GUYANA EMBASSY - STATE OF KUWAIT

Investing in Guyana

Block 3, Street 321, Villa 3
Mubarak Abdullah Al Jaber
West Mishref
State of Kuwait
Tel: (965) 2539-4771; (965) 2539-4336
Fax: (965) 2539-3448
Email: Guyanaembassy.kuwait@gmail.com

Posted August 2011 - Back to Embassy page - Arabic version

Regulatory Environment

Like other countries, Guyana has a number of laws, regulations and administrative processes that govern the investment regime (i.e., locating, operating, finance, and import and export of goods).

This section provides an overview of Guyana's regulatory framework, within the sequence of procedures an investor may consider when deciding to locate a business in Guyana. More detailed information and assistance can be obtained from GO-Invest, Ministry of Trade, Industry and Commerce (MinTIC), or other regulatory bodies.

The Government has continued to take steps to improve the regulatory climate, with recent developments including reducing the number of necessary trade licenses, passing a Value-added Tax bill in 2005, the Investment Act of 2004, the Small Business Act of 2004, and a Competition and Fair Trading Bill (due to be passed by May 2006). Furthermore, as part of the recent NCS process, the Government is strengthening regulatory and administrative processes as well as improving the environment for public-private dialogue through the establishment of a National Competitiveness Council.

Investment Framework

With few exceptions (e.g. small and medium scale mining), foreign and domestic investors receive equitable treatment and both have the right to establish, own and operate business enterprises, and to engage in all forms of economic activity.* Guyana offers investors a number of incentives, guaranteed by the law. GO-Invest, a semi-autonomous body under the direct purview of the Office of the President in Guyana, is the primary contact for investors and is mandated to facilitate the investment process for them.

Investment Act 2004
The Investment Act of 2004 is the principal legislation governing investment in Guyana and is intended to play a reassuring role for investors by providing legal protection for investment, increasing the predictability, stability and transparency of the legal regime for investment, promoting the development of international best practices regarding investment, and streamlining the existing procedures for
investment. Specifically, the Act provides assurances that:

* There is no discrimination between foreign and domestic investors
* Investors may invest in all fields of lawful economic activity
* Investments may be made in existing enterprises-both joint ventures and wholly-owned-by domestic or foreign investors
* Private investments are guaranteed by the Government
* Expropriation can only take place as permitted under the laws of Guyana, promulgated on a non-discriminatory basis and providing for fair and prompt compensation
* Proceeds and profits from investments may be freely repatriated out of country and business expenses in foreign currency are permitted. Limitations may be placed on enterprises that are under bankruptcy proceedings, have been declared insolvent, or when the investor has pending criminal proceedings
* Investors can hire foreign personnel and have the right to repatriate their net earnings
* Intellectual and property rights of investors are guaranteed under Guyanese law
* In cases of disputes, mediation is the recommended form of conflict resolution. However, if settlement is not made amicably, the investor may seek international arbitration under the rules of the International Centre for the Settlement of Investment Disputes (ICSID)

* - A few limitations do exist in the mining and finance sectors. In the former, investment in small and medium sized operations is restricted unless a joint partnership exists. In the latter, foreigners must receive approval to obtain loans greater than US$10,000.

Investment Incentives
Guyana offers investors a range of general, special and sector-specific incentives for the agriculture and agribusiness, manufacturing, forestry, mining, tourism, fisheries, housing, ICT, garment and textiles sectors. The majority of investment incentives are in the form of tax incentives (see Taxation section below). Firms interested in finding out which incentives they are entitled to should contact GO-Invest. A summary of Guyana's investment incentives is provided in Table 3.10.

Bilateral Investment Treaties
Guyana has entered into Bilateral Investment Promotion and Protection Agreements with the UK, Germany, the Peoples' Republic of China, and Cuba.

Locating

Guyana offers foreign investors the flexibility and advantage (as the particular situation may warrant) to purchase or lease land. Foreigners are treated the same as domestic investors when attempting to acquire or lease property. The Status of Aliens Act legislates that foreigners be treated the same as Guyanese citizens in the ownership and disposition of all movable and immovable property.

