INVESTING INJAMAICA 2012

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INVESTING IN JAMAICA 2012

www.tradeandinvestjamaica.org

Investing in Jamaica 20121

Jamaica Promotions Corporation

Jamaica is one of the world’s best-loved destina-tions, known for its vibrant culture and tourism, the genuine warmth of its people, its pulsating Reg-gae music and myriad of other artistic expressions, and of course its amazing world-class athletes.

Yet, the story less known about Jamaica is its grow-ing reputation and achievements in the global business landscape. �e pro-business policies of succeeding governments have resulted in high levels of foreign direct investments over the past two decades manifested in massive tourism and ICT investments, as well as signi�cant public and private investments in developing the island’s hu-man capital and physical infrastructure such as the highly modernized Port of Kingston.

Jamaica is the business hub of the Caribbean. As the third largest English speaking nation in the Western Hemisphere, Jamaica can truly a�rm that it is ready and open for business with the world. JAMPRO is the Government of Jamaica’s invest-ment and export promotion agency that connects the world’s investors with the many opportunities

to do business in the most diversi�ed economy in the English speaking Caribbean.

JAMPRO is at the forefront of promoting this message by presenting solid value propositions to global investors on the wealth of investment and trade opportunities in the key growth areas in our economy such as information and communication technology, tourism, manufacturing, agribusiness, the creative industries (�lm, music and entertain-ment), extractive mining and professional services.

Welcome to your next great opportunity.

CONTACT US:

Jamaica Promotions Corporation (JAMPRO)Head O�ce18 Trafalgar RoadKingston 10, Jamaica W.I.Tel: 1 876 978 7755, 978-3337Toll Free: 1 877 INVESTJA (468 4352) Fax: 1 876 946 0090Email: [email protected]


TABLE OF CONTENTSINVEST IN A GLOBAL BRAND 1

ECONOMIC OVERVIEW 3

Investing in Durable Recovery 4

A Safe FDI Destination 5

Vision 2030 6

Jamaica by the Numbers 7

SECTOR OVERVIEW 12

Agriculture 12

Creative Industries 13

Information & Communications Technology 14

Manufacturing 15

Infrastrcuture Development 16

Health & Wellness Tourism 17

FOCAL SECTORS 18

ICT/Business Process Outsourcing 19

Health & Wellness Tourism 21

Niche Manufacturing 25

A GUIDE TO JAMAICA’S INVESTMENT & TRADE AGREEMENTS 27

DOING BUSINESS IN JAMAICA (INCENTIVES) 30

INVESTOR SUCCESS STORIES 36

GLOBAL BRANDS OPERATING IN JAMAICA 38

ABOUT JAMAICA 43


ECONOMIC OVERVIEW

Fifty Years Strongand Building for the FutureJamaica, the largest English-speaking Caribbean Island, boasts the distinct qualities of a vibrant emerging market with enor-mous possibilities for trade and inward investment. Its com-parative advantages that attract strategic investors and tourists alike include its stunning natural beauty, its geographical loca-tion (only one hour and twenty minutes by air from Miami), a bene�cial time zone, an English-speaking skilled labour force, a strong �nancial services sector, the world’s seventh natural harbour and mineral resource endowments, as well as a spirit of enterprise and well-established traditions of democracy and accountability.

By contrast, the global economy and international trade fell by 0.6% and 10.7%, respectively, during 2009. Concurrently, ex-ternal shocks negatively impacted Jamaica’s tourism receipts, remittances and the bauxite industry. Nonetheless, the num-ber of tourist arrivals actually rose by 3.4% on an annual ba-sis, whilst many other Caribbean Islands reported signi�cant declines in 2009, demonstrating Jamaica’s economic resilience. Given benign global market conditions and the government’s commitment to prudential macroeconomic policies, Jamaica is well positioned to attract Green�eld investments.

�e country o�ers numerous foreign direct investment (FDI) opportunities in sectors such as the infrastructure develop-ment, tourism, �nancial services, beverages, agro-business, base-metal processing, construction, information communi-cation technology (ICT); and emerging sectors such as health-care and education.

Jamaica’s close proximity to the North American Free Trade Agreement-NAFTA countries (the US, Canada and Mexico) provides ample scope to attract vertical or asset-seeking FDI, which is export-oriented and involves relocating parts of the production chains to low-cost sites. �e output is mainly ex-ported to the investor’s home country and/or regional markets. Hence, FDI is una�ected by the host country’s market size. Ja-maica is an ideal place for transnational corporations (TNCs) to base their Caribbean operations and tap into the wider NAFTA markets of 448mn customers, worth some US$17 tril-lion – which forms the world’s largest trading bloc – as well as the economically strategic position of being in the vicinity of the South American continent. �is latter market represents 6% of the world’s population and is experiencing strong eco-nomic development in large part due to subsequent rounds of economic reform and liberalization. It should also be noted that Jamaica enjoys favourable access to the US market under the Caribbean Basin Trade Preferences and to Europe through the European Partnership Agreement (EPA).

Over the last few years, Jamaica has worked towards achiev-ing �scal/debt sustainability. �e country tackled its develop-ment challenges with support from 27-month IMF Standby Arrangement and budgetary support from the World Bank, the European Union (EU) and the Inter-American Develop-ment Bank (IADB) to realize �scal reform. At the core of these reforms was the new �scal responsibility framework which seeks to cut public debt to below 100% of GDP by 2015/16 (from a peak of 139.8% in 2009/10).


�e Jamaica Debt Exchange (JDX) programme involving out-standing public debt of J$1.26 trillion (US$14.2bn) was suc-cessfully concluded on February 24, 2012 with a participation rate of 99.2%. �is national initiative aimed to generate �scal savings of 3% of GDP over 2010/11 and a 70% reduction in the amount of maturing debt over the medium-term. It also extended maturities on short-term instruments by over two years and reduced the interest rates by seven and two per-centage points respectively on outstanding domestic and US dollar denominated bonds. �e �scal savings will help divert funds for social and capital spending in the coming years.

�e market’s con�dence was boosted by the JDX programme, thus Jamaica’s sovereign credit rating was upgraded to B- (with stable outlook) by Standard & Poor and Fitch Ratings. Most signi�cantly, Jamaica’s debt-servicing record is ‘untar-nished’ by defaults. �e improvement in the perception of Ja-maica’s ‘country-risk’ is re�ected in lower yields on the latest

Eurobond issue which was oversubscribed.

Nominal gross domestic product (GDP) rose by two-fold be-tween 2004/05 and 2009/10 and was projected by the IMF to reach J$1.23 trillion (US$14.2bn) in 2010/11, representing a compound annual growth rate of 20.7%. Creative entrepre-neurship, skilled-adjustable workforce and pro-business poli-cies have supported dynamic expansion in the tourism, �nan-cial services, telecoms, and leisure and distribution sectors. Although services accounted for approximately 80% of GDP in 2010 (most recent estimate), Jamaica also boasts a diversi-�ed manufacturing base. Export-free zones were created to encourage industrial diversi�cation and FDI.

Investing in Durable Recovery


1 FDI Inflows to Jamaica 2000 - 2010

Surge in Total FDI Stock, Jamaica (US$M)

Sources: UNCTAD World Investment Reports. (1) After repatriation of interest, profits and dividends (IPDs). (2) FDI stock represents the value of the share affiliate enterprise at book value or historical cost, reflecting prices at the time when the investment was made and reserves (including retained profits) attributable to the parent firm, plus net indebtedness of the affiliate to the parent company.

A Safe FDI Destination

Jamaica has a track record of implementing business re-forms that underpin private enterprise and FDI. �e FDI code encourages inward investments, guarantees capital repatriation, compensation (if a property is expropriated) and the ‘equal treatment’ of all investors with respect to �s-cal incentives. �ere are no limits on the foreign control of companies and non-residents can purchase real estate.

�e legal system upholds the sanctity of contracts. �e tax regime o�ers added incentives such as tax holidays, duty concessions on imports of capital goods and other prefer-ences targeted at key sectors – notably tourism, manufac-turing, mining/energy, infrastructure, agro-business and ICT, coupled with an investor-friendly environment.

Jamaica also enjoys a high ranking on the FDI index in quality and costs compared to other countries in the region. At the end of 2008, FDI stock as a share of GDP was 72%, well above the equivalent level for small developing coun-tries (UNCTAD, 2011).

Between 1998 and 2006 FDI in�ows made up 23% of gross capital formation in Jamaica, well above the average of 19% among small developing countries. Much of this investment has been in bauxite processing, tourism (e.g. hotels and at-tractions) and more recently in the ICT/Business Process-ing Outsourcing (BPO) sector.

Jamaica’s traditionally robust banking sector and �nancial systems have been strengthened in recent times to avert risks. Foreign investors can easily repatriate their pro�ts to their homeland, unhindered.

National Treatment is accorded to all foreign investments in Jamaica. Incentives and bene�ts abound for investors. �ese are covered under existing Bilateral Investment Trea-ties (BITs), Double Taxation Agreements (DTAs) and Mul-tilateral and Bilateral Trade Agreements with partner coun-tries.


Vision 2030 Foundation Pillars: “Jamaica, the place of choice to live, work, raise families and do business.” Foreign Direct Investments do well in Jamaica because of stable government and an enabling business environment. The Government of Jamaica is committed to realizing the Vision 2030 Plan of “making Jamaica, the place to live, work, raise families and do business’.

