2017 Investment Climate Statements: Guyana

Policies towards Foreign Direct Investment (FDI)

There are no significant laws and practices that discriminate against foreign investors. Foreign direct investment (FDI) into Guyana is actively encouraged and seen by the Government of Guyana (GoG) as critical to Guyana’s economic development. Numerous incentives are offered to investors. Despite these incentives, Guyana’s long-term record in attracting private-sector investment remains poor. Investment productivity, as measured by the Incremental Capital/Output Ratio (ICOR), has historically been low (USD 27 of investment to generate one U.S. dollar of extra output, as measured in 2007). More recent calculations of the ICOR are not available for Guyana.

The GoG supports a traditional investment facilitation agency, the Guyana Office for Investment (GO-Invest). GO-Invest focuses primarily on agriculture and agro-processing, tourism, manufacturing, information and communication technology (ITCs), 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. A recent audit of GO-Invest showed that the agency suffered from mismanagement. However, GO-Invest now has a new Chief Executive Officer, who is tasked by Guyana’s Ministry of Business to help improve operations within the organization in support of interested potential investors.

Over the past decade, the GoG enacted new laws or amended existing ones to encourage FDI, with mixed levels of success. Due to the state’s significant role in the domestic economy and the preference for centralized decision-making, relatively large foreign investments often receive intense political attention. The current administration is roundly criticized for its poor record so far in attracting new FDI, even though leadership signaled its intention to attract FDI through its various Embassies and Missions abroad.

In 2016, the GoG launched its new Green Development Strategy (GDS), a template for greening the economy by transitioning Guyana towards renewable, clean, and cheaper sources of energy. The GDS also includes a comprehensive Coastal Zone Management Plan to protect human habitation, coastal economic sectors, and coastal ecosystems. Finally, the GDS encourages ‘green’ enterprises and jobs, and an educational curriculum that incentivizes ‘green’ (or Science Technology Engineering Math (STEM)-focused) education in schools. The Ministry of the Presidency and Ministry of Natural Resources are two of the critical agencies in this process.

Additionally, the Government of Norway entered into an agreement to reward Guyana for the protection of its tropical forest, carbon storage, and other ecological services. Depending on Guyana’s performance, Norway pledged to contribute up to USD 250 million if Guyana demonstrated continued low rates of deforestation and forest degradation. However, as of April 2015, Norway had only contributed USD 115 million. The GoG recently indicated that it is optimistic that it will receive the last tranche of funds. Furthermore, the GoG hopes this financial commitment, and the inclusion of incentives for forest conservation in the 2009 Copenhagen Accord, will lead to higher levels of eco-services payments in the coming years. Thus far, however, no other international donors have stepped forward in any substantial way to pay for Guyana’s ecosystem services.

Screening of FDI

There is no mandatory screening for FDI. The GoG, however, conducts de facto screenings of many investments in order to determine which businesses are eligible for special tax treatment and access to licenses, land, and approval for investment incentives. In spite of recent efforts to remove discretionary power from the various ministries, ministers still retain significant authority to determine how relevant laws, such as the Investment Act, Small Business Act, and Procurement Act, are applied.

In general, international investors receive the same treatment as local investors in Guyana. One exception is in the special approval required for local financing. Foreign borrowers applying for a loan of more than GY two million (USD 10,000) must request permission from the Minister of Finance. This requirement reflects Guyana’s preference for foreign investors to bring capital into the country.

Another exception exists in the mining sector, where ownership of property for small-and-medium-scale mining is restricted to citizens of Guyana. Foreigners may enter into joint-venture arrangements under which the two parties agree to jointly develop a mining property. There are no restrictions on the percentage of the investment shouldered by the foreign investor; these arrangements are strictly by private contract. However, such relationships are highly risky, and appropriate due diligence of any potential joint venture partners is highly encouraged and should be completed by any company hoping to do business in Guyana. This exception does not exist for large-scale mining operations.

Limits on Foreign Control and Right to Private Ownership and Establishment

Guyana’s constitution specifically protects the right of foreigners to own property or land in Guyana. Private entities may freely acquire and dispose of interests in business enterprises, although some newly privatized entities have limits on the number of shares that may be acquired by any one individual or entity (domestic or foreign). Similarly, the articles of association of some firms prohibit the issuance of more than a certain number of share transfers to any one individual or company in an effort to prevent attempts to gain control of such companies in the secondary market.