There are four types of land in Guyana: state-owned, government owned, private transported or titled land, and industrial estates. The process for acquiring or leasing land depends on its classification. In most cases, state and government owned lands are leased rather than sold, through an application process that involves the Guyana Lands and Surveys Commission (GLSC), GO-Invest and other regulatory bodies. Private transactions are generally carried out between lawyers for the buyer and seller.

There are two operating government-managed industrial estates in Guyana-Eccles and Coldingen-and others in development, including estates in Lethem and Belvedere that have various levels of infrastructure and services available for investors (see Box 3.4 for details on the specific estates).

Businesses at these locations enjoy favorable terms and conditions, which are available to both local and foreign investors. This includes 99-year lease agreements with the following terms:

* Annual Rent of G$1.00/US$.005/sq. foot
* Concessions on building materials, vehicles, plant and machinery
* The investor is responsible for reimbursing 25 percent of the costs of basic infrastructure, currently ranging between G$153/US$0.76 to G$210/US$1.06 per sq. foot

The allocation of the plots at the industrial estates is based on a variety of criteria, including macroeconomic impact (e.g. export potential, employment generation, import substitution, utilization of local resources), project parameters (e.g. nature and scope of project, level of investment, types of products/services), and the applicant's profile. Applications are filed with MinTIC, with GO-Invest facilitating on behalf of investors. Further sites may be developed on a demand-driven basis.

In addition to the industrial estates, the Government is developing 600,000 acres (250,000 hectares) of Intermediate Savannahs, with very good agricultural potential. It is offering investors access to land under very favorable terms for undertaking specific agricultural related projects. Interested investors should contact GO-Invest to obtain pertinent information.

Environmental Regulations

Any individual engaged in a project or activity that may significantly impact the environment must apply to the Environmental Protection Agency (EPA) for an environmental permit, possibly upon completion of an environmental management plan or environmental impact assessment. Projects requiring a permit include: construction of hotels, guest houses or inns above 10 rooms, hydroelectric projects, construction of roads, harbors and airfields, construction of dams, importation of any waste matter, release or use of genetically modified organisms, harvest and utilization of forest resources and the extraction of mineral resources.

Starting a Business

To start a business in Guyana, investors must comply with the administrative procedures established under the relevant business acts. Compared to a sample of other countries in the region, the procedures and time required to start a business are low compared to the mean, and relatively consistent with the median. Table 3.11 shows data from the World Bank Doing Business Guide 2005. This section provides an overview of the most salient aspects of this process. More details on business start-up are found on GO-Invest's website (http://www.goinvest.gov.gy.)

Forms of Ownership
Forms of business ownership include single ownership (i.e., sole proprietorship), partnership (in any form), and company (incorporated businesses both domestic and foreign). No regulations govern the proportion of ownership by partners or joint ventures in a partnership. Rather, the individual concerned has the right to choose whether to invest alone or to have partners, and to determine the form of that relationship. With regards to a private incorporated company, there must be at least 1 and no more than 20 shareholders. There are no restrictions on the nationality of shareholders. The company's capital structure may comprise more than one class of shares including redeemable preference shares, with such conditions as the articles may provide. Shares in a company are without nominal or par value.

The Business Names (Registration) Act and the Partnership Act are the governing regulatory documents for single ownerships, partnerships, and companies. The Companies Act (9/91) governs the registration of an incorporated business. Though three different acts address the different business types, the government office for business registration of any kind is the Deeds Registry in Georgetown.

Incorporation, Registration and Fees
The process for incorporating a business is relatively straightforward, and takes, on average, approximately 8 days. Incorporated or foreign firms may wish to engage a competent lawyer to facilitate the process and save time. Registering a foreign company requires additional steps. Appendix 3 provides a summary of the information and documents required to incorporate and register a foreign or *external* company in Guyana, as well the pertinent fees.

