By: Jack A. Alli, Sons & Co., Chartered Accountants

The Writer Khalil Alli
Partner with the Accounting business firm of Jack A. Alli, Sons & Co

Full general information is provided on areas of interest to investors including methods of establishing a business in Guyana, tax issues, employment issues, investment protection and environmental considerations, amongst others.

I: FORMS OF BUSINESS
There are several options for establishing a business organisation in Republic of guyana including registering a new visitor, registering an established foreign visitor in Guyana, establishing a partnership or operating every bit a sole proprietorship.

R egistering a Foreign Company
Under the Companies Act, a company can exist registered with submission of an application to the Registrar containing the post-obit:
• Articles of incorporation giving details such as the name proposed for the visitor; the registered function in Guyana; the share capital – rights, privileges, restrictions, weather, payment terms; and the size of the lath of directors.
• Statutory declaration by an attorney-at-law on the suitability of signatories to the manufactures of incorporation.
• Details of the persons who are to be beginning director(s) and secretary, and their consent to serve.

A registration fee of Thousand$63,900 is required.

There is an obligation to file an annual render with the Registrar, forth with the audited financial statements.

Registering a Foreign Company

  • A strange company established under the laws of a country other than Guyana tin register to carry on business in Guyana as an external company under the Companies Deed. To register the following documents should be submitted to the Registrar.
    • Statement containing details such as the company name; the jurisdiction incorporated in; the date and style of incorporation; the company's share capital; the extent of express liability; the undertaking in Guyana and engagement of commencement; the full accost exterior Guyana and in Guyana; and the names, addresses and occupations of the directors of the company.
    • Statutory annunciation by ii directors of the company attesting to the information submitted to the Registrar, along with a copy of the corporate instruments of the company.
    • Statutory annunciation by an attorney-at-law that the Companies Human action has been complied with.
    • A fully executed ability of attorney that shall empower some person named in the power and resident in Guyana to act as attorney of the company.

A registration fee of between G$lxxx,000 to G$300,000 is payable depending on the share majuscule of the visitor.

  • A registered external company is required to lodge audited accounts with the Registrar on an annual basis. A registered company is entitled to ain country in Republic of guyana equally may be authorized past licence of the President.

Registering Sole Proprietorship or a Partnership Nether the Business organisation Names (Registration) Human activity, a sole proprietorship or a partnership carrying on business under a business proper noun other than the true surname(south) of the sole proprietor or all partners, is required to be registered. The Partnership Act governs the workings of partnerships in Guyana.

Registration of a business name requires submission of an awarding to the Registrar containing the following details:
• The business name, general nature of the business and the principal place of business.
• The name, nationality, usual place of residence and other business organization occupation of the sole proprietor or every individual who is a partner.

A registration fee of One thousand$5,000 is payable.

II: Taxation Government

Corporation Revenue enhancement

Corporation tax is charged at a rate of 40% for commercial companies (except telephone companies) and at a rate of 27.5% in the case of any other company. Telephone companies pay corporation tax at a rate of 45%.

A commercial visitor means a company for which at to the lowest degree 75% of the gross income is derived from trading in goods non manufactured by it and includes whatever commission bureau, any telecommunication company, any bank and any insurance company (other than a long-term insurance company). Where companies are engaged in both commercial and non-commercial activities, the commercial action is taxed at twoscore% and the noncommercial activity is taxed at 27.5%.

Where the actual corporation tax liability of a commercial company as computed at twoscore% or 45% is less than ii% of the turnover of the company, the Corporation Tax Act provides for the payment of corporation revenue enhancement at the rate of 2% of turnover – referred to as minimum revenue enhancement. Insurance companies and whatever company exempt from corporation tax are exempt from minimum tax. Minimum taxation paid in backlog of the bodily corporation revenue enhancement liability is recoverable one time proven to the satisfaction of the Commissioner-Full general.

