While welcoming the Commercial Enterprise Bill, as attracting Foreign Direct Investment to develop certain sectors of the economy is essential to growth and development, The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) says there needs to be balance in the investment with local businesses.
“Attracting foreign investment and the development of certain sectors in the economy is essential to the growth and development of the economy and is fully supported by the BCCEC.
“The Bill can be seen as an interim solution for businesses in certain industries with a foreign ownership component to navigate the process for obtaining Investments Board approvals and work permits.
“The BCCEC applauds the creation of a Commercial Enterprises Facilitation Unit and hopes that it will include representatives from the private sector,” the statement said.
In a press release the BCCEC, responding to the bill, said there are some anomalies to the newly tabled bill.
“The BCCEC wishes the attraction of foreign investment to be balanced, with the support of local businesses, particularly small and medium sized enterprises which are the backbone of the local economy.
“Wholly owned Bahamian businesses are not currently required to apply for Investments Board (the “Board”) approval. In order to take advantage of benefits contemplated by the Bill, a newly established wholly Bahamian owned business would be required to apply for approval from the Board.
“Accordingly, in parallel with the initiatives outlined in the Bill (subject to the amendments that have been provided) which are aimed largely at foreign investors, incentivizing Bahamian businesses in these sectors and addressing the ease of doing business is also of paramount importance for the growth and diversification of the economy,” the release said.
The statement outlined various disadvantages that the bill may impose on local businesses, in particular, taxes that local businesses must pay.
“Bahamian owned business in certain sectors such as mutual fund administration, wealth management, boutique health facilities will be disadvantaged and will not be able to compete.
“For example, a foreign owned business, which is non-resident for Exchange Control purposes pays a nominal business license tax whilst a Bahamian owned business serving the same non-resident clients must pay business license tax on their gross turnover whether or not they make a profit,” according to the statement.
The statement specified areas of the bill that needed further clarification including:
“A number of the industries listed in the Schedule are too broadly referred to, such as . wealth management, international trade and boutique health facilities. For example, if one were to invest $250, 000 and set up a doctor’s office with 2 physicians is that a “boutique health facility”?
“For a company applying for a Specified Commercial Enterprises Certificate (SCEC) that is a services enterprise where no significant capital is required, what would constitute an investment of the minimum of $250k?
“If the Specified Commercial Enterprises Certificate (SCEC) is only valid for one (1) year, why grant a work permit for three (3) years as in section 8 (4), with an option to renew for an additional three (3) years? There should be consistency in the term and tenure between the granting of a certificate and work permits.
“There appears to be conflicting details with sections 8 (1), (2) and (3). Should the approval of a work permit accompany the application for the SCEC, since the SCEC process is a vehicle for attracting such companies and individuals?” the organization asked..
It suggested that the expediency expected to consider and approve work permits for persons covered under the SCEC should be applied to other government agencies to help in improving the ease of doing business.
The Commercial Enterprise Bill was passed in the House of Assembly on Wednesday and is expected to be debated in the Senate.
