Guyana is located on South America’s North Atlantic coast, bordering Venezuela, Suriname, and Brazil. Guyana is an upper middle-income country according to the World Bank. In 2019, estimated inflation was below 2.5 percent with a 4.4 percent growth Gross Domestic Product (GDP). With the advent of first oil, the Guyanese economy is poised to become one of the best performing economies in the Western Hemisphere with an optimistic projected GDP growth rate in 2020 exceeding 50 percent. In response to COVID-19, the Bank of Guyana anticipated a 10 percent contraction in non-oil sectors for 2020. Guyana’s economy is driven primarily by commodities such as gold, bauxite, rice, and sugar. The United States was Guyana’s largest trading partner in 2019.
Guyana’s medium-term prospects remain positive with the discovery of vast oil reserves in Guyana’s waters that will provide decades of substantial oil revenues. The Government of Guyana (GoG) created a sovereign wealth fund for the oil revenues and plans to spend most of the near-term revenue on education, health, and infrastructure.
Outside the oil industry, Guyana’s economy has been hampered by political uncertainty that started in December of 2018 when the ruling administration fell to a no-confidence vote. Elections were finally held on March 2, but due to various legal and political delays, results were delayed, leaving many foreign investors in a holding pattern. In addition to the political uncertainty, the COVID-19 pandemic resulted in the government closing the airport to international flights, closing non-essential businesses, and implementing a curfew from 6 a.m. until 6 p.m. that resulted in a further contraction of the economy. Despite these challenges, Guyana is still projected to lead the Caribbean in GDP growth for 2020.
The Government of Guyana (GoG) actively encourages foreign direct investment (FDI) and offers tax concessions for priority projects through its Guyana Office for Investment (GO-INVEST). According to the Bank of Guyana’s Half -Year Report for 2019, Guyana’s FDI increased from $514.8M to $826.4M, an increase of 60.5 percent. This growth in FDI was fuelled mainly by developments within the oil and gas sector and all the industries that support it. Guyana recently developed a local content policy to help local companies take advantage of this business sector. Legislation to enforce the preliminary local content policy is still forthcoming, so the impact on oil and gas companies investing in Guyana is unknown.
Guyana offers both foreign and domestic potential investors a broad spectrum of investment choices, including agriculture, petroleum, construction, wholesale and retail, health, transportation, and agro-processing. Furthermore, opportunities exist within the services sector such as renewable energy, business process outsourcing (BPO), call centers, information technology services, hospitality, and tourism. Guyana is the only English-speaking country in South America and has a sizeable labor market, creating unique potential for call centers and other industries. The construction, wholesale and retail, transportation, and storage sectors experienced notable growth in 2019.
In 2015, ExxonMobil began exploratory drilling off Guyana’s coast, investing nearly $4 billion into the project thus far. ExxonMobil found recoverable oil in 16 out of 18 attempts and increased its estimate of recoverable oil to 8 billion barrels of -equivalent, with ongoing exploration from several international oil companies.
Guyana’s Green State Development Strategy, which was finalized in May 2019, serves as the guiding document for government priorities under the administration of President David Granger. These priorities include a focus on agriculture, supporting emerging and value-added industries, improving business climate, investing in sea defence, and transitioning to nearly 100 percent renewable energy.
Perceptions of corruption persist in Guyana. Transparency International’s 2019 report scored Guyana at 85 out of 180 ranked economies. One key concern was the insufficient response to a high crime rate. Guyana also ranked 134 out of 190 countries in the World Bank’s 2019 report on Ease of Doing Business. The major shortcomings included a weak judicial system, lack of intellectual property protection, corruption, and bureaucracy.
Guyana continues to benefit from official development assistance from multiple donors with projects focused on health care, education, economic development, climate change adaptation, disaster mitigation, and citizen security.
|TI Corruption Perceptions Index||2019||85 of 180||https://www.transparency.org/cpi2019|
|World Bank’s Doing Business Report||2019||134 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||N/A||N/A||https://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, stock positions)||N/A||N/A||http://apps.bea.gov/
|World Bank GNI per capita||2018||USD 4,770||https://data.worldbank.org/
1. Openness To, and Restrictions Upon, Foreign Investment
Policies toward Foreign Direct Investment
The Government of Guyana (GoG) recognizes foreign direct investment (FDI) as a critical part of growing the economy. In 2019, the GoG published its Green State Development Strategy (GSDS) which highlights the priority areas over the next 20 years. These priorities include investment in agriculture, agro-processing, light manufacturing, renewable energy, tourism, and Information and Communications Technology (ICT).
