Dr. the Honourble Natalio D. Wheatley
Premier and Minister of Finance
Update on Business Licencing Act 2020
And Other Current Matters
24 June, 2022
A pleasant good morning to the people of the Virgin Islands community, and to the members of the media.
It is my pleasure to provide another update on the work that is being done by your Government.
Before going into the Business Licensing Act, I will provide an update on a few other matters. In terms of advancing our tourism sector, on 11 June I travelled to San Juan, Puerto Rico with BVI Tourist Board Director Mr. Clive McCoy and other tourism officials to engage with market participants there and promote the BVI as a destination. The interaction was warm and friendly and we look forward to Puerto Ricans coming to the BVI for Christmas in July.
I then traveled to New York, where I had the opportunity to have productive meetings with our New York Tourist Board Office where I discuss plans to market and promote the BVI in the the North American market. We have an excellent office and the entire BVI Tourist Board will have my full support to execute their campaigns.
In addition, I am very pleased to report that on the 17th of June, in my capacity as Tourism Minister I convened a very productive initial tourism stakeholder consultation with representatives of the various sub-sectors of the tourism industry. In the spirit of partnership between the industry and Government, and a much needed resest in our relationship, I co-chaired the meeting with Mr. Andreas Pade of Rosewood Little Dix Bay. The discussions were frank and honest, but aimed at the improvement of tourism and making the the tourism season ahead a success. The Government and tourism industry have agreed to have specific sub-sectors technical discussions on key issues and further stake holder meetings in the very near future.
In terms of International Affairs, on 13th June, I addressed the Committee of 24 at their annual June session, which I am obliged to do under UN procedures for those Overseas Territories on the UN list of Territories. I updated on the current situation in the Territory in which the Government of National Unity is implementing reforms under continued democratic governance. I had the pleasure of also meeting the UK Deputy Permanent Representative to the UN Ambassador James Kariuki. Our meeting was very positive.
Next month I will travel to Suriname for the CARICOM Heads of Government meeting to discuss issues affecting the Caribbean.
Today, I would like to speak a bit about the Business Licensing Act, 2020, which received was passed in the House of Assembly last week.
I propose to provide some background to the work that has been taking place regarding the development of the draft legislation and to give some context as to how it fits into the broader vision and objectives of the Government.
With me this morning is Ms Lizette George, Policy Analyst/Strategic Adviser in the Premier’s Office, who will also provide some details on the process leading up to the drafting of the Act.
We all know that business is an integral part of any economy, and every economy must be conducive to the needs of business. This includes having clear policies and procedures for registering and regulating businesses.
Over the years, persons doing business and attempting to do business in the Virgin Islands have complained that the registration process is sometimes long, cumbersome, confusing and discouraging.
We have all heard stories from persons who spent years to get their trade licences approved – and this is really not acceptable.
It lends to the perception that the system is not fair and transparent. We cannot have persons feeling that they are being given some arbitrary run-around, especially where this may be inconsistent with the laws and policies that are in place. This is not good for our reputation. It is not healthy for business.
And we have to change this, so that we can inspire confidence in the system and ensure that we have an environment that is friendly and welcoming to business and investment.
One of the underlying problems is that the current legislation, the Business, Professions and Trade Licences Act CAP 200, 1989, is about 33 years old. The categories in that Act – and the design of the Act itself – were appropriate for that time.
But, a lot has changed in the world since then. There are new technologies. There are new types of jobs and businesses. There are new ways of performing services.
And therefore, one of the things that was happening, is that there was difficulty in fitting some of the modern businesses and business models into the existing framework and existing labels. The only way to fix this issue, is to overhaul the legislation – inclusive of the business classifications – to make it more aligned with the modern needs.
Around January 2017, the then Government started a project to review the systems that were in place for regulating business in the Virgin Islands with a view to reform.
A Trade Policy Review Committee was established in 2017, and that committee produced a number of reports to inform on what were the areas that needed reform and what these reforms should entail.
The documents produced for the consideration of Cabinet included the National Trade Policy of the Virgin Islands, an Investment Policy Statement, a National Investment Strategy, an Investment Incentives Policy, an Encouragement of New Industries Policy and a Residency for Direct Investors Policy, among others.
Three Working Groups were subsequently set up including members of the Committee and other stakeholders.
The first Working Group focused on Trade and Business, and was responsible for reviewing and making recommendations regarding trade and business licencing and regulation.
The second Working Group focused on Investment and was responsible for investment promotion and facilitation. And, the third Working Group focused on Consumer Affairs and was responsible for fair competition and consumer protection matters.
Everyone should be aware that, especially when it comes to projects that have a longer life-span, the work of the Ministries on such projects continue even through a change in Government.
And this project to review and reform the systems and processes for registering and regulating business in the Virgin Islands was not an exception.
Work has been ongoing, and in some areas it remains ongoing, with the overall objective of improving the ease of doing business – so that we can develop the economy, stimulate business, attract new business, diversify our revenue streams, improve our resilience and create opportunities for Virgin Islanders and residents.
As I said, work on this overall strategy was ongoing since 2017 and one of the major developments was the establishment of the Trade Policy Review Committee which conducted work in several focus areas.
One of the things coming out of this work was the framing of a strategic plan for trade and economic development, with the vision of creating: “A thriving, economically vibrant, diversified and innovative knowledge based economy, with an attractive business environment that ensures full employment and full participation in global trade.”
This strategy has been aligned with the 17 Sustainable Development Goals set forth by the United Nations.
