Business activities and opportunities in Caribbean nations may come as a surprise to those who associate this region with beaches, snorkeling, tropical rain forests and cruise ships.

But high-tech manufacturers, call center operators, pharmaceutical companies and shipping entities are finding multiple advantages to locating operations in this evolving part of the world.

High-tech manufacturing the norm

Puerto Rico has carved out an important niche in the pharmaceutical industry, as well as electronic equipment and component manufacturing. The drug and pharmaceutical industry is Puerto Rico's largest industrial sector thanks to tax programs to promote economic development.

Most recently, the Tax Incentives Act substantially reduced corporate taxes for companies new to Puerto Rico, or existing companies that plan to expand by at least 25 percent.

Sensormatic Electronics Corp., of Puerto Rico, will benefit from the Tax Incentives Act when it hires up to 500 new employees to accommodate planned increased capacity over the next two years. The company is transferring its operations from Moca to the city of Aguadilla.

Sensormatic specializes in electronic products manufacturing.

Pharmacia & Upjohn Caribe Inc. is investing over $162 million in property, machinery, and equipment over the next two years in a plant for producing Nicorette. The company will built its new plant in its Arecibo industrial complex and add a new production line to manufacture Detrol, a drug used for bladder problems.

Costa Rica a beacon for business

High-technology firms have found a home in Costa Rica.

"We are especially impressed with technical skills in Costa Rica," said William Terry Kiger, general manager of Motorola in Costa Rica. "Our quartz crystal blanks are manufactured here within close tolerances, with efficiencies and yields equal to our other worldwide locations."

Manufacturers operating on St. Lucia find that the island nation offers advantages over other eastern Caribbean islands. North American Assemblies, based in Syracuse, N.Y., operates a 30,000 square foot plant for assembling its filters for cable television.

"We chose St. Lucia because of its tax advantages, political stability, speed and ease of moving goods, and the fact it is duty-free for manufacturers," said Roston Taylor, general manager of North American. "Labor is also plentiful and inexpensive."

Taylor said that the company researched a number of islands as well as Central America and chose St. Lucia.

"A big plus was they (workers) speak English," said Taylor.

The operation has annual revenues of $10 million and employs 185 workers.

Can I help you?

Call centers are important to the Dominican Republic, with some 700 workers in the industry at 40 free trade zones (FTZs). Two more FTZs are under construction.

"There is an ample availability of bilingual staff since much of the Dominican population speaks both Spanish and English," said Rafael Vargas, of Grupo Burgos Hainamosa, which promotes investment.

Codetel (a GTE subsidiary) and Tricom (a local joint venture with Motorola) provide state-of-the-art digital switching, fiber-optic cables and satellite capabilities in the Dominican Republic.

Over 750,000 lines, 60 percent of which are digital, ensure delivery of a wide range of high quality reliable services.

Barbados has its share of call centers, data entry and offshore manufacturing operations. Its telecommunications system is modern, featuring fiber optics, ISDN, and other broadband capabilities that provide international service, Internet access, lease circuits and other services.

Tax haven in paradise

Qualifying companies investing in the U.S. Virgin Islands and hiring local labor find generous government tax incentives that eliminate almost all income taxes and local taxes for 10 years or more.

Many take advantage of Foreign Sales Corporation (FSC) programs that encourage the export of U.S. goods and services by allowing a U.S. corporation to reduce federal income taxes on export income.

An FSC must be incorporated outside of the U.S. Customs Zone in a jurisdiction approved by Congress. The U.S. Virgin Islands is one of those zones.

Transducer Technology Inc., which has been in the Virgin Islands for 18 years, expanded its local work force by 35 percent in the first six months of this year. Transducer manufactures products used in the medical and aerospace industries.

"Our biggest asset is our labor force," said Jeffrey Nicholas, general manager of TTI. "Their commitment to TTI's mission of providing the best product on time and all the time is the reason why we continue to run a successful operation here in the U.S. Virgin Islands.

"Another big plus is that we can put ‘Made in the USA' on the products we assemble here."