The answer is “probably not” from the mere act of selling, distributing or servicing products to customers in Puerto Rico.
Puerto Rico Law 75, Sec. 278(a), defines a dealer as the person in charge “in Puerto Rico” of the distribution of a given merchandise or service. In A. M. Capen’s v. American Trading, 202 F. 3d 469 (1st Cir. 2000), the First Circuit, after applying Puerto Rico law, held that the “in Puerto Rico” requirement of Law 75 meant that the dealer must be located in, be a resident of or be authorized to do business in Puerto Rico. There, a New Jersey corporation with its principal place of business in New Jersey claimed Law 75 protection from the termination of an exclusivity contract. The distributor alleged that taking orders from Puerto Rican customers, selling into the territory and having a sales agent make occasional visits to Puerto Rico qualified the distributor for Law 75 protection. However, the New Jersey distributor did not advertise in Puerto Rico, nor did it maintain a warehouse, showroom, assets, inventory, employees, office, address or telephone number in Puerto Rico. On these facts, the appellate court held that the New Jersey distributor did not operate in Puerto Rico to qualify for protection under Law 75 and reversed the finding of liability under Law 75.
A stateside or foreign distributor would not qualify for Law 75 protection merely because it has a contract with the principal that requires the sale and distribution of products in Puerto Rico. Occasional visits by a sales agent, standing alone, would not tilt the balance to qualify as a dealer. By the same token, the status of the distributor as a foreign or stateside corporation would not automatically exclude the application of Law 75, though the statute clearly applies only to entities “in Puerto Rico”. Depending on the circumstances, it appears from Capen's that a stateside or foreign corporation could qualify for protection if it becomes registered to do business in Puerto Rico or performs substantial operations in Puerto Rico with respect to the distribution relationship.
Parties could potentially minimize (but not altogether exclude Law 75 exposure) by: 1) entering into a Capen’s style distribution relationship with a stateside or foreign corporation that does not operate within and is not registered to do business in Puerto Rico, and 2) enter into a “limited functions” purchase and sale type of agreement.
