How Many Business Start-Ups in Puerto Rico?

Two spikes in business applications stand out:

• About a 225% increase from 487 applications in October of 2017 to 1,591 in October of 2018.
• About a 150% increase from 944 in April 2020 to 2,327 in April 2021.

Please note that these numbers are seasonally adjusted and may later change because of seasonal revisions.

Many conditions can affect business applications. Events like Hurricanes Irma and Maria, which hit Puerto Rico in September 2017, and the global COVID-19 pandemic that began in 2020 can have significant economic impacts on business creation.

Several Census Bureau data products capture such economic impacts.

The Census Bureau in April 2020 launched the Small Business Pulse Survey to track changing business conditions and challenges small businesses faced during the coronavirus pandemic.

In July 2020, America Counts published an article identifying 2.4 million U.S. businesses in areas most vulnerable to hurricanes.

In May 2024, the Census Bureau released additional data from the 2022 Annual Capital Expenditures Survey about the impact of the Coronavirus on U.S. businesses and if and when U.S. businesses returned to normal levels of operation.

BFS is one of the Census Bureau’s newest data products. It began as an experimental release in February of 2018 and became a standard product in December 2021. Monthly Puerto Rico Business Applications are not part of the standard BFS but are released at the same time.

BFS tracks Employer Identification Number (EIN) applications filed in the continental United States and Puerto Rico. Applying for an EIN is often one of the first steps to opening a business, enabling business owners to open a business banking account and hire employees.

Keep in mind that someone might apply for an EIN to start a business but never actually open it or, as in the case of a sole proprietorship, never hire any employees.

Given the high frequency at which applications are reported and measured, BFS data allow policymakers, analysts and researchers to monitor the state of entrepreneurial activity in the continental United States and Puerto Rico, including the impact of:

• Business cycles on entrepreneurship.
• Regional economic development policies on new business formation.
• State tax policies and regulations on business initiation and the formation of new industrial clusters.

U.S. BFS releases contain four Business Application Series and eight Business Formation Series.

The Puerto Rico release only contains data for the four Business Application Series, including:

• Business Applications (BA): The core business applications series that includes all EIN applications with some exceptions.
• High-Propensity Business Applications (HBA): A subset of BA that contains all applications with a high propensity of becoming a business with a payroll, based on various factors. An application is classified as high-propensity when it indicates business activity in specific North American Industry Classification (NAICS) sectors; the intention of hiring employees; a planned date to start paying wages to employees; or that the business is part of a corporation.
• Business Applications with Planned Wages (WBA): A subset of HBA that contains all applications that indicate a planned start date for paying wages.
• Business Applications from Corporations (CBA): A subset of HBA that contains all applications filed by a corporation or personal service corporation.

The next set of BFS data for Puerto Rico is scheduled for release Sept. 12, at 10 a.m. EST.