]amaica has

• a robust productive economy that drives the people to full self-actualization

• human development that builds world class education (especially in science and technology and health services)

• effective governance and public institutions to channel resources to priority sectors with the highest returns and

• secure and improved access to an effective social safety net that facilitates a decent and respectable life for its citizens.

Below: The world-class Falmouth cruise ship port.


Jamaica by The Numbers

1 KEY MACROECONOMIC AND FINANCIAL INDICATORS

Projections

2008/09 2009/10 2010/11 2011/12 2012/13

Nominal Gross Domestic Product (GDP)

GDP (in billions of Jamaica Dollars)(1) 1,028 1,112 1,234 1,356 1,477

GDP (in millions of U.S. dollars) 13,586 12,510 14,211 15,256 16,400

Nominal GDP growth (annual % chg) 12.1 8.2 11.0 10.0 9.0

Consumer Prices 20.2 9.7 11.1 7.0 5.5

Real GDP growth (annual % chg) -1.7 -2.5 -0.1 1.8 2.0

Gross Fixed Capital Formation (%) of GDP 25.0 26.0 27.0 27.5 28.0

Government Operations (%) of GDP

Budgetary Revenue and Grants 26.9 27.0 26.0 26.2 26.3

Total Expenditure 34.3 37.9 32.3 28.5 26.5

o/w: Primary Expenditure 22.0 20.9 21.1 19.3 18.9

Overall Fiscal Balance -7.4 -10.9 -6.3 -2.3 -0.2

Gross Financing Needs, J$ billions 180.7 290.6 179.2 152.1 -

Government Debt, excl. IMF, J$ billions 1,119 1,266 1,361 1,406 -

Public Sector Debt (%) of GDP 108.8 113.8 110.3 103.7 -

Treasury Bill Rate (%), end-of-period 21.5 10.5 7.5 6.0 5.0

Sources: IMF, Jamaican authorities and private estimates, (1) JAMAICA has the second-largest GDP of the Commonwealth Caribbean after Trinidad and Tobago. N.B Fiscal years run from April 1st to March 31.


2 BALANCE OF PAYMENTS AND EXTERNAL DEBT

(in US$MN, unless otherwise indicated) Projections

2008/09 2009/10 2010/11 2011/12 2012/13

Exports, f.o.b. 2,315 1,406 1,648 1,939 2,202

Imports, f.o.b. 6,786 4,425 4,920 5,314 7,280

Merchandise Trade Balance -4,471 -3,019 -3,272 -3,375 -5,078

Total Foreign Trade (%) of GDP 67.0 46.6 46.2 47.5 57.8

Tourism Receipt 1,939 1,964 1,960 2,212

Private Transfers (net) 1,955 1,761 1,905 1,913

Current Account Balance -2,497 -932 -1,100 -1,017 -984

(as percent of GDP) -18.4 -7.4 -7.7 -6.7 -6.0

Gross External Financing Need 3000 1300 1500 1600 1700

(as per cent of GDP) 22.1 10.4 10.5 10.4 10.3

Gross International Reserves 1,644 2,434 3,268 3,602 3,494

FX Reserves (in months of imports) 2.9 6.3 8.0 8.1 5.7

Public External Debt 6,983 8,569 9,947 10,480 11,267

Total Debt Stock (%) of GDP 51.4 68.5 70.0 68.7 65.4

External Debt Services 1,438 685.7 503.7 846.5 960.8

Debt Service ratio (%) (1) 33.6 16.8 11.9 17.2 18.4

Sources: IMF, World Bank, Jamaican authorities and private estimates. (1) Scheduled debt service (principal and interest) as % of total export. Main export commodities: Alumina, Bauxite, Sugar, Rum, Coffee, Yams, Beverages, Chemicals, Wearing/Apparel, Mineral fuels. Main import commodities: Food and other consumer goods, Industrial supplies, Fuels, Parts & accessories of capital goods, Machinery & Transport equip, Construction materials.


3 FINANCIAL SECTOR INDICATORS (1) (in percent)

Mar-11 Jun-11 Sept-11 Dec-11

Balance Sheet Growth (yr-on-yr)

Capital Base 5.5 3.8 0.1 3.5

Non-performing Loans (NPLs) (2) 32.6 43.5 46.3 43.9

Liquidity

Loans/Deposits Ratio 67.4 68.2 67.7 68.6

Asset Quality

Provisions for Bad Debts/NPLs 81.4 79.1 77.9 75.2

NPLs to Total Loans 7.5 8.4 6.5 8.9

Capital Base

Capital Base/Total Assets 10.8 10.8 10.7 10.8

Capital Adequacy Ratio (CAR) 17.6 17.5 16.2 15.9

Profitability

Pre-Tax Profit Margin 26.1 18.0 21.8 49.0

Return on Assets 0.8 0.5 0.6 2.0

Source: The Bank of Jamaica (1) Includes Commercial Banks, Merchant Banks and Building Societies. (2) Non-performing loans are bad debts - (typical in interest arrears for 90 days or more). Banks are required to cover these credit losses commonly referred to as “Expected Losses” on an ongoing basis by provision & write-offs.


4 JAMAICA’S BUSINESS DATA

Latin America OECDJamaica and Caribbean Average

Starting a business

Procedures (number) 23 9 5Duration (days) 6 54 12Cost(% of GNI per capita) 7 37.3 4.7Paid in min. capital (% of per capita) 0 4.3 14.1

Dealing with Construction Permits

Procedures (number) 49 14 14Duration (days) 8 221 152Cost (% of income per capita) 227.5 160.3 45.7

Registering Property 103

Procedures (number) 6 7 5Duration (days) 37 66 31Cost (% of property value) 7.5 5.9 4.4

Paying Taxes 172

Payments (number per year) 72 32 13Time (hours per year) 414 382 186Profit Tax (%) 25.6 19.9 15.4Labour tax and contribution (%) 13 14.6 24Other taxes (%) 7 13.2 3.2Total Tax Rate (% profit) 45.6 47.7 42.7

Trading Across Borders 97

Documents for export (number) 6 6 4Time for export (days) 21 18 10Cost to export (US$ per container) 1,410 1,257 1,032Documents for import (number) 6 7 5Time for import (days) 22 20 11Cost to import (US$ per container) 1,420 1,546 1,085

Enforcing Contracts 126

Procedures (number) 35 40 31Duration (days) 655 708 518Cost to enforce; in (%) of claim 45.6 31.2 19.7


Latin America OECDJamaica and Caribbean Average

Protecting Investors

Extent of Disclosure index(1) 4.0 4.1 6.0Extent of director liability index (1) 8.0 5.3 5.2Ease of shareholder suit index(1) 4.0 6.0 6.8Strength of investor protection index (1) 5.3 5.1 6.0

Getting Credit

Strength of Legal rights index(1) 8.0 5.5 6.0Depth of credit information index(2) 0.0 3.3 4.7Public registry coverage (% adults) 0.0 10.1 8.0Private bureau coverage (% adults) 0.0 31.5 61.0

Closing a business

Time (years) 1.1 3.3 1.7Cost (%) of estate 18.0 15.9 9.1Recovery rate, cents on dollar 65.1 32.8 69.1

Source: World Bank Doing Business 2011 Report(1) (0 -10) – Most 10; Least 0-1. (2) (0-6) – Scope and accessibility of credit information distributed by public credit registries and private credit

bureaus; Most 6; Least 0-

Exports, f.o.b. 2,315 1,406 1,648 1,939 2,202


AGRICULTURE

The Agricultural sector has traditionally made an enormous contribution to the Jamaican economy and will continue to play an important role in the country’s future prosperity and prospective revenues. There are roughly 2.7 million acres of land in the country, of which 17% or 450,000 acres are considered arable.

Traditional and non-traditional agricultural exports have generated some US$100mn per annum for the island over the last five years. Given the effects of globalisation and competing market demands, there are many ways that the sector can be diversified in order to improve its competitive advantage. The Government of Jamaica supports this whilst ensuring that consistently high traditional exports such as coffee are maintained; focus is also being placed on increasing resources in areas such as organic farming, biotechnology and aquaculture, which enable the cultivation

of plants that contain nutrients which can be extracted for the neutraceutical and functional foods industries.

The demand from overseas, as well as from the tourist trade, means that there will be a need for expansion and improved efficiency in the industry. Agriculture currently contributes 5.6% to the Jamaican economy and employs over 18% of the workforce, which is likely to increase as Jamaican products such as rum and coffee enjoy increasing marketability around the world. For example, shrimp production accounts for 80% of tourism consumption. With this high demand, which is likely to grow with the tourism industry, there is a need for investment in facilities that can farm shrimp on a sustainable basis to levels that are sufficient to meet current and future demand.

Sector Overview

CREATIVE INDUSTRIES

Jamaica’s reputation as the ‘cultural Mecca of the Caribbean’ has positioned the island’s Creative Industries as a key revenue generator with strong linkages to other areas of the economy. The island’s success in this regard is clearly demonstrated in its many creative offerings, which promote Jamaican culture and inventiveness to the world. The Creative Industries are those sectors that are born out of individual creativity, skill

and talent and have the potential for wealth and job creation through the generation and exploitation of intellectual property. Chief among the core areas encompassed by the Creative Industries are Film, Music, Fashion and Sports.


FilmJamaica, with its cascading waterfalls, incredible beaches, green rolling mountains, caves, lagoons, mini-jungles, varied architecture and diverse flora and fauna, has been a premier choice for film production for over 50 years. The more than 3,200 projects that have been shot in Jamaica, which range from full length features and documentaries to television series and music videos, confirm the island’s status as a great film location.

