Onward and Upward
What are the most common concerns of a foreign company interested in entering the country?
The Jamaican market is unique in the investment opportunities it offers foreign investors. The number of foreign companies operating in Jamaica would indicate that not only is there interest in Jamaica, but that they also achieve a reasonable return on their investments. The fact that we have a democracy and the absence of any intervention by the army with elections held generally every five years is another important factor for investors. The level of red tape is of concern, and in this regard, the government has appointed a Minister without Portfolio in the Ministry of Economic Growth and Job Creation with responsibility for investment portfolios. The latest statistics in 2017 indicate that crime is down in most areas. Jamaica is regarded as an extremely friendly tourist destination, and for a number of years, incentives have been offered for investors in different areas of the economy. Such incentives include the Hotel Incentives Act and other acts that provide tax holidays for investments. Jamaica has generally removed foreign exchange restrictions, and companies are free to remit their profits abroad. The currency has declined in value vis-à-vis the currencies of its main trading partners over a number of years. However, it has shown signs of recovery in 2017. Statistics indicate that there are few strikes in the labor force, and there is the presence of an Industrial Dispute Tribunal to deal with disputes between workers and employers. The final court of appeal in Jamaica is the Privy Council in England, which gives investors the assurance that any dispute will be settled in an impartial manner. Furthermore, the Constitution provides that proper compensation be paid for any compulsory acquisition of property by the government.
How would you assess the current level of foreign interest in the country?
Jamaica was the leading recipient of FDI inflows in 2016 among the English-speaking Caribbean and small island developing states (SIDS) group according to the World Investment Report 2017. The main areas of investment at the moment are the tourism industry, which recorded over 4 million visitors to the island in 2017 and has seen a substantial increase in the number of hotel rooms in the last 10 years mainly due to investments by Spanish companies; the business process outsourcing (BPO) sector, which has become the fastest-growing industry in Jamaica, employing 14,000 persons in 2014 and 26,000 people in 2017; bauxite, which is presently making a comeback; and special economic zones, which are geared toward utilizing the business opportunities presented by the widening of the Panama Canal, providing opportunities to assemble and repack goods destined for the US and Europe.
What regulatory changes are likely to be implemented in Jamaica in the medium term?
An increase in the inflow of FDI and strong advisories from international lending agencies have forced law makers to take swift legislative measures to future proof the economy. Legislative and regulatory changes that have recently or will be implemented include the Companies (Amendment) Act 2017, the National Identification System (NIDS), special economic zone (SEZ) regulations, Data Protection Act, and medical cannabis regulations.
What positive trends do you see, and what is your outlook on the economy?
The present government came into office in 2016 with a promise of prosperity. It has set up an economic growth council that has set a target of achieving 5% annual growth by 2020. Two of the main constraints in achieving this are the present murder rate and red tape. The present government has a small majority in parliament, and it is in its interest to promote growth. The growth rate in Jamaica for the last 20 years has averaged less than 1%. To ensure a greater chance of re-election, the government has to deliver on growth. The government presently has a proactive stance, which will reduce murders and result in growth.