Attitude toward Foreign Direct Investment
The Government of Jamaica is open to foreign investment in all sectors of its economy.
Under International Monetary Fund (IMF) guidance, the GOJ has made significant structural reforms to its economy. Between May and December 2013, Jamaica’s Parliament passed 11 pieces of legislation to improve the business environment and support economic growth through a simplified tax system and broadened tax base. During 2014 the government passed an Insolvency Act to make bankruptcy proceedings more efficient. The establishment of credit bureaus and a Collateral Registry under the Secured Interest in Personal Property (SIPP) legislation are improving access to credit. Jamaica made starting business easier by consolidating forms and made electricity less expensive by reducing the cost of external connection works. The government implemented an electronic platform for the payment of taxes and has established a 90 day window for development approvals. New Electricity and Procurement Acts were also passed and should positively impact the investment climate.
Jamaica's commitment to regulatory reform has been an intentional effort to become a more attractive destination for foreign investment. According to the World Bank’s "Doing Business 2016" report, these legislative and economic reforms have helped improve the country's investment climate ranking from 71 to 64 (out of 189). Jamaica boasts the highest ranking in the Caribbean and sixth place in Latin America and the Caribbean, registering improvement in 6 of 10 categories. The country made significant improvement in resolving insolvency, moving from 60 to 35, following the passage of new bankruptcy legislation and now ranks among the top 10 in starting a business and getting credit. Jamaica improved 8 spots on the Global Competitiveness Index and is ranked 86 out of 144 countries for 2014/15. The country is ranked the third best country to do business in Latin America and the Caribbean according to the 2014 Forbes Best Countries for Business Report. Bureaucracy remains a major impediment, with the country continuing to underperform in the areas of getting electricity, registering property, paying taxes and enforcing contracts.
Other Investment Policy Reviews
Jamaica has not undertaken any investment policy reviews within the last three years in conjunction with the World Trade Organization (WTO), Organization for Economic Cooperation and Development (OECD), or United Nations Conference on Trade and Development (UNCTAD). The government last conducted a WTO review in January 2011 and an OECD review in 2004. Jamaica's Trade and Investment entity (JAMPRO) published a summary of Jamaica's economic & political landscape for potential investors.
It is available at: http://www.jamaicatradeandinvest.org/resources/investing-jamaica-2015.
With IDB funding, a Tholons Report published in July 2012 evaluates opportunities in Jamaica's Business Process Outsourcing (BPO) sector. http://jamaicacsi.org/wp-content/uploads/2012/05/IDB-Tholons-Jamaica-Carving-a-Niche-in-the-Global-Outsourcing-Market.pdf
Laws/Regulations on Foreign Direct Investment
There are no specific laws/regulations specifically related to foreign investment.
Businesses can register using the “Super Form,” a single Business Registration Form for New Companies and Business Names. The Companies Office of Jamaica (ORC) acts as a "one-stop-shop,” effectively reducing the registration time to between one and three days. Foreign companies can register using these forms, with or without the assistance of an attorney/notary. The “Super Form” can be accessed under Forms at the Companies Office of Jamaica's website, https://www.orcjamaica.com.