The Government of Guyana promotes FDI through its Guyana Office for Investment (GO-INVEST). There are no laws and practices that discriminate against foreign investors. Companies willing to invest in Guyana may negotiate tax concessions with the GoG through its investment facilitation agency GO-INVEST.
GO-INVEST focuses primarily on agriculture and agro-processing, tourism, manufacturing, ICT, seafood and aquaculture, and wood processing. Potential investors should note that GO-INVEST is the first point of contact to obtain necessary permits and tax concessions upon which an investment agreement is prepared by GO-INVEST and sent to the Guyana Revenue Authority (GRA). GO-INVEST has been targeted by Guyana’s Ministry of Business for capacity-building assistance to help improve its operations in support of interested investors.
In January of 2020, the GoG released its local content policy framework which is intended to provide a guideline for future legislation on the subject. Criticism of the policy within Guyana’s business community emphasizes the absence of first preference to local companies. Presently, the policy focuses on upstream oil and gas activities. The GoG intends to develop the policy further to include skills development of Guyanese nationals and supplier development of Guyanese companies.
Limits on Foreign Control and Right to Private Ownership and Establishment
Guyana’s constitution specifically protects the rights of foreigners to own property or land in Guyana. Foreign and domestic firms possess the right to establish and own business enterprises and engage in all forms of remunerative activity. Private entities are governed by the Companies Act and are free to acquire or dispose of interest in accordance with the law.
Foreign and domestic firms have the right to establish and own business enterprises and engage in all forms of remunerative activity. Some key sectors like aviation, forestry, banking, and tourism are heavily regulated and require licensing. The process to obtain licenses can be time consuming and may in some instances require approval by subject minister.
According to GO-INVEST’s “Investor’s Roadmap,” the estimated processing time to obtain the approvals to lease state or government-owned lands is about one year. Some investors report much longer processing times. Restrictions on foreign ownership of property exist in the mining sector for small-and-medium-scale mining concessions. Foreign investors interested in participating in the industry at those levels may establish joint ventures with Guyanese nationals, under which the two parties agree to jointly develop a mining property. This type of relationship can carry a high level of risk because arrangements are governed only by private contracts and the sector’s regulatory agency, Guyana Geology and Mines Commission, does not oversee them. The U.S. Embassy strongly encourages investors to exercise due diligence when exploring their options.
Other Investment Policy Reviews
Guyana’s macro-economic fundamentals have remained stable over the past decade. The current administration has articulated its policy focus through the Green State Development Strategy. The developmental policies include incentives for priority areas including renewable energy, agriculture, and agro-processing. The Ministry of Finance published its Public Private Partnership framework to finance such priority areas.
Guyana remains of key economic significance to the Caribbean region with its exceptional growth rate attributed to its oil discoveries. Government policy focuses on attracting inward FDI. The GoG applies national treatment to all economic activities, except for certain mining operations, though some foreign-owned companies conduct large-scale mining operations in the country. During the past year, the GoG took actions to improve the business environment, such as lowering corporate income tax rates. Incentives for FDI include income tax holidays, and tariff and value-added tax (VAT) exemptions.
The World Trade Organization (WTO) published a trade policy review in 2015.
- WTO –
All companies operating in Guyana must register with the Registrar of Companies. Registration fees are lower for companies incorporated in Guyana than those incorporated abroad. Locally incorporated companies are subjected to a flat fee of approximately $300 and a company incorporated abroad is subject to a fee of approximately $400. Businesses in the sectors requiring specific licenses, such as mining, telecommunications, forestry, and banking must obtain operation licenses from the relevant competent authorities before commencing operations.
GO-INVEST also advises the GoG on the formulation and implementation of national investment policies and provides facilitation services to foreign investors, particularly in completing administrative formalities, such as commercial registration and applications for land purchases or leases. Under the Status of Aliens Act, foreign and domestic investors have the same rights to purchase and lease land. However, the process to access licensing can be complex and many foreign companies have opted to partner with local companies which may assist with acquiring a license. The Investment Act specifies that there should be no discrimination between private foreign and domestic investors, or among foreign investors from different countries. The authorities maintain that foreign investors have equal access to opportunities arising from privatization of state-owned companies.
