|The Bahamas Investor Magazine
June 26, 2018
June 26, 2018
When Brent Symonette was first named to the Bahamian Cabinet it was in 1992 as minister of tourism and he went on to become deputy prime minister in a later administration. Fast forward a quarter of a century and in May of 2017 he was invited by newly elected Prime Minister Dr Hubert Minnis to once again take a seat at the Cabinet table.
As Minister of Financial Services, Trade and Industry, and Immigration, Symonette says he is determined to bring about another transformation, this time in the nation’s second economic pillar of financial services. Symonette, juggling three major ministries, is focused on boosting growth in areas such as arbitration, financial services technology and improving the ease of doing business in The Bahamas.
Many questioned why Symonette had been given such a large portfolio of ministries that were traditionally kept separate. It turns out he requested it.
“When the new prime minister approached me about coming back to Cabinet, I said I wanted immigration to be part of it. Firstly, I had been there before, but also because a lot of financial services and what we are doing [with immigration] are interlinked. Trade and industry has the same issue,” he says, explaining that having all three in his portfolio makes it easier to take advantage of what he sees as inherent synergies.
Easier to do business
Following a landslide May victory at the polls, the Minnis administration found itself at the helm of a country that was struggling to keep its World Bank Ease of Doing Business ranking.
“There is a perception that the ease of doing business in The Bahamas is not an ease of doing business,” says Symonette.
Prime Minister Minnis addressed the topic at the National Conclave of Chambers of Commerce in The Bahamas a month into his term in office. “Countries around us are rapidly instituting changes and simplifying processes to make it easier for businesses to operate,” Prime Minister Minnis said, adding, “The Bahamas has been slow to modernize, slow to adapt to change.”
In order to speed things up, the government appointed a committee dedicated to addressing the ease of doing business. Spearheaded by businesswoman and former president of the Senate Lynn Holowesko and attorney Bryan Glinton, the committee has already made several recommendations to the Cabinet and will continue to look at key indicators including the process for starting a new business and getting it registered, The Central Bank of The Bahamas practices and policies that could hinder doing business in the country and cross border trade.
Progress is being made, but Symonette admits it is a considerable challenge. On October 31, 2017, the World Bank released the 2017 rankings and The Bahamas moved up two spots. The improvement was modest, but considering much of the vision and plans the new administration is working towards have not materialized yet, there is reason to feel confident that the 2018 report will find The Bahamas in an even better position.
A new way of doing business
In order to build on this and move the country closer to the top of the rankings, Minnis said that his administration would, for starters, focus on simplifying the business license process, fix the investor proposal process and sort out the immigration protocols.
In response to a mandate to tackle this issue, Symonette tabled the Commercial Enterprises Bill in Parliament in October. Perhaps the most transformational and innovative facet of the new legislation is the proposal to fast-track work permits for a certain number of key personnel needed for businesses in select industries starting the process of setting up shop in the country.
This is not a blanket legislation, but targets specific businesses that fit the government’s growth strategy and meet set criteria to make them eligible for a specified commercial enterprise certificate.
The requirements include a minimum $250,000 investment, a business plan outlining exactly how they intend to train and create opportunities for Bahamians to be able to eventually take on roles initially requiring work permits, and the seal of approval from the Investments Board.
Passed in December last year, The Commercial Enterprises Act will enable the Investment Board-approved businesses to apply for work permits for executives, managers, or employees with specialized skills within 30 days of them arriving in the country. If the director of immigration does not respond to the application within 14 days, it will be considered automatically approved for three years and is renewable for an additional period of up to three years.
For Symonette, this new approach is just plain common sense. “The 14 days is going to happen,” he says. “Why shouldn’t it happen? We have already said to you as an investor you can come in here and start your wealth management operation, or whatever it is you are going to do. Why then do we have to go to the director of immigration to say here he is, here’s what he wants to do?”
Simplify and streamline
Over the years, a lot of what Symonette calls “idiosyncracies” have developed in part because various ministries use each other to police the permit system, and also due to government’s failure to tap into technology.
