By RICARDO WELLS
Tribune Staff Reporter
THE government’s decision to place the investment threshold of the Commercial Enterprises Bill to $250,000 was made to prevent a potential run on permanent residency status by investors, Attorney General Carl Bethel suggested in the Senate yesterday.
Noting the reality that many of the nation’s current economic policies guarantee any foreign investor of $500,000 or more the right to apply and be granted permanent residency, Mr Bethel fired back at critics who slammed the $250,000 threshold as “bottom feeding” and “prostitution,” insisting the CEB aims only to encourage investment and not accelerate consideration for residency.
The issue has acted as a thorn for the CEB since its introduction, with many opposing the bill building their cases against it around the notion that the bill’s threshold was far too low to encourage significant and lasting investments.
Expounding on the government’s decision yesterday, Mr Bethel said the government did not want the issue of the initial capital investment made by a foreigner under the CEB to become “mixed up and tangled up” with issues such as permanent residency or economic permanent residency.
“All this bill speaks to is the capital requirements for a non-Bahamian to start a business, and get work permits; not permanent residency,” he told the Senate.
Additionally, Mr Bethel said the CEB intends to address the various declines experienced in the financial services sector over the past two decades.
Mr Bethel said there has been a “consequential loss” of banks offering what he referred to as staple business, that once provided the bulk of the Bahamas’ financial services sector.
He said the CEB was conceived as a way to address the loss of traditional business by providing a way to attract new and diversified enterprises to relocate and establish in the Bahamas.
Moreover, he said the CEB was eyed by the Minnis administration as a way to re-attract those larger, more labour intensive, non-tax sensitive, financial services which were once in the Bahamas, but were lost as a result of unfortunate missteps or bad policy decisions of former governments.
Mr Bethel stated: “Members opposite may well oppose this bill based on their notions of how the Bahamianisation policy worked, but I respectfully assert that this bill is in full accord with the Bahamianisation policy: which policy has always been subject to and acknowledged the need for allowing businesses which perform services for which Bahamians were untrained to locate in the Bahamas on favourable terms, obtain work permits, and also train Bahamians so that, over time, Bahamians came to have greater roles even at the highest levels of senior management in these businesses.”
Mr Bethel said the Bahamianisation policy was crafted to protect those areas where Bahamians dominated, while encouraging the acquisition of skills absent in the country.
He said: “The best example of this is the insurance sector. When, 40 to 50 years ago, Bahamians could probably be brokers or agents, do home service walking from door to door to collect a little $10 or $15 monthly contribution to your policy. But now, Bahamians own every major brokerage in this country, brokers and agencies owned by Bahamians. We also now own insurance companies.”
Meanwhile, opposition Senator Michael Darville called for a complete revision of the CEB, calling the legislation both “rushed” and “forced.”
The former MP for Pineridge claimed the government passed the bill in the lower chamber with little to no consultation from the business community and the people of the Bahamas.
Mr Darville stated: “Madame President, in the lower chamber, both the official leader of the opposition, as well as the deputy of the Progressive Liberal Party, insisted that this piece of legislation, along with its current amendments should be withdrawn, and sent out for wider consultation with the Bahamian people, professional bodies and all local industries that could be affected by the liberalisation of work permits in these proposed commercial economic zones, throughout the country.”
He continued: “Madame President, for the sake of accountability and transparency, I am asking the government to do the honourable thing, and withdraw this bill today, until there is wider consultation with the Bahamian people.
“Madame President, history would reflect that in 1991, the Progressive Liberal Party, led by the father of our nation, the late Right Honourable Sir Lynden Oscar Pindling presented to Parliament an Act to encourage the establishment, conduct and expansion of commercial enterprises and investment in design commercial enterprise zones throughout the Commonwealth of the Bahamas, by granting of certain exemptions and fiscal incentives to persons engaged in such enterprises or investments.
“This act which I understand is on the books but was never brought into force, set out to create commercial enterprise zones throughout the Bahamas, including East and West Grand Bahama.
“Madame President, unlike this bill, the 1991 bill had nothing to do with the liberalisation of work permits for foreign nationals operating in these economic zones, and the Progressive Liberal Party went on to debate that piece of legislation, which was later passed in both chambers.
“I understand that the current minister of financial services, who is the mover of the bill before us today was a part of the Free National Movement team at that time and despite the international pressures facing our small open economy the Free National Movement decided to shelve the bill.”
Mr Darville said the shoe was now on the other foot, and warned the government that if it does indeed pass the CEB, the next PLP government would repeal upon being elected.
“(The PLP has) clearly stated that we would repeal this new bill when given the opportunity if it is passed in its current form, simply because we believe it will liberalise the granting of work permits to foreigners operating in these commercial zones, which could hamper employment opportunities for young Bahamian professionals in these specialised zones, Brent Symonette is calling our position regressive and xenophobic. This is far from the truth, and only proves how hypocritical and out of touch the minister really is.”
Lastly, Mr Darville said he could not support a bill that disregards the thousands of Bahamians who work hard each day, play by the rules, and put their best foot forward when trying to achieve the Bahamian dream, only to have their dreams bought, or even given away by way of tax concessions.
He stated: “Madame President, among the many questions still left unanswered after reading the bill are: Where are the concessions for Bahamian small and medium sized businesses? Where will these so-called commercial enterprise zones be? We want details not lip service. How many Bahamians will be employed because of this bill? Do companies have to meet quotas? How do we control companies operating these zones from providing services too?
“Bahamian companies operating outside of these commercial economic zones? Who will police the activities of these persons? What about VAT and concessions in these zones? Will companies doing business with each other in these economic zones be exempted from VAT?” Mr Darville continued: “Why is the Cabinet not responsible for determining the zones, as opposed to the minister? What about Bahamian business owners outside of the zones, how do they benefit?”