Gov. Alejandro García-Padilla on Wednesday signed Law 545, known as the “Microenterprise, Small and Mid-Sized Business Support Act,” to support that sector of the Puerto Rican economy.
The law supports SMEs by strengthening the policy requiring the government to buy from these companies, encouraging the integration of professional and new entrepreneurs in the business world, giving priority to SMEs in the granting of discretionary funds that the government has to subsidize payroll for new or existing jobs, and providing an accelerated permitting process.
“This law will be for SMEs what the Economic Development Incentives Act and previous industrial incentive laws have been for manufacturing in Puerto Rico,” García-Padilla said during the signing that took place at the Capitol in San Juan.
“That’s how important it is. The island is undergoing the biggest transformation in its recent history.”
An estimated 95 percent of companies in Puerto Rico are SMEs with fewer than 50 employees. They are responsible for a quarter of the jobs on the island and nearly half of those generated by private enterprise, the government said.
That said, the governor stressed that “the path to sustainable economic development will necessarily have to include SMEs. Encouraging SMEs is to encourage local production and the creation of wealth that remains in local circulation.”
The new law also amends the Government Procurement Reserves Act to increase the percentage to 20 percent, and the Puerto Rico Employment Security Act to establish a reserve of 60 percent for SMEs when granting subsidies provided to the private sector.
The law was signed to coincide with this week’s celebration of Puerto Rico’s small and mid-sized businesses.
“This is a double celebration. On the one hand, we recognize the inventiveness of local entrepreneurs during this Small and Medium Business Week, and secondly, we are very pleased about the governor’s signing into law legislation that is so fundamental for the sustainable development of the SME sector,” said Enid Monge, president of the United Retailers Association, known as CUD in Spanish.
“It’s good to see how we move from words to action. To accomplish this task, it is necessary to have an appropriate environment to do business and a public policy that fosters it,” she said.
As for the granting of permits, the legislation seeks to ensure that the economic activity of SMEs is not interrupted over matters related to obtaining the go-ahead from the government.
To attain that, the Puerto Rico Permit Process Reform Act has also been amended to enable granting conditional or temporary permits for activities that do not represent a risk to health, the environment or security, and conform to the status of the place where the activity is taking place.
The new law also creates the Puerto Rico Microenterprise, Small and Mid-sized Retailers Support Board.