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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
If you're starting a business in Puerto Rico, you'll need a Certificate of Incorporation, an Employer Identification Number (EIN) from the IRS, and the necessary business licenses.
Your business licenses are essential for doing business within Puerto Rico. However, each of these certificates is different. Which one you apply for can depend on your industry and business type.
Here, we'll review how to apply for a business license in Puerto Rico.
Puerto Rico Business License: Key Takeaways
Any business entity in Puerto Rico must apply for a Merchant's Registry Certificate before starting business operations.
Depending on your industry, location, and activities, your business might require additional licenses and permits on the federal, state, and city level,
After obtaining your relevant business license(s), staying up-to-date on license renewal requirements is crucial to avoid harsh penalties.
Ensuring you have the right business licenses and permits is crucial. Let us manage the complexities for you, so you can stay focused on what you do best — running your business.
What Is a Business License?
A business license is a document that gives you the legal right to run and maintain your business within a certain geographical jurisdiction. Each state might have different requirements for a business license, and you may need multiple on the federal, city, and local levels.
There are several reasons why it's crucial for small businesses, incorporations, and limited liability companies to obtain a business license:
Legality: A business license ensures that the company or business owner legally operates under state and federal laws in Puerto Rico.
Regulation: A business license proves that a business will adhere to state or federal rules, and appointed authorities can revoke or fine companies that violate laws and regulations outlined in the business license process.
Tax and revenue tracking: Many state licenses help the government track revenue and tax, meaning the federal government can ensure that the company pays taxes accordingly.
Business owners might confuse business permits with business licenses. Permits grant business owners government authorization to do particular activities. Examples might include specific construction, advertising, and restaurant permits. On the other hand, business licenses are necessary for any company to operate legally.
Future business owners should also differentiate between obtaining a license and registering a business. Business registration only refers to establishing the company as a lawful entity, while licenses allow the business to operate legally. Depending on your industry, you might need to apply for several business licenses before conducting business.
Get Your Puerto Rico Business License in 7 Steps
Business owners must comply with state regulations and apply for a business license to operate legally within Puerto Rico. However, there are multiple certificates of this nature.
Generally, the type of permit or license you need might depend on your industry, location, and business type. Some certificates are also mandatory for all businesses. Let’s dive into the different types your business might need.
Step 1: Apply for Puerto Rico General Business Licenses
According to the PR Department of Economic Development and Commerce, any business formation within Puerto Rico, including sole proprietorships, must have a Merchant's Registry Certificate.[1]
This professional license is legally mandatory in Puerto Rico and must be publicly displayed in storefront businesses. You can complete an application and file it with the Puerto Rico Treasury Department 30 days before doing business.[2] It requires no filing fee to apply.
Step 2: Apply for Federal Licenses for Puerto Rico Businesses
The federal government regulates specific industries requiring extra licenses for lawful operation. Learning if your industry is regulated is essential for new businesses that are almost ready to take off. Each industry is overseen by a board or federal organization, requiring specific licenses and permits.
Some examples include:
Aviation: In most cases, the Federal Aviation Administration (FAA) will regulate these companies.[3]
Agriculture: If your business intends to use agricultural products and move plants or animals over state lines, it must be regulated by the Federal Department of Agriculture (FDA).[4]
Communications: Businesses involving telecommunications, broadcasting, or satellite communications will fall under the Federal Communications Commission (FCC) jurisdictions.
Other regulated industries include alcohol, tobacco, and firearms, which the ATF regulates, and the pharmaceuticals and medicine industry, regulated by the FDA.
Step 3: Search for Puerto Rico Permits and Licenses
Depending on your industry, your company might need additional licenses issued by Puerto Rico.
Internal Revenue License
Regulated items like gasoline, alcoholic beverages, tobacco, firearms, and motor vehicles will require an Internal Revenue License, which the Treasury Department of Puerto Rico issues.[5]
Permiso Unico
Instead of applying for multiple permits, you can apply for Puerto Rico's single-use permit. It combines a sanitary license, use permission, environmental compliance license, fire prevention certification, and any applicable business license(s).
You need a Permiso Unico before applying for the Patente Municipal, a municipality tax license. We’ll discuss this license in the next step.
Step 4: Search for Local County or City Puerto Rico Business Licenses
Once you've applied and received the relevant permits on the federal and state level, it's time to move on to specific city and municipality licenses. These can differ depending on your chosen industry. For additional information, you should contact your city's local tax office.