The GoG is focused on attracting inward investment into Guyana. GO-INVEST also supports Guyanese investors and exporters looking to operate overseas. In 2019, the Natural Resource Fund act was passed for the creation of a sovereign wealth fund. The act provides the Minister of Finance with the responsibility and overall management of the fund. The act provides for the minister to enter into an agreement with the Bank of Guyana for the operational management of the fund. This fund is currently held at the Federal Reserve Bank of New York and received its first US $55M deposit from oil revenue in March, along with the country’s first 2% royalty payment from the total sale of the oil.
3. Legal Regime
Transparency of the Regulatory System
Legal, regulatory, and accounting systems are consistent with international norms. Guyana is a democratic state and a separation of powers exists among the executive, legislative, and judiciary.
As captured in the World Bank’s Doing Business Report, bureaucratic procedures are cumbersome, often requiring the involvement of multiple ministries. Investors report having received conflicting messages from various officials, and difficulty determining where the authority for decision-making lies. In the absence of adequate legislation, much decision-making remains centralized. An extraordinary number of issues continue to be resolved in the presidential cabinet, a process that is commonly perceived as opaque and slow. Attempts to reform Guyana’s many bureaucratic procedures have not succeeded in reducing red tape.
International Regulatory Considerations
Guyana has been a World Trade Organization (WTO) member since 1995 and adheres to Trade-Related Investment Measures (TRIMs) guidelines. Guyana is a member of the Caribbean Community (CARICOM) and seeks to harmonize its regulatory systems with the rest of the members. The Forest Stewardship Council, Verification and Legal Origin, Reduce Emissions from Deforestation and Forest Degradation (REDD+), are some of the norms incorporated in the regulations.
Guyana has laws on intellectual property rights and patents. However, the lack of enforcement allows for the spread of illegally obtained content.
Laws and Regulations on Foreign Direct Investment
Legislation exists in Guyana to support foreign investment in the country, but the implementation of relevant legislation continues to be inadequate. The objectives of the Investment Act of 2004 and Industries and Aid and Encouragement act 1951 are to stimulate socio-economic development by attracting and facilitating foreign investment. Other relevant laws include: the Income Tax Act, the Customs Act, the Procurement Act of 2003, the Companies Act of 1991, the Securities Act of 1998, and the Small Business Act. Regulatory actions are still required for much of this legislation to be effectively implemented. The Companies Act provides special provisions for companies incorporated outside of Guyana called “external companies.”
Guyana has no known examples of executive interference in the court system that have adversely affected foreign investors. The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The 2020 World Bank’s Doing Business Report, states that it takes 581 days to enforce a contract in Guyana.
Competition and Anti-Trust Laws
The Competition Commission of Guyana was established under the Competition and Fair Trading Act of 2006. The Competition and Fair Trading act seeks to promote, maintain, and encourage competition; to prohibit the prevention, restriction, or distortion of competition and the abuse of dominant positions in trade; and, to promote the welfare and interests of consumers. The Competition Commission and Consumer Affairs Commission (CCAC) is responsible for investigating complaints by agencies and consumers, eliminating anti-competitive agreements, and may institute or participate in proceedings before a Court of Law.
Expropriation and Compensation
The government can expropriate property in the public interest under the Acquisition of Land for Public Purposes Act 2001. There is adequate legislation to promote and protect foreign investment. However, the effectiveness of implementation remains cumbersome. Many reports view the judicial system as being slow and ineffective in enforcing legal contracts. There have been no recent cases of expropriation. All companies are encouraged to conduct due diligence and seek appropriate legal counsel for any potential questions prior to doing business in Guyana.
Guyana is a party to the International Centre for Settlement of Investment Disputes (ICSID Convention). Additionally, Guyana has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), which went into force in December of 2014.
Investor-State Dispute Settlement
Guyana does not have a bilateral investment treaty with the United States. Negotiations began in 1993 but broke down in 1995. Since then, the two countries have not conducted subsequent negotiations.
Double taxation treaties are in force with Canada (1987), the United Kingdom (1992), and CARICOM (1995). Other double taxation agreements remain under negotiation with India, Kuwait, and the Seychelles. The CARICOM-Dominican Republic Free Trade Agreement provides for the negotiation of a double taxation agreement, but no significant developments have occurred since March 2009.
