an app. But I lack a certain amount of self discipline. I doubt being without fast internet for long periods of times and not wasting because of that outweighs having slow internet after the initial change of pace.

Its good and reliable. I pay $65/month for 20Megs. Been working remotely for about 5 years and no major issues.

Something nice about internet in PR is that its constitution explicitly prohibits wire-tapping, although I don't know if it has been challenged in court.

For consumers, there's gigabit internet (both upload and download) without any data caps for $70/mo [0] in part of the metropolitan area. They appears to have commercial offerings [1], but no pricing info is available.

I found this blog post [2] from 2015 claiming that getting internet speeds adequate for streaming a large event can range between $1500 and $3000.

[0] http://optico.criticalhub.com/plans

[1] http://www.criticalhub.com

[2] https://medium.com/@lherrero/como-el-oligopolio-del-internet...

It's actually not that bad. Before I left the Island last year, I had 100MB down / 25MB up in my house. YMMV, but I wasn't even in the metro area, which I imagine has even faster speeds.

I've worked in fajardo and had no issues with internet. I'm in the USVI, in St. Thomas, and despite a very unreliable power gird, I've no serious issues working as most spots have a generator. There is almost no tech scene here but the tax advantages are serious! Some financial companies take advantage of it, but I don't know of anything in tech.

It's an awesome spot for working remotely if you're into the water.

Puerto Rico has such tremendous potential, it's kind of a shame it's not further along than it is. For people who've never been to it, the "feel" of it wouldn't surprise most Americans who've spent time outside of rich major metro areas. Lots of the really bad crime tends to be isolated to certain areas and groups.

There's also a huge mountainous interior that's a world away from the tropical beaches and Spanish colonial towns. Mostly that's the source of the absolutely incredible coffee that comes from the Island.

Why it isn't more like Hawaii isn't entirely clear, but I suspect not being fully integrated into the U.S. Federal system is part of it. The local governance of the Island hasn't been fantastic and most of the Puerto Ricans I know who lived there have long ago since moved to the mainland U.S. to find a better life (many of them also then turn around and buy investment vacation property back on the Island they spend time in every summer).

Still, if you know where to go, and where not to go, and learn some of the local ways of doing things, it can be a very lovely place, great history, good food, right in the Caribbean so other islands are close by...

Some relevant reading before you pack your bags :)

https://www.economist.com/news/finance-and-economics/2172167...

And someone asked why it is not a state yet:

https://www.economist.com/news/united-states/21723149-more-6...

And an year-old article about the troubles facing PR:

https://www.economist.com/blogs/economist-explains/2016/05/e...

I'm not American, so would someone knowledgeable indulge me the obvious question: Why is Puerto Rico not a state while e.g. Hawaii is?

Is it the language -- a Spanish-majority state would not get the approval from other states to join the union? Or something less obvious?

Puerto Rico would need to petition to become a state. (I believe it meets the criteria for becoming a state, but haven't verified that.) There are benefits to remaining a territory, in particular they can create tax inventives that would be precluded if they wete a state.

That makes sense - sort of like the UK or France overseas territories that are not part of the EU.

If I remember correctly, most Puerto Ricans aren't interested in the statehood status (wasn't there a referendum?) probably because it's a pretty major cultural shift.

It's hard to become a state when the majority of the population only speaks Spanish and the island has its own constitution.

I'm not sure what language has to do with it. Also, many/most states have a constitution as well.

Probably not a huge issue - look up first home language in Texas or Arizona. Texas is also like 50%+ Hispanic, and I can't imagine the modern GOP being anti-Texas.

Every state in the USA has its own constitution as well.

One of the things preventing Puerto Rico from becoming a state is the balance of power in the US Congress. The thinking is that a majority of the Puerto Ricans will align themselves with the Democratic Party. That would result in 2 new Democrat Senators which would upset the balance and possibly swing the senate in favor of the Democrats.

There have been similar concerns going back to the 1800s as well with the United States' western expansion and creation of new western states.

Interesting. Puerto Rico's statehood is basically an edge case of the demographic quicksand that underlies the Republican Party's current domination. Trumpism certainly isn't doing the Party any long-term favors in that sense.

You're thinking of DC. Puerto Ricans are actually pretty conservative, there's a chance that DC will finally become a state now that PR has voted to join.

https://rightedition.com/2016/03/11/puerto-rico-rejects-gay-...

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