Jamaica trade and investment promotion agency (JAMPRO) is the government agency responsible for promoting business opportunities to local and foreign investors. While JAMPRO does not institute general criteria for investors, the institution targets specific sectors as well as export generating investment. http://www.jamaicatradeandinvest.org/
Micro, small and medium-sized enterprises (MSME) in Jamaica tend to employ less than ten employees and are assisted by JAMPRO and the Jamaica Business Development Corporation primarily through business facilitation and capacity building. Such fee-based services would be made available to foreign-owned MSMEs. https://www.jbdc.net/
JAMPRO lists the following priority sectors for investment: Logistics; Knowledge Services; Tourism; Manufacturing; Agribusiness; Creative Industries; Mining; and Energy. However, sector-specific incentives have been phased out and replaced by the new omnibus fiscal incentives framework that provides varying levels of tax relief with respect to customs duties, stamp duties and corporate income tax (see Section 5 Investment Incentives). The GoJ has also prioritized a Global Logistics Hub initiative with aspirations of positioning the country as a significant player in the global shipping and logistics industry. As part of the Global Logistics Hub Initiative and facilitation of investments into Jamaica, the government passed a Special Economic Zone Act effectively carving out geographic areas for "high impact investors." The Act allows for incentives such as low corporate tax rates to be offered to attract international investors. http://www.jamaicatradeandinvest.org/
Limits on Foreign Control and Right to Private Ownership and Establishment
All private entities, foreign and domestic, are entitled to establish and own business enterprises and engage in all forms of remunerative activity, subject to, inter alia, labor, registration and environmental requirements. Jamaica does not impose limits on foreign ownership or control, and local laws do not distinguish between local and foreign investors. There are no sector-specific restrictions that discriminate against market access.
The Embassy is not aware of any discrimination against foreign investors at the time of initial investment or after the investment is made. However, under the Companies Act investors are required to either establish a local company or register a branch office of a foreign-owned enterprise. Branches of companies incorporated abroad must also register with the Registrar of Companies if they intend to operate in Jamaica. There are no laws or regulations requiring firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation or control.
Jamaica has actively courted foreign investors as part of its divestment strategy. In certain instances the government encourages local participation, and restrictions may be placed on certain assets due to national security concerns. Privatization can occur through sale, lease or concession. Transactions are generally executed through public tenders, but the government reserves the right to accept unsolicited proposals. The Development Bank of Jamaica, which oversees the privatization program, is mandated to ensure that the process is fair and transparent. When some entities are being privatized, advertisements are placed locally and through international publications, such as the Financial Times, New York Times and Wall Street Journal, to attract foreign investors. Requests for proposals normally include the specific requirements under which bidders are allowed to participate and the criteria by which proposals will be evaluated. Foreign investors have won most of the privatization bids in the last decade.
The Government has identified dozens of public assets to be privatized, drawing from various sectors. While the time taken to divest assets depends on state of readiness and complexity, on average, transactions take between 18 and 24 months. The process involves pre-feasibility and due diligence assessments; feasibility studies; pre-qualification of bidders; and a public tender. In April 2015, the government signed a 30-year concession agreement for operation of the Kingston Container Terminal port facility. The Urban Development Corporation manages many assets available for privatization. Other assets to be privatized include Norman Manley International Airport, Petroleum Company of Jamaica and Caymanas Track Limited.
List of current privatization transactions: http://www.dbankjm.com/privatisation/current-transactions
Screening of FDI
No formal screening mechanisms exist for foreign investments. If investors apply for government incentives or will operate in a regulated sector, they must meet basic prerequisites, and due diligence may be carried out by the approving or regulating authority. This process is not discriminatory and is not intended to impede investment. Jamaica has undertaken a comprehensive program of trade and financial liberalization and most sectors are open to foreign investment. The government reserves the right to approve or reject projects with national security implications or for environmental considerations. Sectors such as financial services, media, energy and mining are subject to regulatory approvals and regulation.
The Fair Trading Commission (FTC), an agency of the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF), administers Jamaica's Fair Competition Act (FCA). The major objective of the FCA is to foster competitive behavior and provide consumer protection. The Act therefore forbids arrangements that substantially lessen competition or behavior that results in the abuse of a dominant position. The Act proscribes the following anti-competitive practices: resale price maintenance; tied selling; price fixing; collusion and cartels; and bid rigging. The act does not prohibit mergers or acquisitions that could lead to the creation of a monopoly. However, the government has raised the possibility of enacting antitrust legislation. The FTC is empowered to investigate breaches of the Act. Businesses or individuals in breach can be taken to court if they fail to take corrective measures outlined by the FTC.