Puerto Rico legislator calls for review of toll, contract manufacturing
Introduces bill to evaluate models and improve incentives, policy and investment.
Rep. Ramón Torres-Cruz of the pro-commonwealth Popular Democratic Party has introduced House Bill 256, calling for an in-depth investigation by the Puerto Rico House of Representatives’ Socioeconomic Development and Treasury committees into the island’s manufacturing sector — specifically businesses operating under the “toll manufacturing” and “contract manufacturing” models.
The legislation calls for a comprehensive evaluation of public policies, programs, incentives, and the efforts of the Department of Economic Development and Commerce (DDEC, in Spanish), including the Puerto Rico Industrial Development Co. (Pridco), to promote and strengthen the sector. The bill’s objective is to assess the effectiveness of current strategies and “recommend necessary legal updates to support growth.”
“Puerto Rico urgently needs targeted legislative action to ensure that economic development keeps pace with global changes,” the bill states. “We must focus on strengthening the laws and frameworks that allow our companies to integrate successfully into the global economy, especially as we seek to attract both local and foreign investment.”
The bill emphasizes the importance of the manufacturing sector to Puerto Rico’s economy, particularly under the models defined in the Puerto Rico Internal Revenue Code of 2011.
Toll manufacturing involves processing raw materials or semi-finished goods for another company using specialized equipment, while contract manufacturing refers to producing goods according to a client company’s specifications — often under that company’s brand. These models allow multinational firms to outsource production to local entities while maintaining strict quality standards.
The bill notes that these frameworks have contributed to job creation and positioned Puerto Rico as a reliable source of high-quality goods. However, Torres-Cruz stressed the need for updated tools and strategies to expand such operations, especially amid global changes such as increased U.S. tariffs stemming from trade policies under President Donald Trump.
The legislation also calls for broader collaboration across government branches, not just the executive branch, which recently issued Executive Order 2025-012 to streamline investment procedures, train a specialized workforce and attract foreign capital through investment summits and centralized services.
“This is about aligning all government efforts to promote reshoring, investment and growth,” the bill reads. “DDEC and Pridco must act as facilitators between investors and contract manufacturers.”
The bill concludes with a call for an urgent, collaborative investigation into the effectiveness of existing economic development strategies. It has been referred to the House Internal Issues Committee for review.