“If you are a non-Bahamian and you go to get Bahamas Investment Board approval to do a project, and it contains a work permit or a permanent residency component to it, you then have to go and do the same Know Your Customers procedure with immigration that you already did with the Bahamas Investment Authority (BIA) to get your permit,” he explains. “So we are looking at ways of saying you can take the certificate from the BIA to immigration and they are both treated equally. You don’t have to go through the hoops again and again.”
Other measures currently being considered to make it easier to do business in The Bahamas and attract high-net-worth individuals include the issuance of Tax Compliance Certificates requiring residence in the country of up to 120 days a year, the opportunity to earn permanent residency by starting a business or investing in the University of The Bahamas or Treasury Bills rather than it being a matter of residency, and developing a dedicated independent board to review standard citizenship applications.
Efforts to simplify and streamline the processes for obtaining a business license and even register and license a car are also in the works.
New revenue streams
The Commercial Enterprises Act outlines the kind of business the new government is hoping to attract.
Captive insurance–an industry lost long ago to Bermuda–reinsurance, wealth management and mutual fund administration are areas The Bahamas is well versed in.
Other areas highlight the government’s new focus on technology. Computer programming, software design and writing, nanotechnology, data storage, bioinformatics and analytics are all areas Symonette sees as a good fit for a country with a solid infrastructure, stable government, and a “good, well-trained workforce.”
The other big potential he sees is in international arbitration–an opportunity that has been placed on and off the back burner for some time now by successive governments. The Minnis government has circulated draft legislation to leading law firms to seek wider consultation. Although Symonette accepts that development of The Bahamas as an arbitration centre will not happen overnight, he believes it is worth pursuing and has his eye on trust services and maritime arbitration as initial niches.
Even though the initiatives and incentives being proposed are still new and not yet put into law, the BIA has already seen a lot of interest being expressed in doing business in The Bahamas.
“There’s a lot of interest that exists,” Symonette says. “We just have to process the applications quickly so we don’t lose the investors. We want to get to a point where investors get an answer fairly quickly–yes or no.”
As The Bahamas positions itself to once again become a choice destination for those looking for somewhere to domicile their business ventures, the government is determined that things be done the right way.
“We are not looking at going after money that doesn’t pass muster. The Bahamas is looking to be fully compliant and fully legitimate. We have signed up to the Common Reporting Standard and we are looking forward to bringing that into effect this year,” he says.
Another way The Bahamas is seeking to step in line is by finally becoming a full member of the World Trade Organization (WTO), having first applied in 2001.
The Cabinet is making an aggressive push to sign up by 2019, something Symonette admits is a tall order. “It’s going to be difficult, but we are going to work toward it. There are a lot of challenges. We have to do some sensitization on the whole revenue issue,” he says.
Some of the key challenges include making sure the country is compliant when it comes to intellectual property rights and ensuring that any taxes are not seen as a barrier to trade. The former administration made strides towards sorting out the taxation concerns with the implementation of value added tax in 2015, however high import duties still remain in place.
The government has already started to conduct a review of the current customs system to determine the best way forward. Whatever approach is ultimately settled on must be compliant with the WTO requirements and be revenue neutral as customs duty currently represents about a quarter of government revenue.
Addressing the taxation as a barrier to trade should also help The Bahamas move its way up the World Bank Ease of Doing Business ladder.
Accession to WTO and removal of the import tax will not come without other challenges for the government as it looks for the best way to ensure compliance and at the same time not decimate small local businesses. The Bahamas is one of the last countries to sign up to the WTO and Symonette says that signing on is something he sees as equal parts benefit to the country’s economic growth and something the country simply has to do.
With these initiatives already in motion, Symonette is confident that The Bahamas will see an uplift in trade and the economy, growth in the financial services sector and a slow ascendence in world rankings in terms of ease of doing business. “I’m not going to deny, it is going to be a challenge,” he says, “but we are working on it.”