MusicReggae music is the pulse of Jamaica. The vibrant expression of the Jamaican spirit is captured in the music, which has given the world some of its greatest artistes, producers and sound engineers. As the capital of reggae, Jamaica is home to a multi-billion dollar industry; few countries can lay claim to being as popular or as influential in the global entertainment industry.

Today, Jamaica has the largest number of recording studios per square mile worldwide. Many are outfitted with state-of-the-art equipment and operated by highly skilled and reputable producers and trained technicians. The studios include Arrows Recording, Studio One, Big Yard, Harmony House, Penthouse Recordings, the Marley family’s Tuff Gong Studios and Gee Jam Studios. The presence of these studios has resulted in dozens of new releases each day, the most per capita in the world. Jamaican producers and engineers continue to record for not only the local market, but the international market as well. The original version of the popular 2010 FIFA World Cup anthem ‘Wave your Flag’ was recorded in Jamaica at Tuff Gong Studios.

FashionJamaicans are vibrant people with a strong, creative spirit that resounds throughout the world. This is uniquely captured and expressed in our fashion, which utilises a kaleidoscope of colours and a plethora of patterns and shapes that are distinctly Caribbean and reflective of our historical and cultural experiences complemented by the beauty of the people and its connection to reggae and dancehall in the music industry, Jamaican fashion is one of the fastest growing of the Creative Industries. The island’s annual fashion calendar boasts two major events – Saint International’s Style Week Jamaica and Fashion Block, and Caribbean Fashion Week produced by the Pulse Entertainment Group.

SportsA solid track record of excellence through the decades has earned Jamaica the undisputed title of ‘The Sprint Capital of the World’. The name Usain Bolt looms large in the international athletics arena, and has taken Brand Jamaica to the world. Jamaica’s prowess is clearly demonstrated in other areas of sport.

The island is home to the Reggae Boyz, the highest-ranked football team in the English-speaking Caribbean and qualifiers in the 1998 FIFA World Cup in France, and the Sunshine Girls, who consistently rank among the top four netball teams in the world.

As a tropical country, Jamaica defied the odds in the 1994 Winter Olympics by finishing 14th place in the bobsled competition, ahead of the United States and Russia. Jamaica has also produced top cricketers such as George Headley, Michael Holding, Courtney Walsh and Chris Gayle.

CREATIVE INDUSTRIES cont’d


INFORMATION & COMMUNICATIONS TECHNOLOGY

Jamaica’s world-class and robust telecoms infrastructure supports all the requirements for global connectivity and ranks among the most developed in the world when compared to the US and UK. Jamaica has the highest tele-density rate in the entire Latin America and Caribbean (LAC) region, while mobile penetration exceeds the rest of the Caribbean and rivals many developed nations in the World. Other key features of the local telecoms landscape include:

• Ample bandwidth capacity as a result of multiple telecoms providers offering a wide choice of circuits, including T1, DS3 and OC3.

• Three major broadband carriers that provide triple redundancy and 99.99% up-time on broadband services. Broadband penetration stands at over 35%, with accessibility from anywhere in the island

• Multiple mobile service providers offer 3G, 4G, WiMax and international roaming capabilities. The island’s extended Fibralink submarine cable network provides reliable delivery of business and broadband traffic. Three parallel fibre routes (and drop off points) on the island link to the Americas Region Caribbean Ring System (ARCOS-1) submarine cable in the Dominican Republic. This provides seamless connectivity to North America, Latin America and the Caribbean. There is also a complete fibre ring around Jamaica, with fully digital networks.

Jamaica has emerged as the leading contact centre location in the English-speaking Caribbean with over 10,000 full time agents in the offshore business process outsourcing (BPO) sector. With an established track record in finance &accounting, human resource outsourcing (HRO), receivables management, technical helpdesk support, outbound sales and lead generation, Jamaica has been recognised by Gartner as a destination to watch and by A.T.

Kearney as a favourable BPO destination. With near shore access to the US, low attrition rates and high labour force availability among secondary and university graduates (over 20%), Jamaica provides great value to the investor looking for a BPO destination. These advantages, as well as the fact that the government has demonstrated its support for this priority sector, have kept industry heavyweights such ACS (Xerox), Teleperformance and West Corporation operating in the island for almost a decade.

Why Jamaica for Outsourcing?• Close to the United States

• Educated English speaking workforce

• Dedicated and productive workers

• Competitive business costs

• Priority on improving Data security

• Excellent telecoms infrastructure

• Established track record in BPO

• Strong government support for ICT

• Stable business climate

• Great quality of life


MANUFACTURING

From Agro-processing, bedding and leather to stone and clay products, Jamaica boasts a diverse array of manufacturing enterprises. Manufacturing is very important to Jamaica’s economy, as it contributes more than US$700 million in foreign exchange earnings and represents 8.3% of the country’s gross domestic product (GDP). The sector includes small, medium and large enterprises which manufacture for both the domestic and export markets. Many of Jamaica’s manufactured brands are well recognised internationally and have become synonymous with excellence.

There is the pontential for huge growth in this sector; with the services in general (which includes most sub sectors under Manufacturing) composing more than 70% of GDP. Currently the government has embarked on a drive to position the island as a major logistics point, manufacturing hub, and international multi-modal centre; improving the environment for both local and foreign manufacturers.

In the foods sector, the distinctive flavour of Jamaica’s raw material inputs goes into the making of palate-pleasing end products that are delicious and unique. Companies such as Jamaica Producers (chips and fresh produce), Jablum (coffee), LASCO (soy based milk products) have produced goods that are enjoyed internationally.

In the spirits sector, Jamaica continues to grow in market share with an 11.3% increase in the export earnings during the 2009 period. Red Stripe beer; perhaps the country’s best known brand, is exported to many countries across the

globe. Similarly, the world-renowned Appleton Estate Rum continues to grow its international sales with its range of products.

Tobacco continues to be a significant contributor to Jamaica’s export industry, with players such as Adduci Cigars making strides and embarking on a US$50mn expansion plan as part of its efforts to become a premier brand in the international cigar market. The company is actively seeking investment partners to assist them with their expansion and international promotion.

Jamaica presents tremendous value for investors in the manufacturing and/or logistics arena and is open and ready for business. These are the key advantages:

• Strategic location within major shipping lanes

• The ability to dock the largest ships coming through the new Panama Canal

•Vast tracts of available land within minutes of the Port of Kingston

•Close proximity to the North American and Latin American markets

• Enviable market access through strategic bilateral agreements


INFRASTRUCTURE DEVELOPMENT

In recent years Jamaica has invested millions of dollars in upgrading the country’s infrastructure as well as attracting foreign investment into the sector. The successful development of any region or country requires the solid underpinning of quality infrastructure and the availability of services to enable businesses to operate.

Infrastructural improvements such as the construction of Highway 2000, which links the south and north coast of the island, as well as the revamping of the island’s airports and seaports, have created a number of investment opportunities in the area of logistics and trans-shipment management, tour operations and other professional services.

The north coast has also experienced significant development, especially in the area of tourism and hospitality. The Montego Bay Convention Centre was completed in January 2011 at a cost of US$45mn. In its first year of operation, the venue significantly enhanced the stock of banquet and conference facilities in the tourist capital of Montego Bay and has hosted large scale international events. Other infrastructural developments in the tourism sector include the construction of the Falmouth cruise pier in Trelawny, which welcomed its first mega cruise ship with 4500 passengers and crew members on February 17, 2011

Jamaica’s main airport, the Norman Manley International Airport (NMIA) in Kingston, has recently undergone a US$140mn modernization programme and presently serves over 1.7 million passengers per year. Similarly, a US$200mn investment package has been ploughed into the redevelopment and modernisation of the Sangster International Airport (SIA) in Montego Bay which has transformed into one of the busiest airports in the Caribbean, serving over 3.3 million passengers per year.

Jamaica is also positioning itself as the main multi-modal hub in the region. Leveraging its port and logistics capacity and proximity to key markets, investors are being sought to partner in the redevelopment of the Vernamfield property into a major air cargo hub, aircraft maintenance and aviation training facility, as well as a local military base. Current capacity at the property includes a 5,000-foot concrete runway.

In the short term, there are plans to develop the Tinson Pen Aerodrome in Kingston into a logistics centre with display rooms and storage space. The Tinson Pen development is envisaged to generate sustainable income by attracting and providing a wide range of logistics and promotional services to the international trade community, thereby broadening the revenue streams of the Port Authority of Jamaica.

Within Kingston, there are a number of ongoing and prospective redevelopment plans. New Kingston, the main business district, is growing rapidly, with major businesses moving into the available office space. Downtown Kingston, the old city centre, offers tremendous opportunities for redevelopment, including the buildings, transport network, sanitation and waste management services, and the associated tourism industry that would naturally be generated by such development. Other proposed developments include the Ward Theatre Cultural Square and various new hotels and conference centres. It is expected that the overall investment will top US$5bn.

Infrastructural and service development is on the cusp of serious expansion in Jamaica, in order to meet the growing needs of various industries. Investment in this area in the short to medium term is very likely to prove wise and generate sustainable, long-term returns.


TOURISM

When it comes to breathtakingly beautiful scenery, luxury surroundings and warm hospitality, Jamaica has established itself as one of the must-visit destinations in the world. As the global economic climate improves in coming years, tourism investments in Jamaica are likely to grow. Sites and businesses relating to tourism that are currently available will be bought, and existing investors will reap the rewards of prudent timing.

