As a U.S. territory, Puerto Rico has a unique process for those who want to become a general contractor. To do so, you’ll need to first register your business in PR, pay all fees, and register as a contractor with the Registro de Contratistas.
Use this guide to learn all you need to know about how to become a contractor in Puerto Rico. Do note that most of the links included lead to official websites of the Puerto Rican government, which are originally in Spanish.
Do You Need a Contractor’s License in Puerto Rico?
Puerto Rico does not issue general contractor licenses, but they do require all contractors to be registered within the territory. The Oficina de Construcción del Departamento de Asuntos del Consumidor – Office of Construction of the Department of Consumer Affairs (DACO) handles this registration application.
Certain specialties, such as electrical contractors, plumbing contractors, and HVAC contractors, may need additional licensing or registrations by their supervising government departments. Always check with your supervising department before beginning any new contractor work in PR.
Contractors working directly for federal projects are not required to register if only working under federal regulations.
Contractor Duties in PR
As of 1995, DACO has considered contractors to be any natural or legal person who is dedicated to the business of building residences, as well as modifying, altering, installing, and repairing parts of buildings related to housing, roofs, and other structures. This includes those working with carpentry services, home improvements, masonry, and other similar repairs.
Obtaining Your Puerto Rico Contractor Registration
Before registering as a contractor in PR, you’ll need to register your business with the territory and then complete a thorough contractor’s registration form.
- Registering Your Business in PR
Puerto Rico recognizes three types of registered businesses: Corporations, LLCs, and Societies. Most contracting work will be done under a corporation or LLC.
You can also register as an individual contractor, but you will need to know your supervising company’s employer identification number and other company information before registering.
Corporations are classified into domestic and foreign categories, as well as for-profit, nonprofit, and public benefit groups.
If you are doing work in PR as a foreign company, you will also need a certificate of authorization to do business in Puerto Rico. To do so, you’ll need to show your certificate of existence from your home country or state, name your authorized agent/representative in Puerto Rico, submit a statement of assets and liabilities, state your business purpose in PR, and list any additional documents and information on key directors. The authorized agent is the person overseeing the work of the company and is listed on all official documents.
All corporations must file an annual report in PR annually, which will include the following information:
- Name and incorporation number
- Address of designated office
- Name of residential agent/representative
- Name and address of 2+ officers
- A financial balance sheet
- Sheets exceeding $3 million in business volume must be audited by a PR Certified Public Accountant (CPA)
Limited Liability Companies (LLCs), on the other hand, are created by one or more persons by filing a certificate with PR. They are also labeled into the same group categories as Corporations.
LLCs do not need to file annual reports, but they must pay a $150 annual fee.
To register your LLC or Corporation, you’ll first log on to the Registro Electronica de Corporaciones y Entidades – Electronic Registry of Corporations and Entities. You’ll pay a fee and create your business name with the state, after which you’ll need to get an employer identification number through the IRS.
After this, you’ll register with the Treasury through the SC 4809 form. You will also need to sign up with the Treasury for the Registry of Merchants through the SC 2914 form online.
Using your employer identification number, you’ll then register with the Department of Labor and Human Resources, as well as for State Unemployment and Non-Occupational Disability Insurance. You can do this online.
Finally, you’ll need to take out a poliza del Fondo del Seguro del Estado – State Insurance Fund policy.
- Applying for Contractor Registration in PR
Once your contracting business is legally up and running in Puerto Rico, you can register as a contractor in the territory. You’ll need to fill out an official application called the Solicitud Registro de Contratistas.
You should have the following ready:
- Your license number, if applicable
- Your employer identification number
- Your driver’s license number
- The residential/representing agent, if applying under a corporation
- Their license number, if applicable
- A $205 application fee
- A negative criminal record of the individual or entity representative issued by the Puerto Rico Police, within the past six (6) months or less
- The gross business volume of your business from the last year, as shown through your income tax return and/or a municipal patent
- A bond depending on your gross business volume, as shown below:
- $0-$50,000: 10%
- $50,001-$99,999: 8%
- $100,000-$499,999: 6%
- $500,000+: 4%
- If you are a new contractor with no prior business history, you’ll have to submit a bond of at least $4,000 if your volume is more than $50,000
- A 2” x 2” photo of the representative
- A copy of the representative’s driver’s license
- A Certificate of Incorporation from the Department of State, if a domestic LLC OR
- A Certificate to do Business in Puerto Rico, if applying as a foreign business
- An ASUME debt certification, if applying as an individual
- A copy of the business’s Registry of Merchants from the Treasury
- A copy of the business office’s water, electricity or telephone bill showing the official business address
- The Declaration of Compliance with Responsibilities to Consumers Form
Once you have all of these documents and information, you will complete, sign, notarize, and submit your application for registration as a contractor. Once approved, you can begin your contracting work.
Contractor Salaries in Puerto Rico
The lowest-paid PR contractors can start out in the $45,000 range, while top earners enjoy salaries above $100,000.
Contractor salaries in Puerto Rico vary greatly depending on the type of contractor work you do, where in PR you’re working, and whether you own your own contracting business or work as a subcontractor. Additionally, the more work experience you have, the higher your earning potential.
This article can also be read in: Spanish