Foreign and domestic firms possess the right to establish and own business enterprises and engage in all forms of remunerative activity. Enterprises in mining, telecommunications, forestry, banking, and tourism sectors require licenses. Obtaining necessary licenses can be a time-consuming task. According to GO-Invest’s “Investor’s Roadmap,” the estimated processing time to obtain the approvals to lease state or government-owned lands may take one year. Some investors report much longer processing times.

Restrictions for 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 enter into joint-venture arrangements with Guyanese nationals, under which the two parties agree to jointly develop a mining property. However, these arrangements are strictly governed by private contracts, and there is no oversight of them by the sector’s regulatory agency, the Guyana Geology and Mines Commission. This type of relationship carries a high level of risk. Investors are encouraged to exercise proper due diligence when exploring their options.

Other Investment Policy Reviews

Guyana has been a World Trade Organization (WTO) member since 1995. Guyana underwent a WTO Trade Policy Review in September of 2015. According to the report, since its previous Review in 2009, Guyana’s economic performance improved, supported in particular by FDI and the expansion of private sector credit.

Gross domestic product (GDP) over the last several years was robust compared to several countries in the region. In 2016, Guyana reportedly grew 3.3 percent, a lower rate than the expect 4 percent for the year. Guyana was still one of the better-performing countries in the Caribbean, and the International Monetary Fund (IMF) reported an expected 3.5 percent growth rate for 2017. Guyana’s per capita GDP reached approximately USD 4,315 in 2016, up from around USD 2,360 in 2009. The annual inflation rate for 2016 was 1.3 percent.

Government policy is to encourage inward FDI. National treatment is applied to all economic activities, except for certain mining operations. During the review period, the GoG took actions to improve the business environment, such as lowering corporate income tax rates, restructuring property registration fees, and establishing a credit reporting system. Incentives for FDI include income tax holidays, and tariff and value-added tax (VAT) exemptions.

Business Facilitation

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 subject to a flat fee of GY 60,000 (roughly USD 300), and a company incorporated abroad is subject to a fee of GY 80,000 (USD 400) if its capitalization is below GY one million (USD 4,950); GY150,000 (USD 742) if its capitalization is between GY one million (USD 4,950) and GY three million (USD 14,851); and, GY 300,000 (USD 1,485) if it is greater than GY three million (USD 14,851). 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.

As mentioned earlier, GO-Invest is the GoG’s investment facilitation agency responsible for the promotion of foreign and local investment. GO-Invest also advises the GoG on the formulation and implementation of national investment policies and provides facilitation services to domestic and 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. 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

Guyana launched a “Micro-and-Small-Enterprise Development and Building Alternative Livelihoods for Vulnerable Groups” (MSED) project on October 14, 2013. The MSED project provides interest subsidies (up to five percent) and credit guarantee (equivalent to 40 percent) of a loan for micro and small enterprises. Under the MSED project, the maximum amount of loan facilitation available to each borrower is USD 150,000. By April 2015, 21 loans worth a total of USD 600,000 had been approved. Additionally, small grant funds (USD 1,500) were offered to small businesses in 17 sectors deemed as “low carbon sectors.” The low carbon sectors are identified in the Guyana Low Carbon Development Strategy and include fruits and vegetables agriculture, aquaculture, business processing and outsourcing services, and ecotourism.

Outward Investment

The GoG is focused on attracting inward investment into Guyana. However, GO-Invest is also the agency that supports Guyanese investors and exporters looking to operate overseas. There are no particular restrictions keeping domestic Guyanese investors from investing abroad.

Guyana does not have a bilateral investment treaty with the United States. Guyana has bilateral investment treaties with the United Kingdom, Germany, Cuba, China, Switzerland, South Korea, and Indonesia.

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. The United States and the GoG signed the Foreign Account Tax Compliance Act (FATCA) in October 2016, though FATCA is not yet in force in Guyana.

Transparency of the Regulatory System

In April 2006, Guyana’s Parliament passed the Competition and Fair Trading Act, which serves as a partial fix for the country’s lack of comprehensive anti-trust legislation. The Competition Act targets offenses such as price fixing, conspiracy, bid-rigging, misleading advertisements, anti-competitiveness, abuse of dominant position, and resale price maintenance. A Competition Commission with authority to review anti-competitive business practices exists, but remains understaffed.

Historical factors, added to Guyana’s small population and a limited economic base, led many sectors to be dominated by one or two firms. Bureaucratic procedures appear cumbersome and often require the involvement of multiple ministries. Investors often receive conflicting messages from various officials, causing difficulty in 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 Cabinet, a process that is commonly perceived as not transparent or fast. Attempts to reform Guyana’s many bureaucratic procedures have not succeeded in reducing red tape.

