the gambia investment law regulation (giepa presentation)
DESCRIPTION
Presentation of Omar Garcia-Bolivar in The Gambia on legal business climate and investment law reforms.TRANSCRIPT
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Gambia Investment and Export Promotion Agency Act 2010
June 13, 2011.Banjul.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
INDEX
Best international practices for investments.
Issues with the GIEPA Act. Some recommendations.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
BEST MARKETING TOOL
Sound business climate
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
SOUND BUSINESS CLIMATE
Business opportunity. Easy to do business. Low cost. Good infrastructure. Access to credit. Rule of law.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
A COUNTRY IN AFRICA
Small. Difficult to reach. Not well known. Competition by close larger
countries.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
MAURITIUS
Population 1,275,323 Doing business rank: 20/183 FDI inflows 2006-2010: US $
256,680,712 GDP: US $ 8,588,729,727 GNI Per Capita
(US$)7,240.00
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
IN ADDITION TO…
Foreign investment policy: Investment law as a goodwill sign. Plan investment treaties (BITs,
FTA):ContentCountries to target
Double taxation treaties. A rational system of incentives. Promotional strategy.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
TAX INCENTIVES Limited in time for beneficiaries and for
granting agency. Granted automatically upon meeting the
requirements, e.g.: claim at time of tax return.
Contributor not relieved from compliance, e.g.: file tax return.
Subsequent supervision. Administered by revenue authority. Tax credits and investment allowances
directly related to the amount invested are better options.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
EXPORT PROCESSING ZONES
Hassle free regime. Trade facilitation measures in place. Imports free of duties and VAT. Simplified tax regime. Exports not subject to tariffs or
restrictions. Effective monitoring and supervision
by Customs authority. No subsidies in utilities,
communications or infrastructure.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
WHAT NOT TO DO“ The Gambia’s investment promotion authority
confers a special status on investors, who are then awarded special investment certificates that entitle them to benefit from incentive packages. The investment promotion authority also states that, ‘Apart from these specific incentive packages, others can be negotiated with the Agency depending on the strategic nature of the investment.’
To the extent possible, qualification for incentives should be automatic, with investors receiving them if they satisfy the conditions required by tax and other laws. Investors’ costs increase if they are asked to go through an approval process. Moreover, most investment promotion agencies lack the capacity to administer incentives —especially tax incentives.”
Source: Incentives and Investments:Evidence and Policy ImplicationsInvestment Climate Advisory Services of the World Bank Group. December 2009
The business climate in The Gambia
Opinion of the business community: Too many and high taxes. Expensive and unreliable electricity. Difficulties to access to credit. Access to/from the world: hard.
Doing business indicator: 146/183
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
THE GIEPA ACT
• It is an average law.• Some terms need to be defined.• Although it intends to create a rule based
incentive system, some discretion is present.• According to the Act, GIEPA receives and process the applications and if
approved, it recommends the Minister to grant the certificate to the applicant. This procedure involves discretion of the Board of GIEPA and it is very likely to cause delays and excessive costs for the applicants.
• GRA in turn recommends to Minister of Finance for the tax or export component of incentive package.
• No general time limit to cap the incentives.• Excessive, distortive and contradictory
incentives, e.g. tax holiday and tax depreciation.
• Universal arbitral consent.• MSME component.
How to attract business?
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Sound business climate
Regulati
REGULATIONS
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Recommendations
Look closely at the law again. Others:
Streamline the process of incentives. Have GRA actively involved. Try to emulate one-stop shops. Diminish discretion. Subsequent supervision. Database of MSME to matchmake. Play “dummy” with other MSME
provisions.
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
Omar E. Garcia-Bolivar [email protected]
www.bg-consulting.com
End
Thank you.