Health & Wellness Tourism

With the global health tourism sector valued at US$40 billion in 2005 and projections indicating that 1.2 million medical tourists would travel from the USA in 2012, Jamaica is ideally poised to attract value-added investments in this area.

Investments in the health and wellness sector would enjoy the benefit of leveraging the presence of highly trained medical professionals in Jamaica, as well as the high quality of medical training that may be accessed locally. Jamaica also provides a ‘near shore’ advantage given its close proximity to North American markets, where high medical costs and ease of travel make it an attractive location for accessing health care and wellness services.

The Government of Jamaica is also developing a Health and Wellness Tourism Roadmap to guide investments within the sector, as well as to drive exports of value-added niche products and services. The Milk River Spa, which has been compared to the world famous Lucerne Spa in Switzerland, is part of the government’s Millennium Project, and with capital investment could offer a world-class service with established, sustainable customer flows.

Falmouth, Jamaica’s Newest Cruise Destination

The historic town of Falmouth, located just over 15 miles out of Montego Bay is a hot, new location for the world cruise shipping industry. The Falmouth cruise ship pier can host the world’s largest ship, the ‘Oasis of the Seas’.

Cruise passengers will be transported back in history to the island’s British colonial past through the town’s beautiful Georgian architecture. Falmouth’s proximity to the resort towns of Montego Bay and Ocho Rios will also allow for access to other exciting attractions. An integrated tourism system is being encouraged whereby cruise line operators, accommodation, tour operators and activity providers work together to attract as many tourists as possible, for as long as possible, maximising the revenue from them whilst they are in the island.


Over the course of the last decade, Jamaica has made immense strides in developing its Information and Communications Technology (ICT) infrastructure. Today, the island is a highly competitive and attractive business destination and a regional leader in Information Technology Export Services (ITES).

As the largest English speaking territory in the Caribbean, Jamaica is the region’s leading contact centre location with over 30 information communications technology/business process outsourcing (ICT/BPO) companies operating in the country employing 11,500 full time agents.

WHY JAMAICA?• Near shore advantage to major markets

• Close proximity to the USA, Latin America and Europe, with three international airports giving access to major international gateways.

• The country is also on the Eastern Standard Time (EST) Zone

• English speaking, talented, productive and hospitable labour force.

• Competitive wage rates 40 to 60 per cent lower than corresponding salaries in the USA.

• Established reputation in the global ICT/BPOS

• Jamaica is the only English-speaking country in the Caribbean included in the top 50 destinations for outsourcing activities by AT Kearney in 2011.

Kingston, Jamaica’s capital city was ranked fifth out of 22 BPO locations in Latin America and the Caribbean by business development analytics firm Zagada Institute in the first quarter of 2011.

Visionary Government • Successive governments have embraced ICT as a major

engine for economic growth and employment. High levels of investment in communications infrastructure, financing, education, transportation and facilities ensure that infrastructure is in place to secure the continued growth of the sector.

State of the art infrastructure• The highest tele-density rate in the region

(over 109%) which is bolstered by robust ICT infrastructure and ample redundancy.

• Island-wide fiber coverage and multiple sub-sea fibre links with connections to the world also with built in redundancy.

• A range of high speed circuits inclusive of TI and OC3 to meet a wide range of technical requirements

• Top-flight transportation centres in the major city hubs and a road infrastructure that is first world and facilitates ease of commute for employees to their jobsites.

Focal SectorsFocal SectorsFocal SectorsICT/Business Process

It is Jamaica for Convergys. One of the largest agent assisted companies in the world will employ nearly 1000 persons when its first call centre is established on the island in 2013.

“We are delighted to be opening our first contact centre in Jamaica.”“We believe the centre will benefit not only Jamaicans with attractive jobs but also our client with new options for near shore, agent assisted English speaking customer service, including traditional phone, email, and chat support. In addition, Montego Bay is a top tourist destination and its residents have a strong customer service orientation from supporting the tourism there.”

Andrea Ayers,President and COOConvergys Customer Management Business


Financing available for property developers and BPO operators• Property developers and BPO operators may

now access the US$20 million ICT infrastructure loan facility established through the Development Bank of Jamaica. This financing support is being provided in order to develop at least 350,000 square feet of appropriate ICT-ready space to accommodate tier one operators in the ICT/BPO sector. The line of credit will be funded by a loan from the Petro Caribe Development Fund.

Space available• Operating space is readily available within

minutes from the major airports and ports especially from the Free Zones.

Capacity Development• The Government’s National Training Agency,

HEART has been working closely with the ICT/BPO industry to develop core curricula through to Bachelor’s Degree programmes specific to the needs of the sector. The island’s leading Universities also have a range of curricula at the degree and post graduate levels that also support the sector.

Cyber Legislation • Comprehensive cyber crimes legislation is in

place. The police force has a team of highly specialized and trained personnel who work exclusively in this area.

High ranking on FDI Index • Jamaica has a long and successful history of

attracting Foreign Direct Investment (FDI). In fact it enjoys a high ranking on the FDI index in terms of quality and costs compared to other countries in the region. At the end of 2008 FDI stock as a share of GDP was 72%, well above the equivalent level for small developing countries (UNCTAD, 2011). Between 1998 and 2006 FDI inflows made up 23% of gross capital formation in Jamaica which is well above the average of 19% among small developing countries.


Focal SectorFocal SectorFocal Sector

A Winning DestinationJamaica scores as a compelling location for investment in Health and Wellness Tourism. The island’s natural beauty and the hospitality of its people, matched by a world class cadre of medical professionals, spa and diagnostic facilities as well as cost-effective near shore advantage to the US and other markets, make the country well poised to become a leader in the multi-billion dollar industry.

Around the world people are paying closer attention to personal health and wellness, and along with this, there is a growing interest to travel in order to achieve wellness goals.

1 Main Segments in Health and Wellness (Medical) Tourism

HEALTH & WELLNESS TOURISM

The health and wellness sector has diverse sub-sectors, including hotels, hospitals, clinics, wellness

centres, care homes and tourist facilities. Small and medium

sized businesses as well as large-scale domestic and international

enterprises and institutions are involved in the sector.


Why Invest In Health and Wellness Tourism?

2 Jamaica’s value proposition for investing in Health and Wellness (Medical) Tourism

Near shore and convenient access to USA – 2-3 hours away, Caribbean and Latin American regions. Quality, healthy, relaxed environment.

Jamaican talent, education, skills, productivity, inter-personal skills, caring ethos, renowned quality of nurses, positive attitudes and pride in work, English language and accent, cultural affinity with USA, competitive labour costs and flexible work culture.

Modern facilities, networks of partners in existing hotels, resorts, universities. Government support and incentives.

According to Tourism Research and Marketing (TRAM), an independent tourism consultancy, the global value of Health and Wellness Tourism (also referred to as Medical Tourism) in 2010 was estimated at over US40 billion. Based on the rising cost of healthcare, it is expected that the number of medical tourists will grow significantly in the coming years. Most of the global medical tourists are from some of Jamaica’s more established tourism markets, namely the US, Canada, the United Kingdom, Germany, as well as the Middle East.

Building on its competitive advantages, Jamaica is keen on promoting new top tier value tourism segments, of which medical tourism is a key focus. This segment of the tourism sector has shown the strongest growth and value; with the average medical tourist estimated to spend upwards of US$300 per night, US$200 more than the average estimated spend of stopover visitors.

Jamaica’s proximity to the large US market with its ageing population and high cost of medical care, as well as its established tourism product with excellent hotel and tourism services and low labour cost, positions the country to take full advantage of opportunities in health and wellness (medical) tourism. Near shore and Convenient Access to the US

According to a recent study conducted by Deloitte & Touche, as many as 1.6 million Americans could be travelling in 2012 for medical tourism, spending billions of dollars in the process. By air, Jamaica is one to three hours away from the US, one of the largest markets for outbound medical tourists in the world. The island is in the Eastern Standard Time zone, making it convenient for doing business with US, Latin America, and the Caribbean.

Strong Market Potential

Jamaica’s tourism product is unmatched in the region and the industry continues to deliver impressive growth.

• Two million stopover tourists annually.

• One million cruise ship passengers annually.

• In 2010, 1.2 million Americans visited the island.

• Over 30% of stopover visitors are age 50 and over

• A large Diaspora market of over 2 million, mostly in North America and the UK .

Trained health and wellness practionersOver

2,0002007031with the Jamaican Medical Council

PRIVATE PRACTICE PHYSICIANS

REIKI PRACTIONERS

REFELXOLOGISTS

REGISTERED RADIOLOGISTS

50• Several Ayurvedic

doctors

• A host of traditional Chinese doctors

• A plethora of practitioners with traditional wellness knowledge and training.

• Dieticians and a wide range other specialists

YOGA TEACHERS


A World Leader in TourismJamaica, which is home to prestigious local and international hotel brands, boasts a sterling track record of excellence in tourism and enjoys a strong country brand with significant global appeal and influence.

The country’s English-speaking workforce, which has a strong cultural affinity to the US, is well known for its outstanding hospitality and customer service.

Qualified, Cost Competitive Labour ForceJamaica has steadily produced accomplished scientists, wellness and medical professionals, who possess the competencies and experience for the development of a vibrant health and wellness tourism sector. These professionals already deliver high quality healthcare and wellness services at costs significantly lower than in the home country of medical tourists.

