The Commonwealth of Puerto Rico or commonly called Porto Rico is a group of islands situated in the northeast Caribbean Sea. The capital of Puerto Rico is San Juan which is also the most populous city. Its official languages are English and Spanish. As the unincorporated territory of the United States, the currency used here is US dollars. Puerto Rico’s economy is mostly based on the manufacturing of commodities like electronics, textiles, pharmaceuticals, and petrochemicals. Apart from manufacturing, Puerto Rico has to depend on the import of raw materials due to the scarcity of natural resources on the island. World Bank declared Puerto Rico as a high-income economy but the economy is facing many backlashes due to natural calamities and the excessive debt crisis faced by the government. Moreover, poverty in Puerto Rico is measured to be more than the poorest state of the US, having 45% of the population under the poverty line.
Tourism has also been a contributor to its GDP. Although Hurricane Maria halted tourism on the island, the government came up with many campaigns to rebuild the infrastructure and return back to the-before-the-Hurricane tourism strength.
Best forex brokers for Puerto Rico are Hotforex, Instaforex, Fxpro, XM, IC Markets, and Avatrade. They already have many Puerto Rico clients, chat native language support, and special promotions for this geographical area.
Top Brokers in Puerto Rico list:
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Top forex brokers in Puerto Rico are Hotforex and XM.
Trading and Investing In Puerto Rico Markets
Puerto Rico’s trade and finances are highly influenced by the US because of the integration of Puerto Rico’s financial system into the US financial system. There are no international border restrictions on the trade or travel from Puerto Rico to the US or vice versa. Additionally, like any other state of the union, it has to take permission from the US government to enter any other international trade or organization. A number of US-based companies have invested and are operating their businesses in Puerto Rico, bringing in the much-needed investment and work opportunities for the Puerto Ricans. The presence of the US Federal Agencies on the island provides it with an institutional framework and modern infrastructure.
Puerto Rico does not have its own Stock Exchange market, it has a Stock Index. That means there is no proper platform to trade in Puerto Rico but one can compare stocks using Stock Index. Broker in Puerto Rico is not hard to find. Look for a broker that can help you to understand different securities available for investment.
Types of Trading and Accounts in Puerto Rico
With close proximity to the financial market of the USA, traders have a number of opportunities to trade in the financial markets of Puerto Rico. The best way is to look for the best broker in Puerto Rico and start trading in the securities of your interest and that can give you favorable returns. The following are some available securities and accounts that the market of Puerto Rico has to offer to the traders.
- Forex Trading – The base currency of Puerto Rico is US Dollars which makes it even more demanding fin the Forex market due to its high liquidity feature in the international market. Forex is legal and very much active in Puerto Rico as it is an important aspect of import and export which is a major part of Puerto Rico’s economy. The government also gives tax benefits to those who earn capital gains by trading in its market, given that they inhabit on the island for a certain period of time while trading.
- Commodity Trading- Commodities generally refer to the raw material that is used on a daily basis. When these commodities are electronically traded between economies, it is known as commodity trading. Prices of the commodities are determined by the trends in the market. Although the major trading partners of Puerto Rico are the US States, the island has significant trading partnerships with some European countries, Japan Ireland, and Brazil. The commodities that form a major part of the exports are petrochemicals, foodstuffs, and computer electronics.
- Cryptocurrency- Cryptocurrency in Puerto Rico paved its way after Hurricane Maria. The sole reason for its high demand on the island is the tax benefit associated with it. Trader found out about the tax exemption on capital gains in Puerto Rico that is available to those who reside here. So, they started settling on the island after selling out their properties in the States. Blockchains and cryptocurrency are what these investors plan to define the future of this island. They aim to develop a ‘Crypto Haven’ in Puerto Rico.
- Islamic Accounts- Brokers en Puerto Rico offers special accounts like swap-free or Islamic accounts to the traders. These accounts are associated with the Islamic law of not collecting profits, also known as the Sharia Law. Traders can ask the broker about such accounts and trade according to their preferences.
Benefits and Drawbacks of Trading in Puerto Rican Market
Puerto Rico has attracted many investors and traders towards its market due to the influence of the US government and the USD being the basic currency. Many traders are investing and living on the island enjoying the surplus gains due to the tax benefits as well as enjoying the island’s beauty. A major part of these traders is US citizens because they can only get such tax exemption in Puerto Rico as the US citizens have to pay tax on their global income. The infrastructural development on the island also proves to be the plus point that provides support to the economy and is only working towards growth.
Even after proving to be an attraction to traders, the Puerto Rican economy is still behind the rest of America. It is stated as poorer than the poorest US state. The major cause of such poverty is the debt-ridden economy. The Puerto Rican Government debt has only increased in the previous years. Though the government is working towards clearing the debt hole by introducing new liberal policies to attract more investment, it still has a long way to go.
Finding The Broker en Puerto Rico
Once you have assessed your trading plan and built a strategy on how and you want your funds to be invested, the next step is to compare the available brokers. Since you are going to enter a market where you are going to learn a lot of skills, it is better to learn from someone who is knowledgeable. But it becomes quite difficult in case of small market size as that of Puerto Rico. It is crucial to compare your available options and get the best broker amongst them. One can use the following aspects while comparing the brokers in a certain market.
- Trading Platform
Trading platforms are basically electronic trading software through which a trader can access the market from anywhere. There are a number of trading platforms available when a trader is trading in an international financial market. Different trading platforms may also support specific markets like forex, stocks, commodity, etc. So, the trader must compare the Brokers en Puerto Rico on the basis of their access to the trading platforms that the trader wishes to use or that is suitable for the type of security the trader wants to trade-in.
- Trading fees and other commissions- Different brokers charge different commissions and fees. Also, there are certain charges associated with trading as well. These trading fees and charges may include brokerage charges, annual maintenance charges, account opening charges, etc. The trader must ask the broker to be transparent about such fees and charges. This becomes important for the trader before devising the trading plan.
- Regulatory Body- Every financial market has one or more regulatory bodies that govern the functioning of the brokers. When comparing Brokers in Puerto Rico look for the regulatory body that is governing the broker you are planning to select. This is a long shot towards trading in the international market. The presence of a regulatory body confirms the protection and security of your trading funds.
- Performance on the Trading Platforms- How the broker performs at different trading platforms reflects the future of your trading plans. A broker must have relevant experience and a clear and lawful history of trading. His performance may also be reflected in customer feedback. A trader must also work towards gathering as much information as he could while selecting the broker because it is his hard-earned money that he is entrusting the broker.
- International Resources- Broker en Puerto Rico may or may not have resources in the international markets. As a major part of trading in Puerto Rico is done with the US states, brokers sometimes may not have resources in other countries. A trader must try to tap as much information as he can about the resources the broker can provide to him for a smooth and hassle-free trading experience.
- Time Taken For Transactions- Trading involves the movement of funds every now and then, here and there. You have brokerages, trading charges, commissions, investments and disinvestments (buying and selling of securities), and many more. A trader can get these transactions done easily if the broker is efficient enough to get such transactions to be done as quickly as possible. Any delay in these transactions can result in possible losses to the trader.