Change coming to LCCL & TABL regimes and laws
(CNS): Commerce Minister André Ebanks told MPs last week that a private member’s motion brought to parliament has presented the government with “a golden opportunity” to review the Local Companies Control Licensing and the Trade and Business Licensing laws. He said that, like a lot of other legislation on Cayman’s statute books, they are ready for modernisation.
The laws in this area were made for another era, and things have changed sufficiently in the economy that the Cayman Islands no longer need to rely on overseas money or expertise to open up certain markets, he said.
The motion, which was accepted by the government and passed through the House on Thursday, was brought by McKeeva Bush and supported by Chris Saunders. It calls on the government to amend the Trade and Business Act to remove the ability for foreigners to partner with Caymanians in real estate and property companies, small construction businesses, car rentals, water sports and light technology up to a value of $2.5 million.
Bush has also asked for the government to place a moratorium on all LCCL businesses with no Cayman partners and for the government to introduce a fee for foreign developers building apartments and hotels of 5% on the value. That money should then be set aside for government to purchase property earmarked for only Caymanians to buy with controls to prevent landbanking and which can only be sold on to other Caymanians.
The motion also asks the government to give the Cayman Islands Development Bank the resources to help qualified Caymanian entrepreneurs obtain the necessary funding to engage in business activities that are 100% owned by them.
Bush said he was “asking a lot with this motion,” but it all needed to be done to give Caymanians an opportunity to take advantage of the development here that many people feel has not benefitted them. The government has to do more than just allow development; it must ensure that local people are given opportunities and not get left behind. He said young people wanted to get something out of Cayman’s success.
“Our children are looking for better opportunities, and that’s what this motion is trying to do,” he said.
Responding to the motion and accepting it on behalf of the government, Ebanks said that it called for the government to be innovative, ” to create reforms and enact reforms that are more fitting for the time and place”.
He said that as of 30 June, there were 209 LCCLs. The figure fell slightly after the board was given a mandate to refuse all LCCLs for business that clearly Caymanians could do. A revision of fees had made some more expensive, which led to a drop in the number of applications from purely foreign companies. Ebanks had brought a change to the law last year because some of the fees “were grossly out of date” and some of them were “just too cheap”.
He said that the Department of Commerce and Investment had also begun to look more closely at categories of businesses. Members of the team had already looked at the issue of real estate agents, given that there are now many Caymanian real estate agents who support the idea of making it a business carved out for local people only, as there is no reason why that business cannot be carried out by local people.
He said that while the government is considering a moratorium on all LCCLs, it wanted to retain some flexibility as there are some areas, such as an airline offering a new route, where an LCCL would still be required.
Ebanks said capital for the development can’t rest solely on the government, but his ministry was already working on a crowdfunding platform to pool local investment cash that young Caymanian entrepreneurs or business start-ups can access. The minister said considering the motion would be an innovative and energising exercise that all members could participate in before a broader consultation on changes to the local business licensing regime.
Bush welcomed the support of the government and the House for the intent of the motion, which he said was “designed to help Caymanians, not disadvantage Caymanians” as he believed “certain businesses can be left for our people”.
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Category: Business
Quit giving the country away! Shame on you Andre, we need less foreign ownership.
‘Tax’ WP holders making over a certain amount of money annually, limit foreign ownership to only one residential property.
This comes from an expat.
Easy answer is just stop issuing licenses for anything under a certain limit. We shouldn’t put more fees and make it more difficult for major projects as these at least generate some $ for the economy. The small business $ all goes into the owners pockets and adds nothing to the country.
All talk…no time to draft and pass any new legislation given there will at most be 2 sessions of parliament before the general elections next year.
Andre bet you can’t say the real reason you prefer crowdfunding over providing capital to the CIDB. There are risks associated with this platform and more risks associated than a business loan.
Who stands to benefit from implementing the platform and how does the jurisdiction provide proper oversight? As Financial Services Minister surely you can come better than this.
So McKeeva has been in power for over 40 years and all of a sudden he wants to restrict some businesses? It took you 40 years to think about that? Convenient timing and let us not forget Cambridge Realty that sold Ritz Carlton units where his wife was employed and supposedly a 60% shareholder.
Sometimes us older folks come in useful to remind others of past deeds.
McKeeva Bush retire and shut up!!!
Andre you have some fooled but not all.
People be prepared to get bombarded with all kinds of proposals as this crew is desperate to keep their seats and introduce things that are not in the best interest of us. It may appear otherwise but once you unwrap the gift there is an empty box
Thank you. McKeeva told us to embrace wealth or reap poverty and what have we ended up with…relative poverty compared to all the wealth we embraced. Huge wealth creation happening in Cayman that Caymanians are not participating in. We are making millionaires and multi-millionaires out of expats and only expats. The only wealthy Caymanians are either 16-hour-working professionals, or boomer/Gen X entrepreneurs who took advantage of Cayman’s population boom without having a clue what scale it would happen on. The vast majority are on more or less fixed incomes, and their money is not doing any work for them, if they have it. This is an excellent first step and I want to see much more of this. Redistribution. We don’t tax expats on their vastly greater wealth and control of our economy, so they should be excluded from participation in all parts of it where we don’t need them. Give Caymanians a chance to be rich and enjoy some peace of mind in what is supposed to be our paradise.
What of the work permit holders becoming shareholders? Isn’t that working outside of the permit? That’s ’working’ they get paid. What of the PR hopefuls opening companies/investing on paper in hopes of becoming Caymanian and not hiring any Caymanian s but their friends?
And becoming directors. Clear breach of their permit but no enforcement. Dart a classic example.
Can we please reserve “fronting” for Caymanians only?
I thought McKeeva already charged a fee to foreign developers?
Remember the biggest developers are now Caymanian, whether paper or generational, so the idea of imposing a 5% tax on non Caymanians will be very popular with the big boys.
They need to raise the fees by a lot. There’s too many people taking out licenses for businesses that don’t exist so they can import their friends and family who then find other work illegally. It’s the biggest scam and our government has known about it for years now.
Dear CNS. Didn’t the government amend the law a few months ago, thereby allowing foreigners to open business “without “Caymanian partner-ship” and in turn charge them a higher fee?????
Good. But possibly too little too late. Caymanians have too little participation in their economy.
When are we going to see a single fronter arrested for their crimes? There are many, all operating with impunity. Many of them are not even from here and are betraying the principles underpinning the grant of their status.