In 2010, the University of the West Indies, the Caribbean’s leading training institution for medical professionals, matriculated 211 nurses (B.Sc. in Nursing) and 175 doctors (B.Sc. in Medicine and Surgery). The institution also offers specialist training in Gerontology and graduate training in Sports and Exercise Medicine (Physiotherapy). The College of Health Sciences at the University of Technology offers programmes with an emphasis on Medical, Dental and Sports Sciences.

IncentivesThere are special tourism incentives, which may also apply to investors in medical tourism.

• The Government allows the import of a number of different goods without duties, and there is a five-year exemption on corporate tax for investors;

• The Hotels (Incentives) Act provides income tax relief and import duty concessions for up to ten years for approved hotel enterprises, and 15 years for convention-type hotels;

• The Resort Cottages (Incentives) Act provides resort cottages with income tax relief for up to seven years and import duty concessions on imported building materials and furnishings.

OpportunitiesHealth and wellness tourism represents a strong growth engine for the country, and the Government is committed to maintaining the right environment for the development of the industry.

The most dominant market segments in the health tourism industry include:

• Complex specialised surgeries such as joint replacement (knee/hip)

• Cardiac surgery

• Dental surgery

• Cosmetic surgeries

Additionally, medical tourists are increasingly travelling to undergo transplants (liver, kidney, and lung), diagnostics, executive wellness exams and screenings, as well as IVF (in vitro fertilization) treatments.

The Government of Jamaica is also interested in promoting opportunities in medical insurance claims processing to leverage Jamaica’s success in the Business Process Outsourcing (BPO) sector; medical tourism facilitation/brokerage; wellness centres; and care facilities.

There are a few modern, beautifully appointed hotels/spas in Jamaica offering wellness tourism. There are also other wellness centres in Kingston and other major towns such as Montego Bay, Mandeville and Ocho Rios. Greater scope exists for formalising traditional wellness programmes that utilise local and indigenous herbal remedies and practices.

There are several small, privately run nursing homes that provide care for the elderly in Jamaica, and there is significant opportunity for further development. Plans are currently being developed for retirement villages; rehabilitation centres, sports therapy/physiology facilities and palliative care clinics.


Investment potential that deliversJamaica is a premium investment destination for investment in manufacturing. This is primarily due to the country’s cost competitiveness, its strategic location to North America, the Caribbean and South American markets, a highly qualified, skilled and productive labour force, as well as enviable market access rooted in a number of strategic bilateral arrangements.

Why Jamaica?• Near shore access and convenience to USA,

Caribbean and Latin American markets • Modern port, transport and short delivery times• Doing business in Jamaica is an easy 1 hour and 20

minutes flight from Miami• Extensive network of suppliers to meet your needs• Proactive and involved stakeholders• English speaking, well educated, skilled labour• Competitive labour costs and great productivity• High ranking on the FDI Intelligence Index (quality

and costs) compared to countries in the region

The Opportunities“The manufacturing sector today plays a key role in Jamaica’s economic and social development. It is critical to employment, wealth creation and socio-economic development and accounts for 19% of total employment, US$ 723 million in exports and contributes 8.3% of GDP” (Jamaica Manufacturers’ Association - JMA, ‘Manufacturing Matters’).

Jamaica is placing a stronger focus on manufacturing, off shoring, near shoring, and non-equity modes (NEMs) of production such as contract manufacturing. Competitive sub-sectors such as niche manufacturing which is a key driver of innovation and technological advancement is also high on the national agenda. These include medical devices and non equity modes (NEMs) of international production.

Whether you are a large or small manufacturer, manufacturers of niche or mass products, heavy or light manufacturer, or an assembly house, there is an opportunity for you right here in Jamaica.

Focal SectorsFocal SectorsFocal SectorsFocal SectorsNICHE MANUFACTURING

MarketScale and Convenient Access to USA and Caribbean and

Latin America• NearShore+Short

Delivery Times, Competitive Transport Costs

Jamaican

PeopleEducation, Skills, Productivity,

Inter-personal Skills, Energetic and Articulate, Self Development Ethos, Positive Attitudes and Pride in Work, Attrition Rates Low, English Language, Cultural Affinity

with USA, Competitive Labour Costs and Flexible Work

Culture

NetworksModern Logistics

Infrastructure to Support Supply Chain.

Jamaica - A prime destination for Niche Manufacturing


Incentives• The Export Industry Encouragement Act provides

qualified firms 10 years income tax relief, plus exemptions on duty for imported machinery and raw materials.

• A range of benefits, incentives and relief for companies that operate in any of Jamaica’s Free Zones, including duty waivers and tax breaks

Medical Devices. A host of manufacturing possibilitiesThe global market for the ten most important segments of the medical devices industry was estimated to be worth $164 billion in 2010 and expected to grow to $228 billion by 2015. The ten major revenue generators for the industry included in these estimates are cardiovascular, orthopaedic, diagnostic imaging, minimally invasive devices, diabetes care, anaesthesia and respiratory care, dialysis products, ophthalmology devices, patient monitoring devices and point-of-care diagnostic devices.

In choosing Jamaica for medical devices manufacturing investors can count on cost competitiveness and other core advantages in relation to other Caribbean and Central American countries.

The opportunities include:

Medical disposables e.g., surgical drapes and gowns, gloves, syringes and needles, catheters, wound care products, colostomy and incontinence products, and blood bags.

Medical equipment e.g. orthopaedic implants, pacemakers, stents, surgical instruments, medical instruments, heart valves

Diagnostic substances which are often incorporated into a device, as in, for example, a pregnancy test.

Non-equity Modes (NEMs) Jamaica is also working at implementing policies aimed at improving the business investment climate and integrating the economy into global value chains. To this end we look forward to welcoming non-equity modes (NEMs) of international production that can further yield significant development benefits. These include contract manufacturing, services outsourcing, contract farming, franchising, licensing, management contracts, and other types of contractual relationship.

Globally, there is increased cross-border NEM activity which is estimated to have generated over $2 trillion of sales in 2009 of which contract manufacturing and services outsourcing accounted for $1.1–1.3 trillion, franchising $330–350 billion, licensing $340–360 billion, and management contracts around $100 billion.


A GUIDE TO JAMAICA’S INVESTMENT & TRADE AGREEMENTSAs an open economy, Jamaica has negotiated and entered into several Bilateral Investment Treaties (BITS) and Double Taxation Agreements (DTAs) with various countries to facilitate the smooth inward flow of business. These agreements have greatly contributed to Jamaica’s solid reputation as an attractive, investor-friendly destination for transnational business, as evidenced by the growing interest in the island by investors seeking to establish hotel developments and Business Process Outsourcing (BPO) operations.

Jamaica is also an active partner in many multilateral trade agreements that allow goods made in Jamaica, mainly with Jamaican inputs, to enter partner countries duty free.1 In some cases too, Jamaica will also receive select goods from its trading partners under special tax reduction arrangements.

Here is a quick guide to the critical agreements that exist between Jamaica and its trading and investment partner countries that will easily facilitate your efforts to establish a business in Jamaica and, or export from Jamaica.

THE UMBRELLA OF BILATERAL INVESTMENT TREATIES (BITS)

BITs will allow a company from a country with whom Jamaica has signed such a treaty to easily set up a business in Jamaica. BITs generally extend a raft of benefits to investors; but more specifically, if you are setting up a business in Jamaica, they will allow your company to:

• be accorded the same protection as any Jamaica business under the National Treatment law

• be exempt from any act of expropriation by the government of the host country

• repatriate profits generated in the host country

1 In most cases, conditions apply under the Goods of Origin Rule contained in each agreement.

• be absolutely secure in business operations – once conducted within the boundaries of Jamaican laws

• be confident in having an opportunity to explore dispute settlement through local tribunal/arbitrators

Jamaica’s Current BITs Partners2

• Belgium & Luxembourg• Colombia• Cuba• Iceland• Germany• Malaysia • Zimbabe• Swiss Confederation• Turkey• Mauritius• People’s Republic of China• Egypt• Nigeria• The Netherlands• Spain• United States of America• Switzerland• United Kingdom• France• Ghana• India• Indonesia• Italy• Singapore• Kuwait• Sri Lanka• Venezuela

2 List of BITs & DTAs provided by courtesy of the Ministry of Foreign A�airs & Foreign Trade, Jamaica.


JAMAICA – NO DOUBLE TAXATION

The Double Taxation Agreements (or DTAs) signed between Jamaica and its partner countries will protect you as a foreign investor from the burden of being taxed on your income in your home country (where the business principals reside) and also in Jamaica. Hence, once there is a DTA signed between Jamaica and your country, you and your company can be assured of exemption from paying taxes on income and/or capital in your country of residence as it relates to profit on income from trading in Jamaica (depending on the terms of the agreement between your country of residence and Jamaica). Investors are exempt from paying taxes on income and/or capital in both states (that is the country of residence and the source country).3

OPPORTUNITIES FOR INVESTORS - KEY FEATURES OF MAJOR TRADE AGREEMENTS

Jamaica’s major trade agreements with select partners such as the European Union, Canada, the United States and CARICOM provide a range of opportunities to the landed investor seeking to export from Jamaica to these trading partners.4 To access these privileges, goods from Jamaica destined for the free-trade areas are required to meet local standards and regulations in the importing country governing ingredients, labelling and packaging.

The European Partnership Agreement (EPA)

o The EPA accords immediate duty-free/quota-free market access for all CARIFORUM goods into the EU except sugar.5

o With the added element of services as tradable under the EPA, Jamaican professionals will be able to offer their services to the EU – whether virtually or if grant-ed temporary work permits to work in the region. Services include the creative and entertainment in-dustries.6 The agreement also includes an Exclusions

3 Jamaica does not impose taxes on capital. Note that tax avoidance is a serious o�ence in Jamaica, punishable under the law. Some countries also have additional agreements of Cooperation and Exchange of Information on foreign entities doing business in their country as an annex to the DTA; Jamaica has such an agreement with the US.

