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

"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/