There are two ongoing investment disputes involving U.S. interests in Guyana. U.S. company Atlantic Tele-Networks owns 80 percent of Guyana Telephone and Telegraph (GTT). The current administration would like to end GTT’s monopoly on international data transmissions and increase competition. GTT’s competitor, Digicel, is allegedly sending data to a satellite facility in Suriname, illegally bypassing GTT’s international data link. Despite GTT’s protests to the government, Digicel has continued to operate, apparently in violation of the monopoly agreement. GTT is also accused of owing $44 million in outstanding taxes since 1991, which could be used to negotiate out the monopoly. All three issues are linked, and negotiations between the government and GTT are proceeding. U.S. company Caribbean Telecommunications Ltd. has filed a lawsuit against Guyana Telephone and Telegraph (GTT), alleging that GTT engaged in unfair trade practices to cancel the company’s license to provide cellular services in Guyana.
International Commercial Arbitration and Foreign Courts
International arbitration decisions are enforceable under the Arbitration Act of British Guiana of 1931, as amended in 1998. The Act is based on the Geneva Convention for the Execution of Foreign Arbitral Awards of 1927. The GoG enforces foreign awards by way of judicial decisions or action, and such awards must be in line with the policies and laws of Guyana.
According to the 2020 World Bank’s Doing Business Report, resolving disputes in Guyana takes 581 days, and costs 27 percent of the value of the claim on average. According to many businesses, suspected corrupt practices and long delays make the courts an unattractive option for settling investment or contractual disputes, particularly for foreign investors unfamiliar with Guyana.
The GoG has set up the Commercial Court has been set up to expedite commercial disputes, but this court only has one judge presiding, and companies have reported that it is overwhelmed by a backlog of cases. The Caribbean Court of Justice, based in Trinidad and Tobago, is Guyana’s court of final instance.
The 1998 Guyana Insolvency Act provides for the facilitation of insolvency proceedings. The Financial Institutions Act of 2004, gives the Central Bank power to take temporary control of financial institutions in trouble. This Act provides legal authority for the Central Bank to take a more proactive role in helping insolvent local banks.
According to data collected by the World Bank Doing Business Report, resolving insolvency in Guyana takes three years on average and costs 28.5 percent of the debtor’s estate, with the most likely outcome being that the company will be sold piecemeal. The average recovery rate is 18 cents on the dollar. Globally, Guyana stands at 163 in the ranking of 190 economies on the Ease of Resolving Insolvency Report.
4. Industrial Policies
Investment Incentives are designed to advance broader policy goals, such as boosting research and development or promoting regional economies. Guyana’s economy is undergoing economic transformation. The current administration identified a green agenda through its Green State Development Strategy which seeks to develop a “green economy” through supporting sustainable sectors such as renewable energy, agriculture, and manufacturing. The GoG provides tax concessions for these priority sectors.
Guyana offers an array of incentives to foreign and domestic investors alike in the form of exemption from various taxes, accelerated depreciation rates, full and unrestricted repatriation of capital, profits, and dividends. The first point of contact in applying for tax concessions is the Guyana Office for Investment (GO-INVEST). The purpose of GO-INVEST is to promote and encourage investment in Guyana. The GoG encourages investment in the following industries: agriculture and agro-processing, light manufacturing, and services. Guyana was awarded the “Best Eco-Tourism Award at the ITB global travel fair in Berlin, Germany. Conde Nast Traveller magazine listed Guyana as one of its suggested 20 destinations to visit in 2020. Research and Development
Research and Development
The GoG’s research and development is decentralized. For the rice industry, the Guyana Rice Development Board creates new variants of rice and the Guyana Sugar Corporation has an extensive program to create various variations of sugar cane. The Ministry of business has a business incubator program which supports the development of new entrepreneurs. University of Guyana is widely viewed as a major stakeholder in research and development. Foreign firms are encouraged to initiate research and development initiatives. ExxonMobil has developed partnerships with the University of Guyana and Conservation International for research and development.
Opportunities can be found on the following websites:
Guyana Office for Investment: http://goinvest.gov.gy/investment/investment-guide/
The National Procurement & Tender Administration (NPTA): http://www.npta.gov.gy/
National Industrial & Commercial Investment Limited: http://www.privatisation.gov.gy/
Ministry of Finance : https://finance.gov.gy/procurements/
Foreign Trade Zones/Free Ports/Trade Facilitation
Guyana does not operate free trade zones. However, consideration is ongoing for establishing such zones in Lethem, a Guyanese town on the Brazilian border that relies heavily on commerce in both countries. The GoG announced plans to build a road from Lethem to Georgetown to provide a cheaper and faster method for transporting goods from Brazil to the Guyanese coast.
