As a small business owner in Puerto Rico, I’ve seen how the immense potential of our professional services is stifled by an overwhelming regulatory system. About 20% of our annual costs go to legal and accounting services just to comply with local laws. These funds could otherwise be invested in growing our business—hiring, innovating, and increasing revenue.
The inefficiencies of our system were glaringly clear when we bid on a small government contract. It required 26 documents, many notarized, and compliance costs ran into the low five figures—just to submit the bid. Puerto Rico’s bureaucracy reflects the fact that it has the highest ratio of elected officials per capita in the world. For every 10,000 residents, Puerto Rico has about 6.5 elected officials, compared to 1.6 per 10,000 in the United States. In contrast, Spain, coincidentally Puerto Rico’s former colonizer, has just 0.9 elected officials per 10,000 residents and remains one of the most efficient democracies globally.
Elected Officials per 10,000 Residents
We’ve been fortunate to be part of local startup incubators, and we’ve raised enough capital to survive in this challenging environment. We’ve also had the privilege of working with some of the best professional services providers on the Island—experts who have guided us through Puerto Rico’s complex regulatory framework. But not every business is as lucky. Many small businesses live in fear of unwittingly breaking the law because of the complexity and opacity of regulations. The risk of non-compliance often isn’t a matter of negligence but of navigating a system so convoluted that even well-meaning efforts can fall short.
These inefficiencies act as invisible taxes, paid in wasted time and lost opportunities. Businesses that could create jobs and drive economic growth are instead forced to spend resources navigating unnecessary red tape. And it’s not just businesses that are impacted—even the professional services sector, which benefits from compliance work, would do better in a system that fosters growth. A thriving business community would create far more demand for lawyers, accountants, and consultants focused on expansion and innovation rather than survival.
Puerto Rico needs a Department of Government Efficiency. By cutting unnecessary red tape and streamlining processes, we can create an environment where businesses can grow, create jobs, and drive innovation. A stronger, more efficient system benefits everyone—business owners, workers, and taxpayers alike. It’s time to remove the barriers holding us back and build a Puerto Rico where opportunity thrives.
