Study ranks San Juan as hardest US city to do business in

According to the report, San Juan needs policy changes that foster a more favorable investment environment.

The Center for the Study of Economic Liberty at Arizona State University recently published the “Doing Business North America 2022 Report,” which measures the ease of doing business in 83 major U.S. cities. Now in its fourth edition, the report included San Juan, Puerto Rico, for the first time as a result of the Puerto Rico Institute for Economic Liberty’s (ILE) collaboration with the center, according to the ILE.

The report evaluates the regulatory and public policy environments for business operations, scoring cities across six categories: Starting a Business, Employing Workers, Getting Electricity, Paying Taxes, Land and Space Use, and Resolving Insolvency.

Salt Lake City topped the list, scoring 84.86 out of 100, followed by Boise (83.87), Raleigh (83.22), Atlanta (82.37), and Charlotte (81.87). San Juan, however, ranked last with a score of 40.55, preceded by cities such as Los Angeles and New York City. The study utilized data from 2019 and 2020, categorizing components as “2% federal, 70% state, 4% county, and 24% municipal; therefore, San Juan’s results could be considered a reflection of Puerto Rico,” according to the news release. Certain differences and costs contributed to San Juan’s low score.

“Several components revealed contrasts that explain San Juan’s low score; for example, the number of electricity providers in San Juan is 1 while in 5 cities in Texas and Utah it is 68; and the cost to transfer title on immovable property in San Juan is $1,940.85 while in Charlotte, Durham, Greensboro, and Raleigh it is $26,” said Dr. Ángel Carrión-Tavárez, ILE’s director of Research and Policy.

“The report explains that the importance of ease of doing business studies is that their analysis of indicators is used by the private sector to decide where to invest; this, in turn, can have an effect on living standards in a jurisdiction, since private investment and the integration of people into productive activity — either by creating a business or working — have proven to be drivers of socioeconomic development,” the release reads.

The report emphasizes the relevance to small and medium-sized enterprises (SMEs), which typically operate with fewer resources.

“Large companies have the means to afford the costs of excessive regulations for doing business; but a business-friendly environment contributes to the creation of SMEs, with the benefit they bring to the community and society,” Carrión-Tavárez said.

ILE’s goal in including San Juan in the report is to provide data to make the public policy adjustments needed to improve Puerto Rico’s competitiveness and socioeconomic trajectory.

ILE President Jorge L. Rodríguez said: “This report shows the hostile environment created by the government that entrepreneurs in Puerto Rico face, not only to start a business but to maintain it. The barriers properly quantified and qualified in the study limit the opportunities on the Island and promote dependency, low wages, economic inequality, and emigration.

“In short, and taking these results to the human level, Puerto Rico’s government monster makes it up to twice as difficult for people in our land to materialize their dream of investing, opening a small business, producing, and creating wealth than in all the major U.S. cities studied in this report, because the existing public policy and regulations are less favorable to entrepreneurship and business development on the Island.”

ILE is a nonprofit and nonpartisan organization whose stated mission is to foster a society where individual effort and merit are celebrated, and prosperity is driven by “creativity, entrepreneurship and innovation.”

More information is available on its website.

This article was published originally in News is my Business.

Scroll to Top