Guyana became the 53rd WTO member and first South American country to ratify the new Trade Facilitation Agreement (TFA). The WTO Secretariat received the country’s instrument of acceptance on November 30, 2015.
Performance and Data Localization Requirements
There are no data localization requirements. Foreign investors are not required to establish or maintain a certain amount of data storage within the country.
A requirement to hire locally at least 80 percent of employees is applied equally to domestic and foreign investment projects. Although no explicit government policy regarding performance requirements exists, some are written into contracts with foreign investors and could include the requirement of a performance bond. Some contracts require a certain minimum level of investment. Investors are not required to source locally, nor must they export a certain percentage of output. Foreign exchange is not rationed in proportion to exports, nor are there any requirements for national ownership or technology transfer.
5. Protection of Property Rights
Guyana ranks 128 out of 190 countries in the 2020 World Bank ranking for Ease of Business registering property. Guyana has a dual registry system of property rights with distinct requirements, processes, and enforcement mechanisms. The two types of registry systems are deeds (Deeds and Commercial Registry) and title (Land Registry) registries that operate in separate jurisdictions, which in theory helps avoid the problem of double entry and dual registration. Companies have complained about Guyana’s property rights being overly bureaucratic and complex, with opaque regulations that overlap and compete. Some report that this affects the proper allocation, enforcement, and effectiveness of property rights, as well as the efficiency of property-based markets, such real estate and financial markets (especially primary ones, such as mortgage markets). The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The World Bank’s Doing Business report 2020 reports it takes 581 days to enforce such contracts.
Intellectual Property Rights
Upon independence in 1966, Guyana adopted British law on intellectual property rights (IPR). Guyana’s Copyright Act is dated 1956, and its Trademark Act and Patents and Design Act are dated 1973. Local contacts report that numerous attempts to pass comprehensive legislative updates to this legislation have been unsuccessful. Piecemeal modernization amendments contained in the Geographic Indication Act of 2005, the Competition and Fair Trading Act 2006, the Business Names Registration Act 2000, and the Deeds Registry Authority Act 1999 have offered additional protection to local products and companies.
No modern legislation exists to protect the foreign-registered rights of investors. Guyana joined the World Intellectual Property Organization (WIPO) and acceded to the Berne and Paris Conventions in late 1994. Guyana has not ratified a bilateral intellectual property rights agreement with the United States. The Granger administration has drafted intellectual property rights legislation which has yet to be tabled in Parliament.
Many businesses reported registration time for a patent or trademark may take in excess of six months. However, there is a lack of effective enforcement to protect intellectual property rights. Patent and trademark infringement are common, as is evident among local television broadcasts of pirated and rebroadcasted TV satellite signals. Media sources reported that piracy of foreign academic textbooks is common. Guyana’s laws have not been amended to fully conform to the requirements of the Trade Related Intellectual Property Rights (TRIPS) Agreement.
Guyana is not listed on USTR’s Special 301 Report to congress or the Notorious Markets List.
The law provides criminal penalties for corruption by officials, but the government generally does not enforce the law effectively or uniformly. The relevant laws enacted include: the Integrity Commission Act, State Assets Recovery Act, and the Audit Act. Officials appear to engage in corrupt practices at times with impunity. Several media outlets reported on government corruption in recent years and it remains a significant public concern. Media and civil society organizations continued to criticize the government for being slow to prosecute corruption cases. Although the government passed legislation in 1997 that requires public officials to disclose their assets to an Integrity Commission prior to assuming office, media reports suggest that a significant section of public officials did not honor this requirement in 2019.
Widespread concerns remain about inefficiencies and corruption regarding the awarding of contracts, particularly with respect to concerns of collusion and non-transparency. In his annual report, the Auditor General noted continuous disregard for the procedures, rules, and the laws that govern public procurement system. There were reports on overpayments of contracts and procurement breaches. Nevertheless, the country has made some improvements. According to Transparency International’s 2019 Corruption Perceptions Index (CPI), Guyana is ranked 85 out of 180 countries for perceptions of corruption, advancing 8 spots in comparison to 2018.