Mixing Business With Fun: Time To Invest In The Caribbean

By Dr. Leonard Madu
Diaspora News | 7 May 2013 Last updated at 12:52 CET

The Caribbean has always been associated with fun, beaches and carnivals. But it is much more than that. It is not just a fun destination, but a vibrant business destination.

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The $20 billion tourist industry plays a big role in the Caribbean economy, but business travelers are also drawn by off shore finance and banking interests, pharmaceuticals and energy.

The Caribbean is the third largest market for U.S. Exports in Latin America, behind Mexico and Brazil. Despite the upturn in the world economy, the Caribbean economies have proved resilient and expanded. The unprecedented infusion of Chinese funds have bolstered the Caribbean economies tremendously.

Economically, Trinidad and Tobago is head above all members of the 15 nation CARICOM group because it has the most advanced and diversified production structure in the region. It has a heavy industrial sector-machinery, steel, oil refining, methanol, etc and a light manufacturing sector-glass, batteries, air conditioning equipment. Currently, it is ranked the number one single site exporter of ammonia and methanol in the world.

The Jamaican economy is dependent on services which account for nearly 65% of the GDP. Most foreign exchange is derived from tourism, remittances from abroad and bauxite/alumina. Remittances from the diaspora account for about 15% of the GDP.

In Belize, no sector of the economy is closed to foreign investors, but special permits and licenses are required for activities mostly reserved for Belize citizens-internal transportation, sugar cane cultivation, accounting and merchandising-may not be granted to foreigners.

The government also sells citizenship to those willing to pay from $35, 000 to $50, 000 for the honor. Priority areas of investment are agro-industries, food processing, tourism aquaculture and horticulture, light manufacturing and assembly plants.

With a population of about 60, 000 and a GDP of $661 million, St. Kitts and Nevis does not have a personal income tax. With one exception, foreign investments are not subject to any restrictions and foreign investors receive national treatment.

The only restriction is to obtain an Alien Landholders License for foreign investors seeking to purchase property for residential or commercial purposes. Qualified companies enjoy full exemptions from taxes on corporate profits for up to 15 years.

Priority sectors are tourism, financial services, information technology and agriculture.

Haiti continues to suffer from lack of investments, partly because of limited infrastructure and insecurity. The apparel sector accounts for 90% of Haitian exports and nearly one tenth of the GDP. Remittances from the diaspora are the primary source of foreign exchange and accounts for 20% of the GDP.

And more than twice the earnings from exports. The new government has granted important concessions to new industries not competing with local production. Companies that locate outside metro Port Au Prince will receive 100% tax exemption for 5-15 years. Key sectors for investment include tourism, agribusiness, apparel, etc.

St Lucia has significantly diversified its economic base in the last decade, by creating a light manufacturing base that includes metal sheeting, corrugated cardboard cartons, sporting goods and apparel.

It has no income tax, no inheritance tax, no property tax and no capital gains tax. Investment sectors include manufacturing, tourism, international financial services, information and communication technology and agro processing.

Barbados, Bahamas, Dominica, Antigua and Barbuda, Grenada and St, Vincent and the Grenadines have investment sectors based on financial services, tourism, information technology and agriculture.

Which countries are the best and easiest to invest in? According to the Wold Bank’s Doing Business 2012, ten CARICOM countries top the list of the best places to do business in the Caribbean. These are in descending order-St. Lucia, Antigua and Barbuda, Dominica, Trinidad and Tobago, St. Vincent and the Grenadines, Bahamas, Barbados, Jamaica, St. Kitts and Nevis and Belize.

According to the report, Trinidad and Tobago top the list in protecting investors, Jamaica is tops in starting a business, and St. Lucia is number one over all in doing business. Haiti was rated the worst among CARICOM countries.

The criteria used in choosing these countries include, ease of starting a business, steady electricity, protecting investors, paying taxes, resolving insolvency, dealing with construction permits, employing workers, getting credit, registering property, enforcing contracts and trading across borders.

As an exporter, what kinds of goods and products should I export? Household consumer goods, building materials, computers, cosmetics, food processing and packaging equipments, drugs and pharmaceuticals, automotive parts and services and telecommunication equipments and services.

What are the language problems to be encountered?. Apart from Haiti and Suriname, all the CARICAM countries are English speaking.

African Caribbean Institute and allied organizations have been partnering Caribbean businesses with those in the United States and Africa and educating business persons on how to do business in the Caribbean.

Editor’s Note:
Dr. Leonard Madu is President of the
African Caribbean Institute and Chamber of Commerce.
He is also a Fox TV analyst and writes from
Nashville, Tennessee.

 

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New study: Caribbean businesses view little prosperity on horizon

Jamaica and Barbados report lowest confidence gains in 2013

Story Created: Apr 30, 2013 at 10:13 PM ECT Story Updated: Apr 30, 2013 at 10:13 PM ECT
This article originally published in the Trinidad Express Newspapers 

j0407067Confidence is low among Caribbean businesses, with only the largest companies reporting signs of an upward swing in prospects for the future, according to new research.

The Global Economic Conditions Survey from ACCA (Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA), which gauges the views of finance professionals across the world, revealed that the Caribbean’s business community had little to feel good about in first quarter of 2013.

The global survey of 2,000 finance professionals working in businesses of all sizes showed that in the region just 23 per cent said they were more confident about the prospects of their organisations, while 31 per cent reported a loss of confidence.

Emmanouil Schizas, Senior Economic Analyst at ACCA, said: “Globally, finance teams, who have their fingers on the pulse of business, have reported glimmers of hope for the future. The Caribbean region, however, while still reporting confidence gains, has a more subdued outlook…
“The Caribbean seems to be going through its own credit crunch with pressure on cash-flow and new orders combining with a continued lack of growth capital. While there are some signs of hope amongst businesses, the situation remains volatile.”

Head of ACCA Caribbean, Brenda Lee Tang said: “There were, of course, variations in how finance professionals in the region reported business confidence. Professionals in Jamaica and Barbados were the least likely in the region to share in the buoyant global mood in early 2013.
“However, it is not all bad news. Business opportunities have generally been on an upward trajectory for the last year and a half, and grew strongly in early 2013. FX volatility and inflation have fallen for the last six months, after peaking in Q3 2012, while reported investment opportunities surged after falling for nine months straight. As a result, and although a good deal of dynamism was lost in Q1 2013, business capacity building has strengthened.”

The global outlook
The survey found that globally, nearly one quarter (24 per cent) of respondents reported they were more confident about the prospects of their organisations than three months earlier, up from 19 per cent in late 2012, while 37 per cent reported a loss of confidence, down from 43 per cent. The highest confidence levels were in the Middle East.
Over two fifths (43 per cent) of respondents in early 2013 believed the global economy was improving or about to do so, up from 30 per cent in the previous quarter, while just over half (54 per cent) expected deterioration or stagnation, down from 65 per cent in late 2012.
ACCA’s Emmanouil Schizas said: “The global confidence gains recorded in Q1 2013 are much larger than what would be expected given the conditions on the ground. It seems confidence is being fuelled by an expectation of economic improvement in the future, but it’s not clear, when looking at the fundamentals, where this is meant to come from. As a result, we believe this surge in confidence is likely to be short-lived.”