Tax returns must exist filed by April 30 of the twelvemonth following the accounting year-end. Accounting year-ends that exercise not coincide with the calendar year-stop must be approved past the tax authorization. Revenue enhancement returns are required to exist submitted with audited financial statements.

Corporate bodies are required to pay corporation tax in quarterly installments on March 15, June 15, September 15, and December 15 of the year of income. Whatsoever shortfall of taxes afterwards bookkeeping for quarterly installments should be met by April 30 following the year of income.

Co-operative Profit
The corporation tax rates on branch profit are the same every bit for companies. Branch profit net of corporation tax is subject to withholding tax at xx%.

Revenue enhancement Losses
Losses may exist carried frontwards indefinitely to be ready off against time to come profits. Brought forrard revenue enhancement losses cannot be used to reduce the taxation payable of whatever year by more than 50%. Loss carry-backs are not permitted.

Payments to Strange Affiliates
A company may claim a deduction for charges paid to strange affiliates, provided such amounts are reasonable and necessary, having regard to the requirements of the trade. Deduction for caput office charges is restricted to the lesser of the charge and i% of gross income of the company.

Group Taxation
In that location are no group tax provisions.

Income Tax
Income is taxable when it accrues in or is derived from Guyana, whether or not the individual is resident in Guyana, and whether or not the income is received in Guyana.

Employment compensation includes all benefits and allowances derived from employment, except allowances for medical or dental expenses or for whatsoever passage to or from Republic of guyana and allowances for subsistence, travel, company car, amusement, security, or expenses if explained to the satisfaction of the revenue enhancement say-so.

There is a personal allowance equivalent to the higher of G$threescore,000 per month or one-tertiary of the employee's bacon. As well, the employee's national insurance contributions are allowed as a deduction in determining taxable income. The rate of income tax is 28% on taxable income up to One thousand$120,000 per month and 40% on taxable income beyond this level.

Self-employed persons make income tax payments in quarterly installments with any shortfall of taxes existence made by 30 Apr following the year of income. Other employed persons have income taxes withheld nether the pay-as-you-earn (PAYE) organisation. Tax returns must exist filed past April 30 of the yr following the yr of income.

National Insurance Scheme
National insurance contributions are required at a rate 14% of earnings, with five.half-dozen% existence deducted from employees' salaries and 8.4% existence contributed by employers. Self-employed persons contribute 12.5% of earnings. There is a maximum monthly earnings ceiling of Grand$220,000

Withholding Taxes
Withholding taxation at twenty% is deducted at source on gross distributions, bank interest and other specified payments (eastward.k. royalties, direction fees, hire) made to non-residents. Additionally, payments disbursed to local contractors in excess of G$500,000 is subject to a withholding revenue enhancement of 2%.

Holding Tax
Property revenue enhancement is payable on net belongings of companies and individuals at the end of twelvemonth of income. For a company, the outset G$10 million of net property is exempt, the side by side G$fifteen meg is taxed at 0.v% and thereafter a rate of 0.75% applies.

For an individual, the starting time Yard$40 million is exempt and a rate of 0.75% is applied on net belongings in excess of G$twoscore million.

Capital Gains Taxation
Gains arising from disposal of capital avails held for between 1 and 25 years are subject to capital gains revenue enhancement at a rate of 20%. Gains arising upon the disposal of capital avails inside 12 months of conquering are subject to corporation or income tax equally appropriate. Upper-case letter assets held for more than than 25 years are not subject to capital gains tax upon subsequent disposal. Capital losses are allowed every bit an starting time to capital gains and may exist carried forward for a menses of 24 years.

Stamp Duty
Stamp duties are charged on various types of instruments. The rate applicable varies by blazon of musical instrument.

Custom Duties
Customs duty is charged on the importation of goods into Guyana. The rate applicable varies past type of good.

Excise Tax
Excise revenue enhancement is charged on the importation or domestic industry of motor vehicles, petroleum products, tobacco products and alcoholic beverages. The charge per unit of excise tax varies across and inside these product groups.