Regardless of your city in Puerto Rico, you will need to obtain a Patente Municipal. This business tax certificate ensures that your municipality can tax your revenue in compliance with city laws.
Some other necessary permits might include the following:
Health permit: This permit is for industries in healthcare, food services, and any business that could impact public health.
Building permit: Each municipality might have different rules and regulations for building permits.
Special event permit: Any business wanting to hold open public events might require a special event permit.
We strongly recommend contacting your municipality’s tax office to ensure your business entity has everything necessary. For example, the capital city of San Juan also requires an application for an in-city business certificate.[6]
Step 5: Search for Puerto Rico Professional Licenses
Once you've applied for federal, state, and city licenses, you must consider applying for a professional license. These certificates ensure you meet the relevant educational and experiential criteria to conduct your profession correctly.
Some professions that would need a professional license include:
Doctors
Lawyers
Architects
Engineers
Plumbers
Each specific profession has a board appointed to oversee examinations and the granting of their respective business licenses. For example, a plumber would apply for a license with the Puerto Rico Department of State Professional Credential Services office.[7]
Step 6: Apply for a Puerto Rico Home-Based Business License
If you’re starting a home-based business in the Commonwealth of Puerto Rico, such as a home daycare business, research your specific municipality website for any permits regarding home-based businesses.
Certain municipalities might have specific exemptions and won't require a home-based business license connected to your physical address. However, it's still best to be safe and check with relevant agencies.
Step 7: Maintain Your Puerto Rico Business License
Besides obtaining the relevant business licenses on multiple levels, you'll also have to maintain them throughout the years through regular license renewal. For example, the Permiso Unico must be renewed each year. Failure to do so can lead to penalties, fines, and business dissolution.
Apply for a Puerto Rico Business License Online
Once a new business gets the relevant licenses, it'll be ready to operate within Puerto Rico. However, business license applications take time, energy, and effort.
We’re here to help. Simply fill out our business license questionnaire, and we’ll handle the research and paperwork with the relevant authorities. You can just sit back and focus on growing and operating your businesses. Contact us today to apply for a business license in Puerto Rico.
Focus on Your Business: Dive into your passion while we handle the intricacies of acquiring the necessary local, state, and federal business licenses and permits.
Simplify Your Paperwork: Complete our straightforward questionnaire, and we’ll handle all the required filings for you, accurately and promptly.
Stay Compliant: Avoid the risks and severe repercussions of non-compliance. We’re here to ensure your business remains in good standing.
FAQs
How do I get a business license in Puerto Rico?
Getting a general business license in Puerto Rico requires filing for the Merchant's Registry Certificate with the PR Department of Economic Development and Commerce. However, depending on your business activities, industry, and location, you might need additional licenses on both state and city levels.
Does Puerto Rico require a general business license?
Yes, the general business license in Puerto Rico is the Merchant's Registry Certificate, according to the PR Department of Economic Development and Commerce.
Can you sell things in Puerto Rico without a license?
Any business within Puerto Rico must acquire a Merchant’s Registration Certificate before commencing business operations. Your business might need additional licenses to be lawful. For example, certain heavily regulated items like tobacco require licenses and permits at the federal level with ATF.
Do I need a special license for an online business in Puerto Rico?
There are no specific licenses for online businesses in Puerto Rico. However, you'll still need your industry's relevant federal, state, and city licenses.
Can I collect sales tax in Puerto Rico without a license?
No, you must apply for the Patente Municipal Tax license before collecting sales tax.
How much does a Puerto Rico business license cost?
Each business license has unique costs and filing fees. However, there is no fee associated with a Merchant's Registration Certification in Puerto Rico.
What's the penalty for not having a business license in Puerto Rico?
The penalties for not having the appropriate license will depend on the industry and level. Generally, penalties could include restrictions, fines, complete closure of businesses, and even imprisonment.
Bibliography
PR Department of Economic Development and Commerce. "A Guide to Doing Business in Puerto Rico." Accessed July 25, 2023.
Commonwealth of Puerto Rico Department of the Treasury. "Application for Merchant’s Registration Certificate." Accessed July 25, 2023.
Federal Aviation Administration. "FAA Regulations." Accessed July 25, 2023.
Federal Department of Agriculture. "Licenses." Accessed July 25, 2023.
Department of Revenue. "What to do to apply for an Internal Revenue License?" Accessed July 25, 2023.
City of San Juan. "Business License." Accessed July 25, 2023.
Department of State. "Master and Journeyman Plumbers." Accessed July 25, 2023.
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