PUERTO RICO Trends and Developments Contributed by: Amanda Billoch-Vázquez, Antonio Pietrantoni, Manuel del Valle and Iván Marrero, Pietrantoni Mendez & Alvarez LLC
exceed 15% of its net income for the year prior to this deduction. Driven by Act 60’s tax incentives, private equity deal-making in Puerto Rico has accelerated, fuelling a marked rise in mergers and acquisitions across a diverse range of sectors. Private equity funds and venture capital firms are increasingly leading both buy- and sell-side transactions, taking advantage of flexible deal structures and the evolving local regu - latory framework. Recent years have seen a steady increase in transactional volume and the sophistica - tion of deal-making, with private equity now central to M&A activity in industries such as real estate, renew - able energy, healthcare, technology, tourism and hos - pitality. Healthcare industry consolidation Puerto Rico’s healthcare industry has been one of the economic sectors most impacted by Puerto Rico’s economic and demographic challenges. As a result of the emigration of working-age Puerto Ricans during the last decade (including physicians and other skilled medical professionals), the proportion of inhabitants above the age of 65 has increased significantly, reach - ing approximately 770,000 in 2023 based on recent census estimates (out of a population of approxi - mately 3.2 million). As a result, local healthcare mar - ket dynamics have shifted towards services that spe - cifically cater to an ageing population, leaving critical supply gaps for certain specialty practices that cater to a wider segment of the population. In addition, more than 65% of individuals living in Puerto Rico receive healthcare through Medicaid and Medicare, but federal funding restrictions not pre - sent in the US mainland have further complicated the local health system’s ability to provide key services and offer competitive compensation to physicians and nurses in line with US mainland standards. The challenges faced by Puerto Rico’s healthcare sector have led to significant consolidation – a trend that is expected to continue during the next couple of years. The Island has seen mergers and acquisitions among healthcare providers, insurance companies and, in particular, hospitals. Hospital consolidation has been driven, in part, by the need to address finan -
cial constraints and the desire to create more sustain - able healthcare delivery models that can adequately leverage economies of scale. Tourism and hospitality Tourism is one of the key economic drivers in Puerto Rico, contributing significantly to the Island’s GDP. A critical advantage that Puerto Rico has over other Car - ibbean destinations is the fact that Puerto Rico shares a common border with the USA, meaning no passport is required for US citizens to travel to the Island. The tourism and hospitality sector provides jobs for thousands of Puerto Ricans across various compo - nents, such as hotels, restaurants, tour operations and transportation services. Despite challenges arising from the economic crisis and recent natural disasters, the Island’s tourism and hospitality sector has shown remarkable resilience, bouncing back with renewed vigour following the COVID-19 pandemic and main - taining unprecedented rates of growth in recent years. As an illustration of this trend, based on the most recently available figures, Puerto Rico’s main pas - senger gateway – Luis Muñoz Marín International Air - port – handled 1,186,630 passengers in August 2025, representing a 4.6% increase from 1,134,323 over the same month last year. During the same month, hotel demand surpassed 367,000 room nights, reflecting a 9.4% year-on-year increase. In recent years, the tourism sector in Puerto Rico has been working on diversifying its offerings to attract a broader range of visitors. Beyond the traditional sun, beach and cruise ship tourism, efforts have been made to promote cultural, culinary, historical and adventure tourism. This diversification aims to pro - vide tourists with a more varied experience, encour - aging longer stays and increased spending. Puerto Rico has also been embracing sustainable tourism practices, aligning with global trends in responsible and eco-friendly travel. Initiatives include the develop - ment of eco-friendly accommodation, nature-based tours and efforts to protect and preserve the Island’s natural resources. Among other initiatives, the Puerto Rico government has been actively supporting the tourism industry through tax incentives. Specific tax incentives under
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