Value-added Tax
Value-added Revenue enhancement Act at a charge per unit of xiv% is charged on taxable supplies of goods and services. In that location are sure categories of supplies which are zero-rated or exempt.

Corporation Tax Holiday
Under the Income Revenue enhancement (In Aid of Industry) Act, the Minister of Finance may grant an exemption from corporation taxation with respect to new economic activity of a developmental and risk-bearing nature in one of the following fields:
• Non-Traditional Agriculture Development and Agro- Processing
• Information and Communications Technology
• Petroleum Exploration, Extraction, or Refining
• Mineral Exploration, Extraction or Refining
• Tourist Facilities
• Value-Added Wood Processing
• Textile Production
• Biotechnology
• Development and Manufacturing of New Pharmaceutical Products, Chemical Compounds and the Processing of Raw Materials to Produce Injectables
• Infrastructural Evolution, Including the Product of Electricity Using Renewable Sources of Energy

New economic activity is one of the post-obit administrative regions of Republic of guyana may also qualify for exemption from corporation tax:
• Region 1: Barima / Waini
• Region vii: Cuyuni / Mazaruni
• Region 8: Potaro / Siparuni
• Region 9: Upper Takatu / Upper Essequibo
• Region x: Upper Demerara / Upper Berbice

Exemption is granted for a period of upwards to 5 years simply may be extended up to 10 years if the activity is in 1 of the specified economical fields. In the case of infrastructural development the exemption may extend across 10 years. In add-on to the above provisions, the Minister may grant an exemption from corporation revenue enhancement with respect to income from the post-obit activities:
• Wind and Solar Energy
• Water Treatment and Water Recycling Facilities
• Waste Disposal and Recycling Facilities for Plastic Items

Exemption for corporation tax for these activities shall be for a menstruum non exceeding two years.

Consign Allowances
Companies that export sales of manufactured, processed or agronomical products are entitled to export allowances equally a deduction from chargeable profits. The breakthrough of the assart is dependent on the percentage of consign sales to total sales. Products that exercise non qualify for this allowance are bauxite, gilt, diamonds, petroleum, sugar, rum, molasses, rice, timber, lumber, and shrimp. Also, export sales to certain CARICOM countries do not qualify for the allowance.

Double Tax Treaties
Guyana has effective double taxation treaties with Canada, the United Kingdom and CARICOM Member States that have ratified the CARICOM Double Tax Treaty.

III: LABOUR LAWS IN GUYANA

Labour Government
Republic of guyana has several laws which govern the employment of labour. Some of the meaning laws in this regard are:

Labour Deed
Termination of Employment and Severance Pay Human action
Wages Council Act Leave with Pay Act
Shops (Consolidation) Human action
Prevention of Discrimination Act
Occupational Safety and Wellness Act
Labour (Conditions of Employment of Sure Workers) Act
Trade Unions Recognition Human action
Employment of Young Persons and Children Act
Licensed Premises Act Factories (Hours and Holidays) Act

These laws address matters such every bit the treatment of wages and salaries, normal hours of work and overtime, get out with pay, prophylactic, wellness and welfare, accidents and occupational diseases, termination of employment and severance pay, registration and regulation of industrial establishments, commonage agreements, employment of young persons and duty of employers to keep records.

The normal work calendar week is legislated as 40 hours over not more than v days. Whatever hours of work beyond normal hours are remunerated equally overtime in accordance with applicable police.

The statutory minimum wage in Republic of guyana is G$44,200 per calendar month notwithstanding the public service minimum wage is $fifty,000 per month.

Employment of Foreigners
Foreigners crave a work let issued past the Ministry building of Habitation Affairs to be employed in Guyana. Awarding for work permit requires information on both the employer and the intended not-national employee.

A CARICOM national holding a CSME Skilled National Certificate and his/her spouse are non required to obtain work permits to be employed in Guyana.