4 Conditions may apply, depending on the products and inputs.5 The agreement phased liberalization over a 25-year period. Liberalization

of sugar will occur in 2015..6 European Commission: Trade: Economic Partnerships http://ec.europa.eu/

trade/wider-agenda/development/economic-partnerships/negotiations-and-agreements/#caribbean

Jamaica’s DTA Partners Agreement Type

Canada Income & Capital

China Income & Capital

Denmark Income & Capital

Germany Income & Capital

Israel Income & Capital

Norway Income & Capital

Spain Income

Sweden Income & Capital

Switzerland Income & Capital

United Kingdom Income & Capital

United States Income & Capital

CARICOM States Income & Capital

List of CARIFORUM-designated sensitive products that will not be subject to liberalization. The major exclusions are agricultural and processed agricultural products; fisher-ies products, chemicals, furniture, various industrial goods, spirits and spirituous beverages, aerated beverages and fruit juices.

o Rules of Origin have been improved to accommodate es-sential materials originating from third countries re-quired for input for manufacturers to be exported to the EU such as [processed] agricultural products, fisheries, textiles and clothing.7

Caribbean-Canada Trade Agreement (CARIBCAN)

o CARIBCAN is a preferential arrangement guaranteeing duty free access to Canada for a wide range of products ex-cluding textiles and apparel, footwear, luggage and hand-bags, leather garments, lubricating oils and methanol.

o Other items are eligible for duty-free status if they can be certified as being grown, manufactured or produced with-in the Commonwealth-Caribbean or Canada.

o Strict Rules of Origin apply to most goods to be exported from Jamaica to Canada.8

7 EU-Caribbean Economic Partnership Agreement – Brie�ng http://www.eubusiness.com/topics/trade/eu-caribbean-epa/

8 The de�nition to be designated as Caribbean as its origin is ‘having a minimum input of 60 percent of the ex-factory price of the goods (including overhead and reasonable pro�ts) originating within any of the Commonwealth Caribbean countries (or Canada)’. The goods must also be exported directly from the Caribbean to Canada with no other work carried out at foreign transshipment points.


Caribbean Basin Initiative (CBI)

The CBI comprises the Caribbean Basin Economic Recovery Act of 1983 (CBERA) and the Caribbean Basin Trade Partnership Act of 2000 (CBPTA).

Under the CBTPA, apparel manufactured in eligible CBI countries from U.S. yarns and fabric, as well as non-textile products excluded from earlier CBI legislation, will enter the United States free of quota and duty.

The CBI Act was established by the US in 1984 to provide economic aid to Jamaica (and 23 other countries in the Ca-ribbean and Central America) through the waiver of tariff benefits.1

Most products manufactured or grown in CBI beneficiary countries are eligible for duty-free entry into the United States. Some of the most successful CBI eligible products that have been developed for export by both U.S. and Caribbean Basin companies include:

⁻ Electronic and electro-mechanical assembly,

⁻ Handicrafts, giftware, and decorative accessories,

⁻ Wood products, including furniture and building mate-rials,

⁻ Recreational items, such as sporting goods and toys,

⁻ Fresh and frozen seafood,

⁻ Tropical fruit products and winter vegetables,

⁻ Ethnic and specialty foods, such as sauces, spices, li-queurs, jams, and confectionery items

⁻ Ornamental horticulture

⁻ Medical and surgical supplies Caribbean Single Market Economy (CSME)

1 US Department of Commerce. A Guide to the Caribbean Basin Initiative. Washington DC, November 2000 http://trade.gov/media/publications/pdf/cbi2000.pdf

The CSME affords Jamaican goods and persons duty free and unencumbered movement into other CSME markets. It offers Jamaicans the right to establish a business in an-other territory in the CSME without restriction.

Jamaican goods that have already entered a CSME country will also be eligible for export/import into another CSME ter-ritory without duty.

Capital from Jamaica can also circulate freely in other CSME countries.2

Jamaica has also negotiated and signed FTAs with Argentina, Colombia and the Dominican Republic.

2 The Caribbean Community (CARICOM) Secretariat. The CARICOM Single Market and Economy. http://www.caricom.org/jsp/single_market/single_market_index.jsp?menu=csme


DOING BUSINESS IN JAMAICA

FOREIGN SALES CORPORATION (FSC) ACT

Exporters may obtain substantial tax bene�ts by establishing an FSC. A Foreign Sales Corporation (FSC) is essentially a company incorporated in a foreign country that the United States quali�es as a host country. Foreign Sales Corporations are allowed to earn tax exemption on exports to the USA. As an incentive for exporting, this Act provides relief from the Common External Tari� (CET) and the General Consumption Tax (GCT) on equipment, machinery and materials coming into the country. In addition, it provides for up to �ve years income tax relief.

INTERNATIONAL FINANCIAL COMPANIES ACT

In an e�ort to promote o�shore banking facilities, the Jamaican Government has provided international �nancial companies with income tax relief on both pro�ts and capital gains. Also known as the Income Tax Relief Act, it provides for partial relief from income tax for the bene�t of corporate entities considered to be international �nance companies and are approved and recognized under the Act.

SHIPPING ACT

Under this Act, once a company is recognized as an “‘Approved Shipping Corporation’” it may receive tax relief and concessions on import duties for up to ten years.

MODERNIZATION OF INDUSTRY PROGRAMME

�is incentive provides for the waiving of General Consumption Tax chargeable on the acquisition of machinery and equipment directly related to the manufacturing process.

URBAN RENEWAL ACT

�is Act is targeted at persons or organizations that facilitate or carry out urban development. Relief from income tax, stamp duty, and transfer tax is given to those persons who engage in transactions geared towards urban development, i.e. the metropolitan centres of Kingston and Montego Bay.

FACTORY CONSTRUCTION LAW

�is Law targets companies which construct factories and lease or sell them to producers. It grants relief from:• Import duties for items which are not available locally.• Income tax on factory leasing or sales.

JAMAICA EXPORT FREE ZONE ACT

Before a manufacturer can take advantage of the concessions made available by this Act, their company must be incorporated or registered under the Companies Act. A company can operate within the designated Free Zone area or outside as a single entity in the customs territory. In order for �rms outside the Free Zone complex to bene�t under the single entity free-zone status, the company must:• Be registered according to the provisions of the

Companies Act.• Export at least 85% of its production.

�e “free-zone” status enables manufacturers and service providers (in the case of informatics free zones) to bene�t from the exemption from income tax on pro�ts in perpetuity, as well as import duties and licensing. Furthermore, there exists a special provision under this Act, which permits the repatriation of foreign exchange by overseas investors to its parent company without any form of recourse on the part of the Government.

Incentives


ACCELERATED DEPRECIATION/SPECIAL CAPITAL ALLOWANCE

Quali�ed businesses must be certi�ed by the Ministry of Industry, Commerce and Technology. For a data processing/system development business, at least 20% of its gross income must be derived from exports. Upon quali�cation, a certi�ed business is granted a special allowance of capital expenditure for:- 50% of the full cost of any new machinery in the year of purchase.- A further 50% in the second year.

HEART TRUST/NATIONAL TRAINING AGENCY

�e HEART Trust/National Training Agency provides technical support and �nancing for a wide variety of employment training programmes through its islandwide network of institutions, on-the-job training and partnerships with community organizations. �e agency has partnered with numerous startup investors over the years to promote the training and certi�cation of workers, and is particularly interested in high skill/high wage jobs, in which the training provided leads to NCTVET (National Council for Technical and Vocational Education and Training) certi�cation.

�e Agency provides �nancial assistance, usually in partnership with the �rm, to fashion on-the-job and in-plant training programmes for �rms creating new jobs. Projects developed have been of various designs, customised to the employment situation, however funding is limited in this category and demand is high. �e Agency also provides assistance with recruitment and screening of applicants as well as with assessment and certi�cation of the on-the-job learners.

Limited �nancial support is also o�ered to �rms who wish to pursue accreditation as a training organization.

INTERNATIONAL TECHNICAL ASSISTANCE PROGRAMME (ITAP)

�is covers the various programmes that are funded by international agencies and administered by JAMPRO/JTI. �ese programmes are made available to persons

wishing to make investments that are deemed to have the potential to contribute to Jamaica on a developmental level. �e main organization that presently funds these types of development programmes is the European Union through the European Development Fund (EDF).

THE EXCHANGE CONTROL ACT

�e Government of Jamaica has no restrictions on the movement of foreign currencies �owing either in or out of Jamaica. �is Act facilitates the free movement of capital to other countries, whether for investment or repatriation.

TRADE AGREEMENTS

Additionally, Jamaica is a party to a number of bilateral trade agreements with countries in -• Asia: China, Republic of Korea• Latin America: Costa Rica, Dominican Republic,

Mexico• Africa: Nigeria• Europe: Czech Republic, Hungary, Norway, Russian

Federation

It is also a member of a number of international free trade blocs such as CARICOM and WTO. Agreements also exist between Jamaica and a number of South American and Spanish Caribbean countries through joint CARICOM agreements.

SECTOR INCENTIVES

�e Government of Jamaica has provided a number of investment incentives that are accessible by both local and foreign investors. �e following is a listing of the more prominent incentives presently being o�ered in each sector, as well as those that may be applied across a number of sectors. Jamaica Trade and Invest/JAMPRO is the organization that facilitates access to these incentives.


