‘The tariff issue is a controversial one, but for Puerto Rico, it’s a great opportunity.’
So said Puerto Rico Governor Jenniffer González-Colón in May of 2025, of the Trump administration’s various announcements of ‘reciprocal tariffs’ on all countries not subject to other sanctions, including an increase of tariffs on steel and aluminium imports from 25% to 50%.
Despite the continued residual fallout from the devastation of Hurricane Fiona (which struck in September 2022) and the IMF’s projection for 2025 placing GDP growth at -0.8%, in addition to ongoing power outages, recent developments continue to suggest potential for a more optimistic direction for Puerto Rico’s economic future.
In March 2022, the nation formally exited bankruptcy, following what was reported to be the largest public debt restructuring in US history. Stepping out of the shadow of over $70bn in debt, the country was finally free to repay bondholders, settle approximately $1bn-worth of claims by residents and local businesses, issue over $10bn in bonds and reimburse the public pension system up to $1.3bn.
In March 2023, former Governor Pedro Pierluisi, addressing repeated power outages and rising energy costs, announced the approval by the US Federal Emergency Management Agency of microgrid projects to supply the entirety of the power to the island municipalities of Vieques and Culebra, both popular tourist destinations, in addition to an infusion of $100m in federal funds to create a voucher programme to cover up to 30% of the costs of installing battery-backed solar systems in the homes of residents. In October 2024, the US Environmental Protection Agency announced Puerto Rico would receive $67m in funding to bolster its drinking water and wastewater infrastructure.
Such steps, combined with the unveiling of a new fiscal plan for a complete overhaul of Puerto Rico’s education, tax and infrastructure sectors by the federal control board that oversees the nation’s finances (in April 2023), and a boom in manufacturing and a drive in the wake of US global tariffs to encourage multinational companies to move their manufacturing facilities to the island (where they would be tariff-exempt), indicate the potential for an upward economic trend (though one accompanied by a share of uncertainty), as reflected by the legal market.
In the corporate, commercial and banking space, respondent firms described a soft market for M&A deals, with clients expressing concerns regarding the effects of US tariffs on their international supply chains. Firms interviewed also noted a trend by international clients toward consolidation, particularly in the real estate sector. In the dispute resolution arena, firms described a steady commercial litigation landscape, with an uptick in consumer class action law suits and tax litigation. In labour and employment, firms describe their anticipation of the impact of the Fundamental Right to Religious Freedom in Puerto Rico Act (a measure relating in part to vaccination and pandemic-related policy) which states that the Government ‘may provide reasonable accommodation to any employee who requests it promptly based on religious beliefs’. Other firms cite the policies of the Trump administration in relation to their effect on DEI programmes. In real estate, respondent firms describe a slowdown in deals in the residential sphere. In tax, teams point to the positive effects of tax incentives on a booming market for advising high-net-worth individuals on estate planning.
In the legal market, full-service firms McConnell Valdés LLC, O'Neill & Borges and Pietrantoni Méndez & Alvarez LLP continue to dominate in most practice areas, although other prominent domestic firms include Ferraiuoli LLC (a key force in the market in the IP space, along with Sifre Group), Littler Mendelson, P.C. (a leader in labour and employment), Estrella LLC, Marini Pietrantoni Muñiz, LLC, and Toro Colón Mullet, P.S.C. (a leader in matters relating to energy, natural resources and the environment). International firms DLA Piper Puerto Rico and ECIJA SBGB also have a strong foothold in the market.
