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Reduction of costs of starting up businesses in Guyana
Government has announced that it has reduced the cost of starting up businesses in Guyana, as part of the initiatives to attract new investments.
Minister of Finance Dr. Ashni Singh last week issued an amendment to the 1995 Companies Regulation pursuant to Section 515 of the Companies Act 1991 to restructure the fees payable by new companies on incorporation. The amendment will also affect the costs of applying for share increases by existing companies.
According to the government statement, the reform is part of the administration’s ongoing work to reduce the cost of doing business in Guyana and to make it quicker and easier for companies to do business, all in keeping with the intention stated in the 2008 National Budget.
It is expected that by reducing the cost of doing business for many companies, the reform will boost investment and encourage businesses to set up and expand.
According to the new regulation, companies will now be required to pay $60,000 for certificate of incorporation and the registration of share capital at incorporation.
An additional $30,000 will be charged for any further increase in share capital, increase in any class of stated share capital or increase in any series of any class of stated share capital.
Previously, for certificate of incorporation a $30,000 fee was in place while for stated share capital account for each class: up to $500,000 – $25,000; above $500,000 – six per cent of the stated account.
For stated share capital account for each series of any class of shares –Up to $500,000 the cost will be $14,000 while above $500,000 – three per cent of the stated account.
For further increases in stated share capital, or increase in any series of any class of stated share capital – up to $10 million – two per cent of the increases while above $10 million – one per cent of the increases.
Other business registration-related fees such as those for the filing and certifying of documents, and the duty payable under the Tax Act, remain unchanged.
The new fees are only applicable to local companies.
Meanwhile, in a related development, Minister Singh also tabled last Thursday an amendment to the Tax Act Cap 80:01 intended to repeal Section 16 of that Act, which will remove the stamp duty that was previously payable on the share capital of a company on incorporation and which when passed in Parliament will further reduce the cost of incorporating a company.
This amendment to the Companies Regulations and the related proposed repeal of Section 16 of the Tax Act are the latest in a series of reforms, a major one of which was the government’s 2007 abolition of the consumption tax along with five other taxes.
The importance of efficient administrative procedures such as incorporating a company is central to ongoing work in implementing the National Competitiveness Strategy, which states that “freeing enterprises from excessive ‘red-tape’ and inefficient, duplicative and time-consuming procedures greatly enhances enterprise competitiveness.”
In addition, one of the main priorities of the National Competitiveness Council, Guyana’s highest-level public-private decision-making body, is reducing ‘red-tape’ and making it cheaper and easier for companies to do business.
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