National Bank of Dominica Ltd

Small Business and Tourism ForumFort Shirley, Cabrits May 18, 2011

Invest Dominica Authority:Facilitation Services For Small Business

Presenter: Mr. Shayan

Monelle Investor Services

Officer

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BACKGROUND• Invest Dominica Authority was established by an Act of Parliament in 2007

to facilitate and promote local and foreign investment.

• The Authority has two Units: • Investor Services Unit- responsible for facilitation of investment and

enterprise

• Investment Promotion Unit- responsible for promoting and attracting investments.

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MISSION

• To facilitate and actively promote investment opportunities in Dominica by assisting Government in the formulation and execution of national policies and providing support that exceeds our clients’ expectation.

VISION

• To establish Dominica as the preferred investment location for sustainable development.

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THE MANDATE OF INVESTDOMINICA AUTHORITY IS AS FOLLOWS:

• Formulate strategies and programs to promote Dominica as a jurisdiction in which to invest.

• Facilitating investments: processing of applications for fiscal incentives, providing clients with business advice, monitoring compliance of the beneficiaries of fiscal incentives, preparing policy and effecting legislation aim at improving the enabling environment and/or addressing sector interest to enable competitiveness.

• Image building of Dominica as an investment destination.

• Execute strategies, programmes and activities to promote Dominica as a destination in which to invest.

• Sustaining investments in productive sectors

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SECTORS WHICH QUALIFY FOR CONCESSIONS

• Tourism accommodation and ancillary services

• Manufacturing

• Agro processing

• Professional and IT enabled services

• Medical tourism and medical services

• Cultural and entertainment industries

• Any other sector with potential for employment, increase foreign exchange earnings and overall contribute positively to national income.

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LEGISLATION FOR RECOMMENDING AND APPROVING FISCAL INCENTIVES

• Fiscal Incentives Act- Chapter 84:51 of the Laws of the Commonwealth of Dominica

• Hotels Aid Act- Chapter 85:04 of the Laws of the Commonwealth of Dominica

• Income Tax Act- Chapter 67:01 of the Laws of the Commonwealth of Dominica.

• Value Added Tax Act ( Amendment)- No. 4 of 2006

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FISCAL INCENTIVES

• Definition of enterprise- (all encompassing) refers to economic or development undertaking

• Minister may issue a licence to import any plant, equipment, machinery, spare parts, raw materials or components thereof

• Tax holiday for a period not exceeding 15 years from the date of production

• Any net losses incurred by the enterprise during tax holiday period may, upon cessation of that period be carried forward and set off against the profit and gains chargeable to income tax for a period of 5 years next following the cessation

• No interest on dividends and other distributions out of profits during the period of tax holiday

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HOTELS AID ACT• Any accommodation containing at least 5 rooms for

guests

• Waiver of import duty on building materials and hotel articles

• If import duty is paid on articles imported for hotel accommodation, this can be reclaimed subsequent to the enterprise receiving concessions

• Tax holiday is specified in the Income Tax Act

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INCOME TAX ACT (Section 26)

• Maximum 20 years tax holiday for hotels ( revised 1991)

VALUE ADDED TAX (Amendment)• The comptroller may exempt from tax, capital goods if the

importer has a valid Hotels Aid Act or Fiscal Incentives licence, has not commenced taxable activity, is registered (among other conditions)

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TAXES PAYABLE WITHOUT CONCESSIONS

Import duty 5%-40% (dependent on items)

Customs service charge- 3%

Customs duties-28%

Environmental levy- 1%-1.5%

Excise tax on vehicles – 28%)

Income Tax-18%-38%(dependent on income)

**Value Added Tax- 15%• ** (only new enterprise that is not engaged in a taxable activity)

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CONCESSIONS AVAILABLE

• Waiver of import duty on building materials, hotel equipment, raw and packaging materials, spare parts, machinery and equipment and commercial and special purpose vehicles.

• Tax holiday.

• Value Added Tax grants the waiver of the payment of the 15% VAT on the importation of capital goods for new enterprises.

• Once this enterprise becomes operational, the waiver of the VAT ceases to be applicable.

• The other concessions granted as per the Hotels Aid Act or the Fiscal Incentives Act continues to be applicable until the time frame, which was approved for the concession expires

HOW CAN CONCESSIONS BE OBTAINED?

• Retrieve an application from IDA online URL WWW.InvestDominica.com

• Retrieve an application from IDA’s Office

• Submit a completed application to Invest Dominica Authority with accompanying documents

• Receive letter granting approval of concession request

• Submit Master List of items for waiver of duties

• Receive stamped approve list of items

• Proceed to customs to clear items at the port

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APPLICATION REQUIREMENTS

• Documents vary dependent on type of business and application request.

• Documents required are listed on application forms

• Some Examples: Evidence of place of business operation. (lease agreement, or title certificate)

• Licences from issuing entity, e.g. Fisheries, Planning, Discover Dominica Authority.

• Business Plan (if required)

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Application Approval Process (1)

• Submission of application with supporting documentation to IDA

• Review of application by IDA staff• Site visit by IDA staff to place of business operation• IDA receives clearance from all required authorities• Paper approved by client then submitted to Review

Committee

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Application Approval process (2)

• If Review committee approves and investment is less than EC$2,000,000 papers is submitted to the Approval Committee (a subcommittee of Cabinet) for final approval.

• If Review committee approves and investment is mores than EC$2,000,000 papers is submitted to Cabinet for final approval.

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CONTACT INFORMATION

Invest Dominica AuthorityFirst Floor, Financial CentreRoseau, Commonwealth of Dominica767-448-2045 TEL767-448-5840 faxwww.investdominica.com

Thank you for your attention and participation in this forum