North Side MLA Ezzard Miller told a West Bay audience last week that the Cayman Islands government had “done nothing” with a proposal for a Fair Trade Commission he introduced in the Legislature last year.
The private members’ motion, made by Mr. Miller in early 2010, sought in part to eliminate the practice of ‘fronting’; where a Caymanian becomes a local partner of a company with purported 60 per cent ownership, but in reality retains little or any control over the company’s operations and does not receive 60 per cent of the business profits.
The Local Companies (Control) Law requires that all companies maintain at least 60 per cent Caymanian ownership, unless there is special exemption granted or the industry itself is governed under another set of laws.
“A Fair Trade Commission…would create a level playing field for Caymanians,” Mr. Miller said last week during a concerned citizens group meeting at Sir John A. Cumber Primary School. “Everything that comes to parliament, it’s about making things easier for a foreign person to come here and do business.”
The North Side MLA said he was particularly concerned about individuals with “deep pockets” who could simply outlast the local competition, driving it out of business. Mr. Miller made no secret at last week’s meeting that he considered the Dart corporation one of those entities.
“I have been very concerned for a long time about our government’s continued relationship with the Dart Group,” he told the West Bay audience. “These people have the money and the economic means to do whatever they want to do.”
The Caymanian Compass contacted Dart representatives last week for a response to Mr. Miller’s comments but received nothing by press time.
At the time Mr. Miller’s motion was debated in the Legislative Assembly, Premier McKeeva Bush said he had given instructions to the Trade and Business Licensing Board not to issue new licences to designated businesses unless they were entirely owned by Caymanians. Some of those businesses in a long list read by Mr. Bush included; watersports, taxi and tour operators, beauty salons and barber shops, gardening and landscaping, auto repair, car washes, commercial fishing, private security companies, radio stations, real estate businesses, plumber and trucking services to name a few.
Mr. Bush said at the time that already established businesses in those areas that were not fully Caymanian-owned would be allowed to carry on.
However, Finance Ministry Chief Officer Dax Basdeo also indicated earlier this year that the ministry was looking at a revamp of the trade and business licensing process that could lead to higher Caymanian ownership requirements in many industries.
The proposal set out by Mr. Basdeo in February attempts to accomplish two things: first, to offer greater protection against competition for Caymanian-owned businesses in established industries and second, to allow for greater foreign investment in industries that may have little to no presence in Cayman right now.
There would be two general types of business licences created under the proposed revisions to the law, Mr. Basdeo said.
One category, the “reserved” business, would be strictly for 100 per cent Caymanian-owned companies.
“We have things to consider such as artisans, handicraft businesses, small convenience stores, watersports businesses; these are things that are being considered that should be reserved for 100 per cent Caymanian ownership,” Mr. Basdeo said.
Under the other category, “restricted” businesses, some foreign ownership would be allowed. Exactly how much foreign ownership would depend on the type of business being conducted, Mr. Basdeo said.
“For instance, if we want to encourage more tech businesses, what we could have is a provision that says ‘if you’re a tech business, you can have 80 per cent foreign ownership’. That would help encourage more foreign investors to come into the country…and hire Caymanians as well.
“If we have more mature industries perhaps in terms of auto care, or beauty salons or taxi and tour buses…perhaps we could have more restrictive policies, maybe 90 per cent Caymanian ownership,” he said.
“In some sense, that’s a more restrictive way of doing investment,” Mr. Basdeo said. “[The new proposal] creates a better policy tool for government; a way to control the flow of investment into the country and to ensure Caymanians can benefit.”
Mr. Basdeo said the issue was merely at the discussion stage and that no finalised legislation had been sent to lawmakers.