Wednesday, December 6, 2017
By NEIL HARTNELL
Tribune Business Editor
THE Commercial Enterprises Bill should be made more "flexible" by including "attributes" other than direct capital outlay in the $250,000 investment calculation, a businessman urged yesterday.
Mick Holding, the Grand Bahama Chamber of Commerce's president, told Tribune Business that the minimum investment threshold should be "less arbitrary", with investors given 'credits' towards that benchmark for other aspects such as job creation and bringing new technologies/skills to the Bahamas.Arguing that direct capital outlay should not be the only criteria used to determine whether qualifying start-ups have met the Bill's criteria, Mr Holding welcomed the legislation as a further potential boost for Grand Bahama's economy. "I'd like it to not solely be direct capital investment," he suggested of the $250,000 threshold, "but also take into account job creation. Every job created would be worth 'x' towards that $250,000, and there's also credit given to other things.
"If the investment fits into a particular business we are seeking to attract that gets entered as another credit. If we're trying to attract a certain industry, and a business invests $100,000 but creates 12 jobs and brings new technology to the island, they should get a credit for that.
"It doesn't have to be new technology that they bring, but a new skill or trade that doesn't exist here and be of benefit to the Bahamas."
Essentially, Mr Holding's argument is that the Government should take a more holistic approach in assessing a company's overall economic impact, rather than just its capital investment spend, when determining whether it has met the Bill's minimum $250,000 threshold.
Given that the Commercial Enterprises Bill has now been passed by both parliamentary chambers, and is now making its way to the Governor-General for assent and passage into law, it is unlikely that Mr Holding's suggestions will be incorporated.
Still, he reiterated that "rather than leave it totally arbitrary" the Bill should be more flexible on its $250,000 'investment' definition, adding: "It should recognise other attributes besides capital investment."
Mr Holding told Tribune Business that the Commercial Enterprises Bill would "go hand in hand" with the Government's plans to make Grand Bahama an offshore 'technology hub' and the recent associated Summit, plus its impending repeal of the Grand Bahama (Port Area) Investment Incentives Act.
Suggesting that the 'technology hub' plans had probably helped drive the Commercial Enterprises Bill's creation, the GB Chamber chief said the latter would tackle a long-standing problem he had identified.
"I've argued for some time that the $500,000 capital requirement for foreign investors is somewhat arbitrary," he told this newspaper. "It's been reduced in this case to $250,000, but I always thought the absolute requirement for a $500,000 investment was inflexible and didn't take into account other important factors.
"You can have a new technology business that requires just a half dozen chairs and desks, and half-a-dozen computers. That doesn't stack up to a $500,000 investment."
A similar point was made by Brent Symonette, minister of financial services, trade and industry and Immigration, who explained that the lower $250,000 investment threshold was selected because some of the targeted industries - call centres, maritime brokerage and technology start-ups - did not require significant upfront capital.
Mr Holding, meanwhile, also supported the certainty that would be created by the Commercial Enterprises Bill's 'fast track' work permit process, which mandates that the Immigration Department approve permits for senior executives of targeted industries within 14 days.
"I've seen too many cases in the past where businesses have come to the Bahamas, but they find it very difficult to start up operations because they can't get work permits for senior executives," he told Tribune Business. "The timeline is important so that when people come to invest they can say: 'I'm good to go'. Fourteen days is reasonable because Immigration can still say 'no'."
The Bill provides for work permits to be issued for up to three years, and renewed for a similar term, with the Government arguing that six years should be sufficient for companies to train up Bahamian understudies to replace the expatriates.
Mr Holding agreed that the process "can't be carte blanche", with companies obtaining as many work permits as they liked, and backed 'knowledge transfer' and training for Bahamians.
Yet, describing the Bill as "a boost", he added: "I think it will dovetail in quite nicely. Having launched the Grand Bahama Technology Summit, and invited companies to come here and start businesses here, to make some steps to say we've made it easier with this Commercial Enterprises Bill sends a strong message to them I would have thought."
Mr Holding added that the Commercial Enterprises Bill would also complement the Government's Grand Bahama (Port Area) Extension of Tax Exemptions Bill, which will provide a 'blanket' 20-year renewal of expired tax exemptions for Freeport's licensees and homeowners, not just the Port Authority and Hutchison Whampoa.
"We at the Chamber of Commerce had lobbied for that for most of 2017, so we were very happy to see that happen," he told Tribune Business of the new legislation. "It gives 20 years of certainty to any business looking to invest in Freeport with these tax concessions.
"Prior to that, where you were left to apply and there was uncertainty as to the length of concessions, that meant businesses wanting to invest didn't know what their costs and liabilities were going to be.
"It's all about creating an environment of certainty. The work permits work into that as well. If licensees know they have the tax concessions, they can plan on 20 years, and plan on having the work permits for three years. It creates certainty."