House Begins Debate on International Business Companies BILL
Photo: Rudranath Fraser
Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Daryl Vaz.
Debate on the International Business Companies (IBC) Bill, which seeks to modernize Jamaica’s appeal as an investment market for international interests, started in the House of Representatives on February 13.
The legislation, which was piloted by Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Daryl Vaz, will create a more desirable and competitive business environment in line with international standards and practices.
The Bill is a key component in a suite of legislation required to support international business and financial activities in Jamaica, and follows on the Partnership Bills for General and Limited Partnerships, which were passed in 2016.
“This IBC Bill is based primarily on the Ontario Business Corporations Act, and provides for the establishment and operation of international business companies in Jamaica. (It) provides that such IBCs shall be incorporated in Jamaica, but may only conduct business activities outside Jamaica (save for a limited number of activities as listed in the Bill), and therefore may not compete in the domestic Jamaica market,” Mr. Vaz said.
He noted that the Bill contains a number of sophisticated features, which will prove attractive to international investors. These, he said include: the amalgamation of IBCs; and the continuance of foreign bodies corporate into Jamaica.
In addition, the IBC Bill is designed to attract and facilitate a wide variety of international business activities and may be used for a number of purposes including.
These include serving as holding companies providing asset protection for intellectual property rights, real property, and the shares of other companies; serving as vehicles for licensing and franchising; conducting international trade, and investment activities; acting as special purpose vehicles in international financial transactions; and serving as the international headquarters for global business operations.
“This system will generate economic growth and job opportunities for local personnel, who are needed for professional and administrative services,” Mr. Vaz said.
He added that the activities within the international financial and business services sector will stimulate significant growth, generate revenues and create direct and indirect employment opportunities for Jamaicans, residing here and within the Diaspora.
“It is estimated that in the medium-term, this industry will generate millions of dollars in foreign exchange and create thousands of jobs for local professionals – lawyers, accountants, corporate secretaries to name a few, thereby creating a multiplier effect in the local economy,” the Minister said.
To be incorporated as an IBC, one or more individuals or bodies corporate must submit to the Registrar: Articles of Incorporation duly signed; Notice of location of the registered office of the company; and the prescribed fee.
The Registrar will then issue a certificate of incorporation and assign a company number, which must be printed on the certificate of incorporation provided that the name of the IBC is approved by the Registrar and is not a prohibited name.
“The IBC will have the capacity, rights, powers and privileges of a natural person. Please note, however, there are limits to the activities that the IBC is permitted to perform within Jamaica,” Mr. Vaz said.
Under the Bill, an IBC will not be able to carry on business of any kind or type with a person in Jamaica; carry on international financial services unless it is registered or licensed to do so; carry on banking business with a person in Jamaica, of any kind unless licensed to do so under the Banking Services Act; and carry on shipping business with a person in Jamaica.
Mr. Vaz stressed that the restriction against doing business locally is such an important provision that “engaging in the activities restricted…is a criminal offence.”
“The Bill is designed to attract and facilitate a wide variety of international business activities and boost Jamaica’s standing in the international forum as the ideal location to foster and grow investment,” he said.