Exit
An investor (foreign or domestic) is free to exit from a venture in accordance with the law. Unlike other Caribbean jurisdictions, the law relating to the liquidation of companies is embodied in the Companies Act. Under this Act, a company may be wound up either by an order of the Court or voluntarily. In bankruptcy proceedings, additional obligations may be imposed on directors, managers or principal officers of an external company who reside in Guyana.

Taxation
All businesses operating in Guyana-except for those benefiting from tax-related investment incentives-are liable to taxation. As elsewhere, taxes generally fall into two broad categories, direct and indirect. Direct taxes include income tax and corporation tax, while indirect taxes include property tax, capital gains tax, consumption tax (to be replaced with a VAT) and a number of product and service related taxes (e.g. excise taxes, travel taxes, hotel accommodation tax, entertainment tax, telephone tax, etc), many of which will also be replaced by the VAT. Table 3.12 provides a summary of the taxes most likely to impact investors.

Fiscal Enactments Act
The Fiscal Enactments (Amendment) (No. 2) Act 2003 provides income and corporation tax relief to firms that meet the following criteria:

1. Activities that demonstrably create new employment in one of the following regions: Region 1: Barima-Waini; Region 7: Cuyuni-Mazaruni; Region 9: Upper Takatu-Upper Essequibo; and Region 10: Upper Demerara-Upper Berbice

2. New economic activity in one of the following fields: Non-traditional agro processing (excluding sugar refining, rice milling and chicken farming); information and communications technology (excluding retail and distribution); petroleum exploration, extraction, or refining; mineral exploration, extraction or refining; and tourist or eco-tourist hotels

Income Tax (In the Aid of Industry) Act
Under the Act's provisions, both domestic and foreign investors can benefit from:

* Initial allowance of 10 percent of the cost of constructing a building or structure for the purpose of operating an eligible activity in the year in which the capital expenditure is incurred. Thereafter, a deduction or allowance of 5 percent per annum is permitted
* An initial depreciation allowance of 40 percent on the cost of machinery. The cost of altering an existing building to accommodate the new machinery may be added to the cost of machinery
* For extraction industries (other than gold, diamonds and petroleum), an initial allowance of 10 percent on the construction of works likely to have little or no value when the source is no longer producing. Thereafter an annual allowance is permitted
* Tax allowances on the purchase of patent rights
* Deferred income recognition on net proceeds from the sale of patent rights by residents, whereby one-sixth of the proceeds may be recognized each year for six years.
* Tax deductions for scientific research expenses
* An initial allowance for capital expenditures on scientific research of 60 percent of the expenditure and an annual allowance equal to 10 percent of the expenditure for each of the next 4 years
* Subject to conditions, an annual allowance equal to 10 percent of the cost of constructing housing for workers

Double Taxation Treaties
Double taxation treaties currently exist with the United Kingdom, Canada, and CARICOM.

Accounting Requirements
Guyana largely follows British conventions and practice in the reporting of accounting information and, more recently, has adopted a number of international accounting standards. Inflation accounting is not allowed. The revaluation of fixed assets, however, is permissible. The Companies Act 1991 stipulates that external reports ought to comply with international accounting standards. Additionally, qualifications of the reports have to be issued by an accountant/accounting firm that is a member of the Institute of Chartered Accountants of Guyana. It is mandatory that public companies publish annual accounts.

All companies are obliged by the Income Tax Act and the Companies Act to maintain adequate accounting records that reflect a true and fair view of their operations. Companies are also obligated to file tax returns annually. Generally, accounting records are kept manually but increasingly computerized record keeping is being adopted.

The Institute of Chartered Accountants of Guyana is considered the local accounting body responsible for establishing auditing requirements for companies registered in Guyana.

Exchanging and Remitting Funds

The Guyana dollar is fully convertible. There are no foreign-exchange controls in place, and the foreign currency can typically be acquired at prevailing market rates in addition to a normal transaction fee. Funds can be wired electronically with ease.

