Puerto Rico’s Minority Business Enterprises generated $9.8B in 2023
The finding is part of the 2023 Economic Impact Report by the Puerto Rico Minority Supplier Development Council.
Minority Business Enterprises (MBEs) in Puerto Rico, defined as for-profit businesses with at least 51% ownership, management and control by qualified minority group members, generated $9.8 billion in 2023, a significant increase in economic activity for the sector.
The data comes from the 2023 Economic Impact Report by the Puerto Rico Minority Supplier Development Council (PRMSDC), which also highlighted growth in revenue and job creation.
Between 2022 and 2023, the number of PRMSDC-certified MBEs increased by 8.2%, rising from 501 to 542 businesses. This growth underscores the success of certification and support initiatives aimed at strengthening minority-owned enterprises.
“These figures illustrate the vital role of MBEs in driving economic development and job creation, demonstrating the effectiveness of PRMSDC’s support and certification programs,” the report stated.
Direct employment by MBEs surged 40.7% year-over-year, with 11,000 new jobs created, bringing the total to 38,000. Including indirect employment, these businesses supported 61,000 jobs, reinforcing their importance in Puerto Rico’s labor market.
Total wages paid by MBEs reached $2.6 billion in 2023, reflecting their substantial contribution to household incomes and local purchasing power.
Sustaining growth amid challenges
Although the sector has made significant progress in recent years, PRMSDC officials and economists warned about a potential economic slowdown and its impact on the growth and sustainability of these companies in Puerto Rico.
During a roundtable discussion on the report’s findings, participants called on the local government to focus on providing incentives for entrepreneurs amid a constantly changing economic environment.
They also addressed the implications of the global minimum tax and the need to prepare for opportunities arising from the potential relocation of manufacturing companies to Puerto Rico under the incoming administration of U.S. President-elect Donald Trump.
Minority businesses face several risks that could threaten their sustainable development, said PRMSDC Executive Director Francisco Cabrera.
“Global economic uncertainty, coupled with local challenges such as energy costs and logistics, puts the viability and growth of our minority businesses at risk,” he said.
A key topic during the discussion was how minority businesses can adapt to remain competitive.
“The implementation of the global minimum tax represents both a challenge and a great opportunity for Puerto Rico,” said PRMSDC Chairman José Quiñones.
This tax, which sets a minimum of 15% on corporate profits, could negatively affect Puerto Rico’s economic ecosystem if appropriate legislative measures are not taken, he noted.
“Inaction by the public and private sectors could result in a significant loss of tax revenues and foreign investment that could otherwise have been used to strengthen the local industrial base,” he said.
However, the global minimum tax was also viewed as an opportunity to improve the competitiveness of minority businesses in Puerto Rico. If implemented correctly, it is estimated to generate approximately $3.8 billion annually in revenue.
“It’s imperative that we adopt legislation that will allow us to capture these revenues before they are diverted to other jurisdictions,” said Jorge López, chairman of the PRMSDC Minority Business Committee.
The executives proposed forming a committee of experts to determine how these new revenues should be invested to sustain and expand the current industrial base.
