Puerto Rico: The New Superyacht Hub

Think of Puerto Rico and what springs to mind? A sunny paradise of shimmering whitewashed Caribbean beaches backed by verdant countryside, delicious rum punches, the odd little fishing boat bobbing on the horizon perhaps?

What you probably wouldn’t imagine is that this little US island territory located in the North Eastern Caribbean is the region’s next superyacht hub. So says Marimar Lidin, European Sales Director of the Puerto Rico Tourism Company, who outlined to OnboardOnline exciting plans for Puerto Rico to become the latest Caribbean Superyacht destination at last autumn’s Monaco Yacht Show.  

‘We have already been lucky enough to receive at least 20 of the world’s biggest mega yachts in San Juan, which is the only Caribbean port to allow alongside docking because of its depth,’ says Marimar as we chat in Port Hercule.  ‘Cruise ships can dock there and travellers enjoy coming off the ship and stepping straight onto the cobblestone streets. Being able to walk through the town the moment you step onshore means you can really get to know it.’

Populated for centuries by Aboriginal people known as Taino, Christopher Columbus claimed Puerto Rico for Spain during his second voyage to the Americas in November 1493 and it remained a Spanish colony until 1898. Four centuries of Spanish rule have left a deep imprint on the island’s culture, architecture, language and industry.

‘The port of San Juan has been receiving large vessels since the 15^th century and we now have four main yacht clubs which are prepared to receive these types of vessels,’ adds Marimar. ‘When Puerto Rico was ruled under the Spanish crown, it didn’t have as high importance in terms of gold mines and silver as Mexico and Peru. The reason why the Spanish crown maintained Puerto Rico until 1898 was precisely because of its port and its strategic location within the Caribbean for the Spanish armada on the route to and from Europe.’

With government and private business adopting a united and integrated approach to funding development and attracting the exclusive Superyacht tourist sector, one of Puerto Rico’s most attractive advantages is in being a Caribbean destination with US status. 

‘You can find a unique experience in San Juan,’ adds Marimar. ‘We have a lively bustling modern city with all the infrastructure, standards of service and facilities you would expect from the US as well as the charm and flavour of a 500 year old colonial city with Spanish culture and architecture.

‘Investment incentives are tied in alongside tourism, which is making great strides in the luxury sector. International growth is marked right now at 3.8% in terms of the industry trend and world increase yet the luxury market in Puerto Rico is currently growing at 5%. We are outstripping the international growth rates and this is due to the fact that in the last year or two, Puerto Rico has captured a lot of attention amongst luxury resort travellers.

‘We have one of only two Ritz Reserves in the world, on the north coast of Puerto Rico, 20 minutes from San Juan. It was owned by conservationist Lawrence Rockefeller in the late 1950s and used to be a coconut and pineapple plantation. In the last two years, it has reopened and boasts lovely beachfront rooms and understated luxury with a tropical feel while maintaining the look of a plantation. It also has four championship golf courses designed by leading golf course architect Robert Trent Jones and an incredible spa, which offers a very different experience to other spas in this part of the world, with treetop open-air treatment rooms.’

For superyacht owners looking for Caribbean atmosphere enhanced by the creature comforts of America, the island - one of four main isles in the archipelago - is hard to beat, with a colourful nightlife scene as well as the kind of shopping experience you would expect in New York or Miami, as well as more indigenous arts and crafts, rum and coffee produce.

‘We can see a sustained growth in the next five years because of the facilities we have in place, not just in San Juan but on the East Coast of Puerto Rico too,’ adds Marimar. ‘We have sustained development and growth and it’s exciting to be able to reach out to those yacht owners, captains and crew that are looking for a new Caribbean destination to sail to in the winter. We are concentrating our approach on captains and crews so that they become very knowledgeable about Puerto Rico.

‘Hopefully they will be the prescribers to the yacht owners. We want to send the message that a new undiscovered gem is here, with great shopping, services and berthing which leads straight onto the cobblestones of the old town of San Juan.'

Attractive tax incentives are also likely to appeal as Puerto Rico, while not tax-free, has fiscal autonomy from the US. Under laws Act 20 and Act 22, a boom has been created, with Act 20 offering incentives for service companies whereby people can relocate to Puerto Rico and pay a flat rate of 4% corporate tax versus 38% and not be subject to federal taxes.

The appeal of operating in a US territory without the same tax status is obvious.  Act 22 provides tax incentives for individuals who relocate, requiring them to spend at least 183 days in Puerto Rico to benefit. They pay 0% tax on all passive income, interest and dividends that they receive.

‘Recent figures suggest we have had over 500 people relocate from around the world,’ reveals Rubi Rodriguez of Puerto Rico’s Department of Economic Development. ‘We are 2 ½ hrs fly time from Miami, 3 ½ hrs from New York City and we have direct flights from European capitals. We receive more than 25 calls a day from people in high tax states like California, Connecticut and New York about our relocation packages.’  

Right now, all eyes are on talking the influential Superyacht captains into putting Puerto Rico on the map. ‘Our ports are expanding and redeveloping their facilities and creating an infrastructure that will support and accommodate these yachts, with top line services for owners, their captains and crews,’ explains Rubi.

‘We are concentrating on captains as they wield a lot of control over where the yacht goes. The owner has a lot of trust in the captain and many yachts do not have the owner on board. You can have repainting, reparations and all sorts of work done in Puerto Rico before picking up the owner. We are hoping in a couple of years’ time that we will be a top destination for yacht services.

‘The bunkering and alongside berthing means that while the tedious repair work is being done, the crew can go out and have fun, shop and eat and even keep up with compulsory medical check-ups from qualified US trained physicians.

Some yachts stay for up to 81 days for service and repair work and the feedback from crew and captains is that they have so much fun. Their families come out to stay in hotels, they go to the rainforest and explore the walled city and the Condado district, which has boutiques, hotels and high end shops.’

With American millionaire investor John Paulson the latest high profile hedge fund manager to create a buzz, it seems that Puerto Rico has everything to play for.