Investors may open accounts in the currency of Guyana (the Guyana Dollar) and in foreign convertible currency with any corporate body licensed to carry on banking activity in Guyana under the Banking Act. There are no restrictions on the repatriation of capital and investment income. Residents and non-residents alike have unlimited access to the foreign exchange market to repatriate funds.

Investment Protection and Standards of Treatment

Treatment of Investors
Guyana's legal framework provides foreign and domestic investors with equal treatment. Foreign and domestic firms have the right to establish and own business enterprises and engage in all forms of remunerative activity. In some industries, licenses are required for foreign and domestic investors to operate a business. (e.g., mining, telecommunications, forestry, banking, and environmental sectors). Foreign investors have equal access to privatization opportunities. For some larger operations, foreign investment is openly preferred. The Investment Act reinforces the Government's commitment to neither discriminate between foreign and domestic investors, nor among foreign investors from different countries.

Expropriation
Guyana's Investment Act of 2004 provides that the Government will protect investments and the property of investors in accordance with the laws of Guyana. The Government shall not compulsorily acquire or take the possession of any investment enterprise, or any asset of an investor, except:

* For a purpose which is in accordance with the laws of Guyana
* On a non-discriminatory basis
* In accordance with the procedures provided by law
* There is prompt payment of adequate compensation together with interest calculated from the date of acquisition or taking possession of the investment enterprise or asset to the date of payment at the commercial bank rate on loans to the corporate sector
* There is a right of access to the High Court to dispute the respective level of compensation

These expropriation clauses are in conformity with the principles of international law, due process, transparency and compensation.

Intellectual Property Rights
Guyana adopted British law on patents and copyrights upon independence. Current legislation covers:

* The Copyright Act, 1956 (UK) - Prevents the unlawful copying of physical material existing in the field of literature and the arts. Its object is to protect the writer and artist from the unlawful reproduction of his/her material. The Copyright Act is concerned only with the copying of physical material and not with the reproduction of ideas and it does not give a monopoly to any particular form of words or design.
* The Patents and Designs Act, Cap. 90:03, 1937 - Protects holders with monopoly of an invention or design for a period of time.
* The Trademarks Act, Cap. 90:01, 1953 - Protects rights of trademark holders. Trademarks are defined as a mark used or proposed to be used in relation to goods for the purpose of indicating a connection in the course of trade between the goods and some person having the right either as proprietor or as registered user to use that mark.
* Geographic Indications Act - This act aims to protect geographical indications which are signs used on goods that have a specific geographical origin. It was recently passed by Parliament, and is only pending the President's signature to be formally enacted.

The Deeds Registry, under the Ministry of Legal Affairs, has direct responsibility for the implementation of Guyana's intellectual property legislation. The Registry is responsible for processing applications, as well as other administrative work related to intellectual property protection. Guyana is a member of the World Intellectual Property Organization (WIPO) and is a signatory to the Paris Convention for the Protection of Industrial Property (Stockholm Text), and the Berne Convention for the Protection of Literary and Artistic Works (Paris Text).

In addition to enacting new copyright law, Guyana is seeking to improve its intellectual property enforcement through a review of the current legal framework. These efforts have been promoted with technical assistance from WIPO, the IDB, and the Commonwealth. Guyana is in the process of updating its legislation on intellectual property rights to comply with the provisions of the TRIPS Agreement.

Dispute Resolution
Under the Guyanese legal system, and in particular the Investment Act of 2004, parties to a dispute are encouraged to first seek to settle their disputes through either consultation or mediation. Guyana is a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. International arbitration decisions are enforceable under Guyana's (then British Guiana) Arbitration Act of 1931. The country is also a member of the International Centre for the Settlement of Investment Disputes (ICSID). If parties to the dispute fail to resolve the matter, they may: * Submit their dispute to arbitration under the Arbitration Act
* Invoke the jurisdiction of the competent courts in Guyana
* Adopt such other procedures provided for in the articles of association, or other constituent document of the investment enterprise
* Submit their dispute to the International Centre for the Settlement of Investment Disputes (ICSID) of which Guyana is a member

The Government of Guyana is taking steps to improve dispute resolution mechanisms. Guyana has recently moved towards establishing a Commercial Court, and is expanding the Alternative Dispute Resolution Mechanism.

