Parliament on Wednesday referred the Investment Bill (No. 17 of 2003) and the Small Business Bill (No. 18 of 2003) to one Select Committee for consideration after three hours of debate.

Five bills were dispatched to select committees at Wednesday’s sitting.

Areas of investment spoken of in the bill are agriculture, fisheries, forestry, manufacturing, energy, mineral extraction, handicraft, communications and transport, construction, tourism, trade and professional services except for sectors which may be determined by the Minister and “which shall be subject to affirmative resolution of the National Assembly.”

With the aim of attracting and facilitating investment while stimulating the socio-economic development of Guyana, the bill provides a legal framework for investment and seeks to increase the predictability, stability and transparency of the legal regime for investment. The legislation also eyes the promotion of international best practices for investment and the provision of a framework for fiscal incentives for investors and direct investment.

Clause 16 states that notwithstanding the provisions of the Trade Act, the Government shall not intervene in the management of investment enterprises, nor shall the Government impose conditions of sale, pricing or distribution on the product of those enterprises, except in the pricing of services provided by utilities. Government, according to the Bill, shall guarantee the right of the investors and investment enterprises to import and export all or any products free of restriction or limitation, except for products which are prohibited by law, or products which may be determined by the National Assembly.

Clause 23 says that under the Banking Act, investors may open accounts in local and foreign convertible currency with any corporate body licensed to bank in Guyana.

Clause 18 states that Government will guarantee the rights of investors to freely determine the distribution of all profits and dividends, and the right of investors to receive their total share in such proceeds providing the corresponding tax obligations are satisfied by the relevant parties.

Subject to the payment of all taxes due, investors may:

1. Freely repatriate their earnings, dividends and capital from their investment enterprises.
2. Remit the proceeds in the event of sale or liquidation of an enterprise of interest.
3. Pay the interest on international loans.
4. Pay for imports.
5. Pay fees for trademarks, royalties, management and other fees.
6. Pay all licensing fees for franchising agreements to their home countries through a body licensed to carry out banking business in Guyana.

The Minister of Tourism, Industry and Commerce, after consultation with the Investment Promotion Council (IPC), shall establish three investment priorities namely: specific industries or sectors that the Government considers may make a contribution to the socio-economic development of Guyana; specific geographic areas of Guyana that the Government considers are in urgent need of additional investment for development; measurable project characteristics such as export orientation, labour absorption, new and advanced product or process technology that the Government considers will make a significant contribution to Guyana’s socio-economic development.

The IPC will at least once annually review and recommend to the Government alterations to the priority list, annually recommend alterations to the regime of fiscal incentives established for investment, including incentives for tariffs and taxes, import duties and export-oriented enterprises and to recommend incentives to enterprises that are not on the priority list.

Investors shall give priority to citizens of Guyana in recruiting and hiring their employees, but the investment enterprises, the bill states, have the right to employ skilled and expert foreign personnel when necessary, with the approval of the competent authority of the Government in compliance with the Immigration Act and the Labour Act. These investors also have an obligation to upgrade the skills of their employees through training within Guyana or elsewhere.

The bill also says that the Government shall facilitate the entry into, accommodation in and departure from Guyana, the investors, their foreign personnel and their immediate family members in accordance with the Immigration Act, though those persons are subject to and must comply with the country’s laws. They will also be subject to the payment of taxes.

Among the fields of activity closed to investors are where the investment is prejudicial to national security or detrimental to the natural environment, public health or national culture, or where it contravenes the Laws of Guyana.

Investors entering a joint venture may contribute any amount of the total equity investment in that venture, the bill states. In the case of a foreign investor involved in the venture, the contribution of the venture’s foreign investor or investors shall be converted into Guyana dollars in accordance with the Laws of Guyana for the purpose of establishing value at the rate offered by the Bank of Guyana.

The incorporation, registration or establishment of an investment enterprise must be in accordance with the Companies Act of 1991, the Partnership Act, the Business Names Registration or the Cooperative Societies Act.

According to Clause 12 (1), although an investment may be owned either by local or foreign investors, there is no requirement that the local investor shall own any shares in the enterprise. Although this is so, Government may reserve the right to own some or all of the shares of the investment enterprise operating in industries as may be determined by the Minister, which will also be subject to an affirmative Parliamentary resolution.

The Government, according to Clause 13 of the Bill, shall not compulsorily take possession of any investment or enterprise or any asset of an investor, except for where there is prompt payment of adequate compensation, with interest, from the date of acquisition or taking possession of the enterprise or asset to the date of payment; or for a purpose which accords with the laws of Guyana or on a non-discriminatory basis.

Government can also take such possession of the enterprise if there is a right of access to the High Court by any person claiming such compensation for the determination of any interest or right over the investment enterprise.

The Bill states that subject to the laws in force, investors may purchase, or lease land in Guyana, and dispose of, or transfer their interests in, or rights over the land.

Small businesses
Meanwhile, a small business desirous of becoming an approved small business under the Small Business Act may make an application to the small business council by providing the following: a certificate of incorporation under the companies Act 1991, or registration under the business names (Registration) Act, or certificate of partnership under the partnership Act or its registration as a cooperative under the Cooperative Societies Act, or a declaration that the individual or group of individuals is engaged in a small business.

In addition, a certificate of tax clearance for the previous year and a certificate of compliance from the National Insurance Scheme would be required. Based on a recommendation from the Council a declaration by the Minister, that a business is an “approved small business” for purposes of this Act shall be required in order to obtain any eligible benefits specific to the small business sector.

Additionally under this Act a small business is considered as one that is owned by a person or persons not trading under the companies Act or in partnership. It could also be a registered cooperative society under the cooperative societies act, owned and controlled by those persons who hold the majority share-holding or controlling interests in the business and is not a subsidiary or affiliate of another company and satisfies at least two of the following conditions; employs not more than 25 persons, has gross annual revenues of not more than sixty million dollars, has total business assets of not more than $20M.

Further, under this Act the minister will establish a small business development fund. This fund will seek to provide support and access to financing for small businesses, provide non-financial services and assistance to help small businesses, improve their productivity and competitiveness, provide institutional support for organisations representing, promoting, supporting and strengthening small businesses.

The resources of the small business development fund will consist of monies appropriated by parliament for the benefit of the small business sector in furtherance of the objectives of this Act.