AGRICULTURE INCENTIVES

APPROVED FARMER STATUSApproved Farmer status guarantees the farmer income tax and import duty concessions for up to ten years, a�er which the status may be renewed. Farmers engaging in the production of the following qualify for “approved farmer” status and the ensuing bene�ts:• Food crops grown and produced in Jamaica • Egg production/hatching• Seed growing• Timber production• Tobacco production• Horticulture• Aquaculture• Livestock cultivation: Cattle farmers have to assure the

Tax Administration Services Department of their intent to increase their herd by at least 10% over a �ve year period before the relief can be granted.

• Apiculture• Horse Breeding: Horse breeders have to assure the Tax

Administration Services Department of their intent to increase their herd by at least 10% over a �ve year period before the relief can be granted.

REMISSION OF DUTIES ON AGRICULTURAL VEHICLES

�is 20% concession rate is available to farmers/farming enterprises that can prove the vehicles being imported are complementary to their farming activities. �e vehicles must be panel vans and pick-ups not exceeding two tons, trucks exceeding two tons, tractor heads and tractors.

REMISSION OF DUTIES ON AGRICULTURAL EQUIPMENT, MACHINERY AND PRODUCTS

Farmers/farming enterprises are exempt from paying General Consumption tax (GCT) on items which are listed as exempted or zero rated under the tax, such as farming supplies.

�ere is also an exemption or signi�cant reduction of import duties on certain items that are listed under the Provisional Collector of Tax Act. �is is applicable primarily to the livestock, dairy and poultry industries.

CREATIVE INDUSTRIES: Film

MOTION PICTURE ENCOURAGEMENT ACT

�e requirement for eligibility is that a company must be incorporated or registered under the Companies Act.A “recognized �lm producer” is entitled to:• Relief from income tax for a period not exceeding nine

years from the date of the �rst release of the motion picture.

• An investment allowance of 70% of the expenditure on the facilities, which may be carried forward beyond the initial nine year period, is also granted for income tax purposes.

• Exemption from the payment of import duty on equipment, machinery and materials for the building of studios or for use in motion picture production.

UK CO-PRODUCTION TREATY

Signed between the Governments of Jamaica and the United Kingdom in November 2007, the treaty enables �lms that are granted Approved Co-production status by the relevant competent authority to be treated as national �lms of each signatory country. Bene�ts include: duty free import or export of equipment, access to UK �lm tax incentives, granting of work permits in accordance with immigration legislation to Jamaican crew members, access to exotic locations and skilled labour.

Types of Co-Production include:• Finance-Only Contributions:

�is type of co-production should include one or more co-producers who solely contribute �nancially no less than 10% and no more than 25% and, �nancial contributions should not be less than 20% but no more than 25% of total production cost.

• No Finance-Only Contributions:�is type of contribution should include at least one UK Co-Producer and at least one Jamaican Co-Producer. �ere can, however, be a maximum of four Co-Producers. All Co-Producers must have entered into a contract re�ecting their respective responsibilities as Co-Producers and must directly negotiate the contract, and pay for rights, goods and services. Any �lm-making contribution bene�ting a country shall be broadly


proportionate to the �nancial contribution of the Co- Party and Co-producer (or Co-producers) established in that country.

CREATIVE INDUSTRIES: Music

TOOLS OF TRADE - WAIVER OF DUTY �is incentive o�ers local and international artistes bringing in equipment, instruments and other tools of the music trade a waiver on applicable importation duties. To access this incentive, applicants must submit the following prior to the arrival of the items.• A letter of request to the Film, Music & Entertainment

Commission/ Creative Industries Unit, requesting assistance under the interim Tools of Trade Facility re: importation of music equipment/instruments.

• A proforma invoice with a detailed list of items being imported. �is should include serial numbers and the cost of each item.

• Company Pro�le• A copy of the Certi�cate of Incorporation and current

tax compliance certi�cate for companies registered in Jamaica.

• Jamaican applicants must be registered members of the Jamaica Federation of Musicians (JFM) or the Recording Industry of Jamaica (RIAJAM)

Upon receipt of the above listed items, Jamaica Trade and Invest (JAMPRO) will submit the documents to the Ministry of Finance for approval. �is process will take approximately ten working days.

MANUFACTURING INCENTIVES JAMAICA EXPORT FREE ZONE ACT

Before a manufacturer can take advantage of the concessions made available by this Act, their company must be incorporated or registered under the Companies Act. A company can operate within the designated Free Zone area or outside as a single entity in the customs territory. In order for �rms outside the Free Zone complex to bene�t under the single entity free-zone status, the company must:•Beregisteredaccordingtotheprovisionsofthe Companies Act.•Exportatleast85%ofitsproduction.

�e “free-zone” status enables manufacturers and service providers (in the case of informatics free zones) to bene�t from the exemption from income tax on pro�ts in perpetuity, as well as import duties and licensing. Furthermore, there exists a special provision under this Act, which permits the repatriation of foreign exchange by overseas investors to its parent company without any form of recourse on the part of the Government.

ACCELERATED DEPRECIATION

Special Capital AllowanceQuali�ed businesses must be certi�ed by the Ministry of Industry, Commerce and Technology. For data processing/system development businesses, at least 20% of its gross income must be derived from exports. Upon quali�cation, a certi�ed business is granted a special allowance of capital expenditure for:•50%ofthefullcostofanynewmachineryintheyearof purchase•Afurther50%inthesecondyear

EXPORT INDUSTRY ENCOURAGEMENT ACT

To qualify for incentives under this Act the manufacturer must be an exporter of manufactured products. In the case of a full exporter (i.e 100% of the goods manufactured are exported), the business must be designed to export manufactured products in exchange for hard currency (non-CARICOM markets). In the case of a partial exporter, producers must export a threshold of 5% of their production to non-CARICOM markets.

Having ful�lled these requirements, the manufacturer is eligible to receive concessions on income tax for ten years as well as exemption from import duties on raw materials and machinery.

�e income tax rebate is granted according to the percentage of export pro�ts and total pro�ts. For new exporters, the rebate is calculated based on the percentage of export sales to total sales, while for the already existing exporter, the rebate is calculated based on incremental export sales over a base year.�e Act has been amended to provide bene�ts where incremental exports to non-CARICOM countries are in excess of 5% of total exports.


BAUXITE AND ALUMINA INDUSTRIES ENCOURAGEMENT ACT

Under this Act, if a business is engaged in the mining of bauxite or the production of alumina in Jamaica, they are automatically quali�ed for import duty concessions on capital goods, lubricating oils, grease and other chemicals.

PETROLEUM REFINERY ENCOURAGEMENT ACT

A registered oil re�nery may import articles for the construction and operation of the re�nery as well as for the purpose of manufacturing petroleum products duty free. Furthermore, the manufacturer is exempt from paying income tax, or tax on dividends paid to shareholders, for a period of up to seven years a�er which he has six years to carry forward net losses incurred during that period.

WAIVER OF DUTY ON RAW MATERIAL

Agro-industries are granted an exemption from payment of the Common External Tari� (CET) and also the additional stamp duty on their raw material imports.

SugarSince 1997 there has been an increase in the cost of imported re�ned sugar due to an imposition of an additional stamp duty and the Common External Tari� (CET). As a result, manufacturers using re�ned sugar as a “raw material” have been granted stamp duty waivers under the raw material schedule.

�e decision was also taken that if manufacturers use traders to import sugar on their behalf, these manufacturers should also be eligible for the waiver of additional stamp duty.To gain access to this incentive Agro-Industries/Manufacturers must:•ApplyinwritingtotheMinistryofAgriculturemaking the request.•Defineitem(s)clearly.• State thequantity in exactweight in eitherkilograms or metric tonnes.•Declarethattheitemistobeusedasarawmaterial.

TOURISM INCENTIVES

HOTEL INCENTIVES ACT

For a hotel to bene�t from this Act, it must contain ten or more bedrooms as well as facilities for meals and the accommodation of transient guests, including tourists. �e Act o�ers income tax relief and duty concessions for up to 15 years for convention-type hotels (hotels with at least 350 bedrooms), and ten years for regular hotels.

RESORT COTTAGES ACT

�e resort cottage must contain at least two furnished bedrooms with kitchen, living room and bathroom facilities, used for the accommodation of transient guests including tourists, in order to quality for reward. In this case, the business receives income tax relief for up to seven years, while a group of cottages containing ten or more bedrooms is eligible to receive similar income tax relief and duty free importation of building materials and furnishings.

ATTRACTIONS INCENTIVE

�e Government of Jamaica recognizes that the attractions sub-sector is an integral part of their e�orts to achieve an e�cient and internationally competitive tourism product.

�e attractions sub-sector can generate signi�cant sustainable investment, foreign exchange and employment. In this regard, the Government of Jamaica is pursuing an integrated tourism development programme, in which attractions play a key role. It brings diversity to Jamaica’s tourism product, broadening the range of visitor


experience by o�ering more than the sea, sun and sand for which we are popular. However, there is a need to stimulate growth and facilitate those wishing to invest in this sub-sector and as a result, the Attractions Incentive Package was introduced.

�e incentive o�ers a �ve year exemption from corporate taxes for investors in attractions as well as an exemption from General Consumption Tax (GCT) and Customs Duty on items imported for �ve years.

�e submitted application to the Ministry of Tourism must include the following:• A copy of Balance Sheet for the last year of operation

(if applicable), a business plan, Photograph of facility (8”x10”) and a brochure.