Trade Procedures

The Government continues to take steps to improve the ease of trade, including a reduction in products requiring licenses and upgrading customs administration software. Trade procedures fall under the auspices of the Guyana Revenue Authority (GRA) of the Ministry of Finance, and MinTIC. Currently, there is no formal appeals process for differences of opinion that arise at any step of the way in the import or export process. However, a Customs Tariff Tribunal is being established that will provide an appeals process to expeditiously decide on complaints.

Registration
All importers and exporters, regardless of their nationality, are required to register and obtain a customs registration number from the GRA's Custom and Trade Administration department. The New GMC has a one-stop brokerage desk that prepares export documents.

Import Procedures
Since the early 1990s, there has been a significant reduction in import restrictions, enabling the ready availability of machinery, fertilizer and pesticides, among other things. While the number of products requiring import licenses has been greatly reduced, importers need to ascertain from MinTIC whether they need a license. Information can be obtained from the MinTIC website: www.mintic.gov.gy/licences.html.

Import Licenses
Import licenses are required and granted by the MinTIC for a very limited category of items. These include medicinal drugs; fresh, frozen and chilled meat, fresh fruits, beet sugar, wheaten flour, rice, cane sugar, organic and inorganic fertilizers, petroleum and petroleum by-products, beauty and makeup preparations, aircraft, helicopters, spacecraft including satellites, and military weapons (e.g., revolvers, pistols, bombs, grenades, torpedoes, bayonets, lances and similar arms). The licensing process is normally completed within 48 hours.

The importation of livestock/animals and plant materials into Guyana, including domestic pets, is subject to an import permit from the Animal Services Division (animals) or the Plant Quarantine Section (plant materials) of the Ministry of Agriculture. The permit specifies the conditions that must be met in the exporting country before importation to Guyana is allowed. Animals from countries affected by rabies must be quarantined for a period of 90 days before being issued a health certificate and cleared for entry.

The importation of fresh/raw meats is also subject to the Import Permit procedure. Upon arrival at the Port of Entry in Guyana, it must be inspected by qualified veterinary doctors from both the Ministry of Agriculture and the veterinary Public Health Services of the Ministry of Health.

Customs Clearance - Imports
Importers are allowed to act on their own behalf to clear goods, although competent customs brokers are recommended to save time and money. Customs must be provided with a copy of the clearance form upon importation, together with supporting documents, such as an invoice from the supplier, a bill of lading and/or a license and, when requested, a certificate of origin. Valuation is based on invoice or purchase prices. Guyana is a signatory to the WTO Customs Valuation Agreement. Taxes must be paid before delivery of the goods. Customs inspections are carried out at the port of entry before the goods are cleared for delivery. Clearance times range, but normally fall between 2 and 3.5 days.

Exporting procedures

Export Licenses
Export Licenses are required for the following items: poultry feed, rice bran, rice chips, rice dust, rice stock feed, wheat flour, wheat bran, wheat middlings/wheat screenings, beet sugar and cane sugar in solid form, fertilizers, hides and skins, feathers, bird skins with feathers, feathers prepared, ornamental feathers and other articles of feather, gold, jewelry of precious metal or rolled precious metal, copper waste and scrap, arms and ammunition. Exporters wishing to export goods out of Guyana need to ascertain from the MinTIC whether they need a license. Information can be obtained from the MinTIC website: www.mintic.gov.gy/licences.html .

Customs Clearance - Export
Exporters are allowed to act on their own behalf to clear goods, although competent customs brokers are recommended to save time and money. Most exporters will seek permission to load on-site, i.e., at their premise, which means that a Customs Officer will come to the exporter's place of work to inspect the goods during the loading of the container. At least two-hours' notice is required to schedule an on-site loading inspection. After the inspection, the container is sealed and a customs form returned to the broker/exporter to deliver along with the shipment to the shipping company.


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