Minister of Justice, Senator the Hon. Mark Golding, says Jamaica has much to offer companies all over the world that may want to set up their group headquarters in the island.
He noted that the country has a strong cadre of professionals in law, accounting and other fields, who can support the activities of a group head office.
"We also have excellent telecommunications facilities and we're strategically located in terms of the time zone, which is either identical to or only one hour different from New York and the Eastern Seaboard in the United States," he stated.
Senator Golding was contributing to debate in the Senate on October 5 on the Income Tax (Amendment) Act, 2012, which seeks to establish what is known as a group headquarters regime, where foreign firms are encouraged to establish their group head offices in Jamaica. It was passed after extensive discussion among the Senators.
The legislation defines an approved group head office company as an entity or other body corporate that operates in Jamaica and other parts of the world and establishes its head office and performs, among other activities, the supervision, management or monitoring of its operations; accounting, data processing, engineering, and other technical support; centralised treasury management and similar funding activities; and other such activities, as may be specified by the Minister, by Order, published in the Gazette.
The Bill, already approved by the House of Representatives, exempts officers of such companies from the payment of personal income tax. Senator Golding noted that the legislation also provides for the employment of Jamaicans as a condition of the eligibility for the tax relief that the expatriate employees will enjoy.
"The approved entity must ensure that at least 30 per cent of its workers carrying out group headquarters activities here are Jamaican citizens, who are resident in Jamaica. The Jamaicans will be taxed in the normal way as all other Jamaican workers are taxed, but the expatriates, who come here, will not be subjected to Jamaican personal income tax," he explained.
Senator Golding said the group headquarters regime must be properly marketed "so we can put Jamaica on the map as a place where firms looking to find somewhere to send its group headquarters, employees, and have them work, will have a fiscal regime, which accommodates that and has the support services infrastructure and geographical location that can make it beneficial to them".
Opposition Senator, Dr. Christopher Tufton, while voicing approval, argued that if the country is to benefit from the legislation, the Government "ought to link the legislation to a broader articulation of an investment strategy that will complement the legislative framework; and that could mean physical infrastructure, it could mean location, related re-development or re-gentrification… in order to facilitate a sort of holistic approach".
Government Senator, Norman Grant, also supported the Bill, noting that "it is certainly a part of a process that should lead to greater growth and development of the economy and, in particular, the whole question of urban renewal".
Opposition Senator, Arthur Williams, said he is satisfied that sufficient safeguards will be provided "to ensure that the regime works the way it is intended to work”, and expressed the hope the accompanying regulations will be finalised soon.
In response, Senator Golding, said he has been advised that “the regulations that would be required to operationalise the legislation would be in place ideally, hopefully by the end of this month (October)".