• Copy of approved building plan and drawing designating the precinct of the existing structure and proposed extension (where construction will be undertaken).

• Quantity surveyor’s report (for those facilities undergoing major refurbishing or upgrading)

• Copies of Certi�cate of Incorporation, Memorandum and Articles of Association (if a company makes application).

• Copy of Tax Compliance Certi�cate (where necessary), a copy of JTB License and TPDCo Inspection Report (where necessary), as well as a Certi�cate of Registration of Business name is required for sole traders.

• Copy of Certi�cate of Title (where necessary).• List of items and quantities to be purchased certi�ed

by TPDCo (for those entities undertaking refurbishing that does not involve any construction e.g. refurbishing and re-equipping).

INFORMATION TECHNOLOGY INCENTIVES

• 100% tax holiday on pro�ts in perpetuity for organisations that export over 85% of their services outside CARICOM

• Duty free import of goods for companies located in the Free Zones, including capital goods, consumer goods, raw materials for approved activities and o�ce equipment.

• No limits on the repatriation of foreign exchange, and

Free Zone companies may operate foreign exchange accounts.• �e Export Industry Encouragement Act, which o�ers

duty-free importation of raw materials and capital goods, and a tax holiday on pro�ts for ten years for organisations that export less than 85% of their services.

ATTRACTIONS INCENTIVE


INVESTORSUCCESS STORIES

Since its entry into Jamaica in 2001, Digicel has become the fastest growing wireless telecoms operator in Ja-maica and the wider Caribbean. Over the past 11 years, the company has invested over US$1 billion in the country and has expanded its international customer base to 11 million across its 31 markets in the Caribbean, Central America and the Pacific. The company is currently finalising plans for its US$60-million headquarters in downtown Kingston.

“I could not recommend a better place for any foreign investor than Jamaica, given its key location as a crossing point between North America and South America. And we have been welcomed with open arms by the Government,” states Denis O’Brien, founder of Digicel.

Digital cable and broadband service provider Columbus Communications launched its operations in Jamaica un-der the Flow brand in 2006 and, to date, has saturated roughly 50 per cent of the market with a customer base of over half a million subscribers. They have so far invest-ed US$250 million in local development. The company’s confidence in Jamaica is reflected in its decision to invest US$40 million annually over the next four years on its operations in Jamaica as part of its aggressive develop-ment geared at strengthening its foothold in major centres across the island.

“Flow remains committed to supporting the Government’s efforts to drive economic growth through foreign direct investment...our own investment in Jamaica has delivered a state of the art broadband network which is a critical factor in Jamaica’s competitiveness for attracting invest-ment,” states Michele English, Flow’s President and Chief Operating Officer.

Denis O’Brien

Michelle English

Chairman, Digicel Group

President & Chief Operating Officer, Flow


Born out of a partnership between Jamaican entrepre-neur Jacqueline Sutherland and American investor Mark Jones, Global Gateway Solutions, Inc. (GGS) has emerged as one of the leading providers of global contact centre solutions in Jamaica. The company has grown from 50 agents occupying 5,000 sq. ft. in 2010 to over 500 agents in 30,000 sq. ft. in the Montego Bay Free Zone. The com-pany is currently looking to expand their operations into Jamaica’s capital city of Kingston.

“We have gathered momentum and credibility, and we’re now at a size that puts us in a position to attract top tier international clients who are looking to bring 100 to 400 jobs as an opening proposition,” says Mark Jones, Chairman of GGS.

Vistaprint Jamaica Limited began operations in 2003 as a customer service centre for parent company Vistaprint – the world’s leading online design and print solution for small businesses worldwide. After initially starting with over 20 employees, Vistaprint Jamaica’s staff now stands at over 600. By the middle of this year, the com-pany plans to move into its newly built US$25-million, 92,000-square-foot facility in the Barnett Tech Park in Montego Bay.

The world-class Jamaican workforce has bolstered the reputation of the company, with the Content Creative Jamaica Department developing the best-selling design on Vistaprint’s global website in 2011.

“The facts show that we do have world-class talent...and we’re very proud of that. I see Vistaprint Jamaica be-ing bigger than it is right now in the next five years...We ultimately aim to be the employer of choice in Jamaica,” states Roger Williams, Vistaprint Jamaica’s General Manager.

Mark Jones

Roger Williams

Chairman, Global Gateway Solutions

General Manager VistaPrint Jamaica Limited

INVESTORSUCCESS STORIES

38

GLOBAL BRANDSOPERATING IN JAMAICA

ICT

39

ICT/BPO

40

TOURISM

41

INFRASTRUCTURE/SERVICES

42

MANUFACTURING


in Jamaica 2012

ABOUT JAMAICA

Advantageously situated in the western Caribbean, Jamaica is a country of immense beauty and endless diversity. The very mention of its name conjures up images of cascading waterfalls, pristine beaches, rolling green hills and majestic mountains.

The largest English-speaking island in the region and the third largest overall, Jamaica is also recognised as the premier investment destination in the Caribbean. It is an excellent location for establishing a business and trading with the rest of the Western Hemisphere and beyond.

Geography

Jamaica’s land area is 10,991 sq. km (4,244 sq. miles), measuring 235 km (146 miles) from west to east and 82 km (50 miles) from north to south at its widest point. The island is characterised by a mountainous central spine and coastal plains with beautiful white sand beaches located mainly in the north and west. The highest point on the island is the Blue Mountain Peak, which rises to 2,256 m (7,402 feet). Jamaica is 145 km (90 miles) south of Cuba and 885 km (550 miles) south of Miami, Florida.

Kingston, the capital city, is situated on the southern end of the island and is the country’s major commercial centre. It is home to the world’s seventh largest natural harbour - the Kingston Harbour, which attracts international shipping companies because of its easy access to the main shipping lanes that run through the Panama Canal. In the parish of St. James lies the resort town of Montego Bay, Jamaica’s second city and the tourism mecca of the Caribbean.

Population

With a population of 2.7 million, the country offers a literate, well-trained, multi-skilled and competitively priced labour

force. The majority of the Jamaican population is of African or mixed African-European origin. The remainder of the population consists of the descendants of East Indians, Chinese and Europeans.

Climate

Jamaica has an inviting tropical climate, with the annual temperature falling between 24ºC or 75ºF to a maximum of 32ºC or 90ºF. Cooler temperatures are experienced in the mountainous areas and rainfall is seasonal.

Language

English is the official language. However, most Jamaicans speak conversationally in Jamaican creole or patois.

Religion

The vast majority of Jamaicans are Christians. However, other religions exist in Jamaica such as Judaism, Islam, Hinduism and Rastafarianism.

Government

Jamaica has an established tradition of democracy, with the Government being voted into power by constitutionally free elections. Parochial elections are held every three years, while national elections are held every five years. The system of government and the constitution of the country are based on the Westminster Parliamentary model.

The national legislative power is vested in a bicameral Parliament, comprised of a House of Representatives and a Senate. The House of Representatives comprises 60 members


elected in general elections. The political party with the most support in the House of Representatives forms the Government, which is headed by the Prime Minister. The Senate consists of 21 persons appointed by the Governor-General, 13 of whom are appointed on the advice of the Prime Minister and eight on the advice of the Leader of the Opposition.

The principal instrument of policy-making is the Cabinet, which is charged with the general direction and control of the Government. The Cabinet consists of the Prime Minister and no fewer than 11 members of the two Houses of Parliament.

The judiciary exists as an independent arm of the Government and there are constitutional provisions to protect the rights of citizens.

Economy

Jamaica operates as a mixed free-market economy with both state and private sector participation in productive enterprise. The economy recorded GDP of US$13.7 billion in 2010 with the main sectors of the economy being Tourism, Agriculture and Agro-processing, Mining, Manufacturing, Creative Industries and Financial Services. The Services industries account for over 50 per cent of GDP.

The economy is driven by foreign direct investment (FDI) and foreign exchange earned through exports and remittances. Jamaica received an estimated US$201 million in FDIs in 2010. The most dynamic sectors in term of foreign direct investment (FDI) have been tourism, ICT and mining. The Jamaican Diaspora also contributes significantly to the economy through remittances, which amounted to over US$1.7 billion in 2009. Jamaica also boasts a developed tourism industry and continues to enjoy record levels of tourist arrivals.

As an open economy, Jamaica is well integrated into the global economy with external trade contributing prominently to overall economic activity. Jamaican exporters are able to access several key markets through preferential trade agreements and other multilateral trade arrangements.

Currency

The official currency is the Jamaican Dollar (JMD), but most financial institutions accept other major currencies.

ABOUT JAMAICA

CONTACT US:

JAMPRO

18 Trafalgar RoadKingston 10, Jamaica W.I.T: +1 876 978-7755; 978-3337F: +1 876 946 0090E: [email protected] Free: +1 877 INVESTJA (468 4352) www.tradeandinvestjamaica.org

NORTH AMERICAN REGIONAL OFFICE303 Eglinton Avenue East,2nd FloorToronto, Ontario, M4P 1L3, Canada T: 416-932-2200 (main) 416-598-3008 F: 416-932-2207Toll Free: 1-877-744-2208E: [email protected]

EUROPEAN REGIONAL OFFICEJAMPRO / Jamaica Trade Com-mission1 Prince Consort Road,London SW7 2BZ, EnglandT: + 44 20 7 584 8894F: + 44 20 7 823 9886E: [email protected]

INVESTING INJAMAICA 2012

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