The main goals of the strategy were to develop the National Trade Policy of the Virgin Islands in order to create the appropriate legislative framework for trade and economic development; and to establish the Virgin Islands Trade Commission, which would function as an effective facilitator and monitor of all matters relating to trade, business, investment and fair trade, inclusive of consumer affairs and fair competition.
Several objectives were identified that would make a meaningful impact on trade and economic development in the Virgin Islands.
- Creating an atmosphere of trust, transparency and predictability to increase investments, private sector growth and local entrepreneurship.
- Simplifying government procedures and minimising the cost of doing business and other transaction costs through the use of e-governance.
- Facilitating capacity building in manpower and resources for the development of the Territory as a hub for trading in goods and services.
- Facilitating technological upgrades of all the sectors of the Virgin Islands economy through the use of ICT in order to transform into a Digital Economy.
- Identifying and developing special focus areas, which would diversify the economy and generate employment opportunities.
- Facilitating forward looking policies for revenue generation and ensuring that domestic sectors are not disadvantaged by global regulations.
- Upgrading infrastructure and communication linkages to international standards.
- Increasing competitiveness in the Territory and enabling consumers to have access to the widest choices of goods and services on the best possible terms.
- Achieving economic integration among regional trading partners and securing access to global markets for the export of goods and services originating from the Virgin Islands.
These objectives would be achieved by:
- Creating an effective legal framework of policies, legislation and strategies to address our economic development needs.
- Creating “One-Stop-Shop” services by coordinating all of relevant agencies to facilitate business.
- Creating a business friendly environment to ensure the ease of doing business by streamlining processes with clear lines of procedures.
- Creating fully digitised services through Integrated IT systems of e-Government.
- Offering businesses access to incentives, subsidies, support and financing mechanisms.
- Developing and promoting new sectors for diversification and facilitation of investments in key sectors for growth.
- Creating efficient export mechanisms by ensuring appropriate standards, procedures and infrastructure.
- Facilitating trade and export development for internationalising businesses
- Promoting fair trade by facilitating competition and consumer issues.
- Establishing global connectivity through our integration with regional & international partners.
- Creating efficient ICT infrastructure through the upgrade of telecommunications services, etc.
- Creating ease of access to the BVI through our transportation services (air, land and sea)
- Creating and facilitating opportunities for the development of Micro Small and Medium Enterprises (MSME) by providing relevant support services.
- Establishing close linkages with manpower and economic priorities.
- Creating an education system with a strong focus on science, technology, engineering, arts and mathematics (STEAM)
- Promoting a labour force with relevant technical and vocational skills and industry specific technical skills.
As you can see, the strategy for trade and economic development is a very comprehensive one. It includes consideration of education and training needs, development of the labour force with the range of skills and competencies required, and, among other things, creating the one-stop-shop for business services in the Virgin Islands Trade Commission.
You will also appreciate that based on what I have described above, the overall trade and economic development strategy is a large project made up of several sub-projects. And, we do have a timetable for all the necessary reforms, which is running in four phases ending in December 2023. The subsidiary initiatives are being worked on simultaneously.
As we implement the various reforms to deliver ease of doing business it will include revising the processes for licensing, registration and regulation of businesses, and relevant laws.
This body of work includes the repeal of the 33-year-old Business, Professions and Trade Licences Act CAP 200, 1989 and the passage and implementation of the new Business Licensing Act, which was done in our last House Sitting.
The Business Licensing Act establishes a clear and transparent framework for the registration and regulation of business, which will be done via the Virgin Island Trade Commission as part of its one-stop-shop function for trade, business, investment, fair competition and consumer affairs. For instance, it is very clear on what documents are required for filing an application for a trade licence – whether as a belonger or non-belonger.
The Act includes provisions that will support locally-owned businesses so that they do not become disadvantaged to businesses owned by foreigners.
You would recall that earlier I mentioned the major difficulties posed by the classification for businesses in the Business, Professions and Trade Licences Act. The Business Licensing Act will address that problem through the adoption of the International Standard Industrial Classification of All Economic Activities (ISIC) system, which is the international reference classification of productive activities.
It is a system that was developed by the United Nations Department for Economic Affairs and which is used in the majority of countries around the world. This, of course, speaks to the goal of streamlining our systems and processes with other jurisdictions to improve the ease of doing business and better facilitating international trade.
This provides some background and context to the Business Licensing Act, how it was developed, how it fits into the larger strategy for transforming our business environment and driving trade and economic development, and the stakeholder involvement not just in this initiative but across the various sub-projects within the overall strategy.
Since the passage of the bill, some concerns have been raised. Firstly, it is important to note that this bill was brought before the public for wide ranging consultation, as Lizette George will inform during her address. Some of the meetings were not well attended, but we did have a well-attended meeting with the BVI CCHA where businesses had the opportunity to raise concerns. Feedback from those meetings was incorporated in the final bill, and no feedback was received about the fees or the 90 day matter which has caused concern.
Also, it is important to note that the 90 day clause which has caused a stir was in the old Act which has been in force for 33 years. It is certainly not new, and the interpretation of this clause has been misunderstood. It does not mean that the business has to be operating; it may mean that a bank account has been set up or some other effort made to get the business going rather than issuing licenses which will lay dormant for years in some instances.
Also, we recognize that increasing fees will never be popular, but it is important to note that the fees will not come into force until 2024. That gives us enough time to monitor the economic environment, and we can graduate the hikes if necessary. Unfortunately, we won’t be able to maintain the same fee structure from 1989, and with the setting up of the Trade Commission we hope to bring better value to the customer.
I will now introduce Ms Lizette George, Policy Analyst/Strategic Adviser in the Premier’s Office, who will walk us through the details of the process that was entailed in the preparation of the Business Licensing Act.
I thank you.