Draft pieces of legislation are available in the Parliament Library and on the National Assembly website (http://parliament.gov.gy/ ) for public review.

International Regulatory Considerations

Guyana has been a WTO member since 1995 and adheres to the Agreement of Trade-Related Investment Measures (TRIMS) guidelines.

Legal System and Judicial Independence

Guyana’s legal system, like most Commonwealth countries, follows the English Common Law system. Vestiges of the Roman-Dutch legal system still remain, especially in the areas of land tenure. In early 2005, legislative amendments allowed Guyana’s accession to the Caribbean Court of Justice as its final Court of Appeal.

Guyana’s Supreme Court of Judicature hears both criminal and civil matters. Therefore, the Supreme Court in its civil jurisdiction has the standing to hear intellectual property claims. Though the Constitution of Guyana provides for the independence of the judiciary, in practice the executive has some influence over the judicial branch of the government. The hearing of civil matters is a slow process and is perceived to be unfair. Judgments of other courts within the Commonwealth are considered judicial precedents if Guyanese laws are silent.

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. In order to redress this obstacle to investment, the GoG, with support from the Inter-American Development Bank (IDB), established a Commercial Court in June 2006. Given Guyana’s growth potential, there is need for expansion and strengthened capacity in the near future.

Laws and Regulations on Foreign Direct Investment

Sufficient legislation exists in Guyana to support foreign investment in the country, but implementation of relevant legislation continues to be inadequate. The objectives of the Investment Act of 2004 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.

There is no executive interference in the court system that has adversely affected foreign investors. The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The 2017 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 and Fair Trading Act of 2006 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 and to establish a Competition Commission for connected matters.

In support of the functioning of this Act, a Competition Commission was instituted. The Commission is responsible for reviewing all commercial activities, identifying those that adversely affect the economic interest of consumers; investigating businesses which do not comply with the Act; and, conducting inquires in connection with any matter falling within the provisions of the Act.

Expropriation and Compensation

As mentioned under the Laws and Regulations on Foreign Direct Investment, there is sufficient legislation in Guyana to promote and protect foreign investment. However, implementation of the legal framework remains inadequate, and the judicial system is slow and ineffective in enforcing legal contracts. There are no recent cases of expropriation. Section 14 of the Investment Act states that the government cannot expropriate any investment enterprise, or any asset of an investor except for very specific cases in accordance with Guyanese laws, and notes clearly that, per law, any expropriation must be non-discriminatory and investors must receive prompt and fair compensation. Investors that suffer from expropriation have right to access the High Court to claim and determine appropriate compensation. All companies should do due diligence and seek appropriate legal counsel for any potential questions prior to doing business in Guyana.

Dispute Settlement

ICSID Convention and New York Convention

Guyana is a member state to the International Centre for Settlement of Investment Disputes (ICSID Convention). Additionally, Guyana 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

Guyanese law allows for investor-state dispute settlement in local courts under Section 28 (1) and (2) of the Investment Act.

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 any subsequent negotiations.

There are two ongoing investment disputes involving U.S. interests in Guyana. A U.S firm that owns 80 percent of Guyana Telephone and Telegraph (GTT) has expressed concern over the GoG’s intentions to terminate GTT’s contractually guaranteed monopoly on land-line and international telecommunication services prior to its expiration. The GoG’s actions are linked to legislation passed in 2016 that aims to liberalize the telecommunications sector. The U.S firm and the GoG have had ongoing discussions to try to find a mutually acceptable agreement on the issue.

Another U.S company has filed a lawsuit against GTT, alleging that they engaged in unfair trade practices in order to have the claimant’s license to provide cellular services in Guyana cancelled.

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 fashioned from the Geneva Convention for the Execution of Foreign Arbitral Awards of 1927. Enforcement of foreign awards is done by way of judicial decisions or action, and must be in line with the policies and laws of Guyana.

According to the World Bank’s Doing Business report, resolving disputes in Guyana takes 581 days, costs 25.2 percent of the value of the claim, and requires an average of 36 procedures. 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.

A Commercial Court has been set up to expedite commercial disputes, but this court only has one judge presiding and remains currently overwhelmed by a backlog of cases.

To distinguish itself from the previous administration, which ignored several commercial judgments against Guyana by the Caribbean Court of Justice, the current administration has proactively agreed to respect court decisions.