Four: INVESTMENT PROTECTION

Rights and Guarantees
Under the Investment Act, the Regime of Guyana provides various assurances to investors with respect to whatever investment made in Guyana, including the following:
• Not to compulsorily acquire or take possession of the investment unless for a purpose in police, on a nondiscriminatory basis, with prompt payment of acceptable compensation and with a right of admission to the court system.
• To allow investors to purchase or lease state in Guyana subject to existing laws.
• Non to intervene in the management of investor's activities, nor impose conditions on the sale, pricing or distribution of associated products, except in the pricing of utilities.
• Guarantee the right of investors to make up one's mind the distribution of all profits and dividends, and to receive their share of such profits or dividends discipline to settlement of respective tax obligations.
• To permit the employment of skilled and adept foreign personnel when necessary with the approval of the relevant authority and in accordance with applicative laws.

Transfers of Funds Away
The Investment Act also allows investors to transfer funds, subject to payment of applicable taxes, for the following purposes:
Repatriation of dividends, earnings and capital
Remittance of proceeds of sale or liquidation of an investment
Payment of involvement on international loans
Payment for imports
Payment of fees for trademarks, royalties and management services
Payment of licensing fees for franchising agreements
Transfers of funds may be prevented yet in circumstances of defalcation, insolvency, criminal proceedings, courtroom orders or judgements or when necessary for the protection of stockholders or creditors.

Dispute Resolution
The Investment Act provides that in cases where disputes arise among investors or with the Government of Guyana, the following avenues are bachelor if the affair is not amicably settled through consultation or arbitration.

Submit the dispute to arbitration under the Arbitration Deed Refer the matter to the competent courts in Guyana Submit the matter to the International Centre for the Settlement of Investment Disputes (ICSID) of which Guyana is a member.

Five: OTHER MATTERS OF INTEREST

Environmental Protection
Under the Ecology Protection Act, administered by the Ecology Protection Agency, a developer of any of the following types of projection, or whatsoever other projection that is likely to impact the environment is required to obtain an environmental permit.

Construction of any hotel, guest firm or inn above ten rooms Installation for hydro-electric energy production Structure of roads, harbours and airfields Dams and other installations designed to hold liquid or to shop information technology on a long-term ground
Installation for the handling of waste water, industrial or domestic waste product
Importing of any waste thing whether hazardous or not Release, utilize or keeping of any genetically modified organisms Harvesting and utilization of forest resource Extraction and conversion of mineral resource

Currency Matters
The unit of measurement of currency in Guyana is the Guyana Dollar which is freely convertible into other currencies based on prevailing market weather condition. All budgetary obligations or transactions in Guyana are required to be expressed, recorded and settled in Republic of guyana Dollars unless permission is obtained from the Bank of Republic of guyana which is responsible for the regulation of the financial sector in Guyana.

Under the Investment Human activity investors may open accounts in Guyana Dollars and in foreign convertible currencies with licensed banks in Guyana.

Anti-coin Laundering
The Anti-Money Laundering and Countering the Financing of Terrorism Deed is the master legislation in this area. The Financial Intelligence Unit, provided for under the Act, is responsible for the treatment of suspicious transaction reports and other information relating to money laundering, terrorist financing and the proceeds of crime.

Stock Commutation
The Guyana Association of Securities Companies and Intermediaries Inc. operates the Guyana Stock Commutation. There are before long sixteen companies on the Commutation.

Accounting Standards
The accountancy profession in Guyana is regulated past the Constitute of Chartered Accountants of Guyana (ICAG). Bookkeeping standards adopted for awarding in Guyana are the International Financial Reporting Standards. The ICAG is a fellow member trunk of the International Federation of Accountants and the Institute of Chartered Accountants of the Caribbean.

Author's note :
The information contained in this article is for general guidance on matters of interest only and is not meant to exist comprehensive. It is recommended that yous obtain advice specific to your circumstances from professional advisers before proceeding.