Puerto Rico: the benefits of offshore in the United States.

A call center need not move out of the country if it wants the same cost-saving benefits of going offshore. Sound impossible? The Commonwealth of Puerto Rico, which offers a host of financial benefits and very low labor costs in the U.S., can provide your call center with the best of both worlds.

As a United States community with a foreign tax structure, Puerto Rico Industrial Development Company (PRIDCO) has said that the commonwealth offers a value that no other location can match. A business can have the benefits and protections of operating within a U.S. jurisdiction, with the added tax benefits of operating under a Controlled Foreign Corporation (CFC) structure. In addition, Puerto Rico's government offers a wealth of incentives and favorable tax laws combined with cash grants, tax credits and venture capital initiatives.

Miami-based Atento has selected Puerto Rico as the place to develop several call centers. Total Atento employment is expected to reach 1,500 jobs in two years, and 3,000 jobs within the next five years. Overall, the company will invest $25 million to establish its operations on the island. Atento manages call centers in 15 countries and has 55,000 agents worldwide.

In addition to Atento, American Airlines, AT & T, the Federal Emergency Management Agency (FEMA), the U.S. Social Security Administration and the U.S. Internal Revenue Service also operate call centers in Puerto Rico.

Although the U.S. federal minimum wage of $5.15 an hour applies, a favorable wage differential exists on the island. The average hourly compensation production cost in Puerto Rico, based on data from 2000, is $13.47 compared to $17.94 on the U.S. mainland. Hourly earnings in Puerto Rico's manufacturing sectors average between 65 and 80 percent of the overall U.S. figures. Labor costs are lower than most competing locations for high technology industries.

Workforce

The labor climate in Puerto Rico combines a pool of bilingual workers with friendly labor relations and infrequent business disputes, making it extremely conducive to business. Late industrialization within equitable, democratic institutions has fostered a culture of excellence and cooperation in Puerto Rico's manufacturing labor force.

U.S. federal employment laws apply in Puerto Rico, including mandated benefits such as Social Security taxes. Employers are also subject to local laws and regulations. The law allows for flexible work schedules, continuous shifts and minimum breaks between shifts. The same collective bargaining laws govern organized labor as on the U.S. mainland. Only six percent of employees in private sector manufacturing are union members.