Bankruptcy Regulations

The 1998 Guyana Insolvency Act provides for the facilitation of insolvency proceedings. According to data collected by the WB Doing Business report, resolving insolvency in Guyana takes three years on average and costs 29 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 141 in the ranking of 189 economies on the Ease of Resolving Insolvency.

The 2004 Financial Institutions Act 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.

Investment Incentives

Guyana offers potential investors, foreign and domestic alike, a broad spectrum of investment choices, ranging from more traditional industries (such as mining, sugar, rice, and timber) to non-traditional export sectors (such as aquaculture, agro processing, fresh fruits, and vegetables, light manufacturing, and value-added forest products) to services exports (such as tourism and information technology-enabled services). Many products receive duty-free or reduced-duty treatment in destination markets.

Additionally, Guyana enjoys considerable, established, commercially-viable mineral reserves, principally in gold, diamonds, and bauxite. Smaller deposits of manganese, copper, rare earths elements, and uranium also exist. There have been recent discoveries of lithium, but commercial viability, however, has not been definitively determined.

The Status of Aliens Act allows a non-resident of Guyana to acquire and dispose of assets and moveable and immoveable property in the same manner as a citizen of Guyana. The GoG treats domestic and foreign investors alike with regard to investment incentives. Guyana offers incentives based on specific criteria, such as location of an investment or investment in specific government-targeted sectors.

The 2003 Fiscal Enactments Act allows the Minister of Finance to grant exemptions from Corporate Tax for a period of five years to an investor if the activity demonstrably creates new employment in certain regions of the country (primarily hinterland regions). In the case of new economic activity, the minister may grant a tax holiday of up to 10 years if the activity falls under the following categories: non-traditional agro processing (excluding sugar refining, rice milling, and chicken farming); tourist hotels or eco-tourist hotels; information and communications technology (excluding retailing and distributing); petroleum exploration, extraction, or refining; and, mineral exploration, extraction, or refining. The Minister of Finance maintains final discretion over which investors receive corporate tax exemptions.

The Income Tax Act of 1998 provides for accelerated depreciation of plant and equipment pending approval of the Minister of Finance on a case specific basis. The GoG previously utilized the Act to provide export tax allowances for manufacturing or processing of non-traditional products exported to countries outside of the Caribbean Community and tax allowances for research and development.

The Minister of Finance maintains authority to approve exemptions and waivers from customs duty, excise tax, and value added tax on plant, equipment, machinery, and spare parts. Though not required, the government expects investors to submit business proposals to GO-Invest that outline the proposed project, the value of the investment, and employment to be generated from the investment in order to be considered for such incentives. GO-Invest reviews proposals and makes recommendations to the Guyana Revenue Authority (GRA) in accordance with the Customs Duties Order of 2003. The GRA determines whether imports comply with regulation and whether those materials are eligible for tax relief. GRA makes the final recommendation to the Minister of Finance whether to grant exemptions and waivers from customs duty, excise tax, and value added tax.

The GoG removed several of the fiscal concessions that were previously granted to businesses and many have claimed that this will have a negative impact on growth. In addition, the value added tax is now applied to certain activities that were previously exempted, such as services provided by medical institutions and private school tuition fees.

Similarly, the policy provides for a tax allowance for non-traditional exports to non-CARICOM countries. Traditional products include rice, sugar, bauxite, gold, diamonds, timber, petroleum, lumber, shrimp, molasses, and rum. The allowance ranges between 25 to 75 percent, and at least 10 percent of sales must be exported to qualify.

In certain circumstances, Guyana also offers duty-free imports and tax holidays to investors on request. A key factor in the determination of duty-free status and value added tax waiver is value addition. The authorities note that blanket approvals are not given. Instead each import consignment is reviewed individually. When granted, the GRA lowers or waives the duty and value added tax completely, based on the industry and item. The authorities note that tax holidays are less likely to be granted than duty-free status or a value added tax waiver.

A number of companies, both foreign and domestic, benefit from investment incentives, such as corporate tax exemption, income tax exemption, export tax exemption on non-traditional exports, and exemption from customs duty, excise tax, and value added tax.

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/ 

Foreign Trade Zones/Free Ports/Trade Facilitation

Guyana currently does not maintain any duty-free zones, although the Government of Guyana announced the possibility of establishing such zones in the Lethem area, on the border with Brazil.

Guyana became the 53rd WTO member and first South American nation 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

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.

Foreign investors are not required to establish or maintain a certain amount of data storage within the country.

Real 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 Registry) and title (Land Registry) registries that operate in separate jurisdictions, which in theory help to avoid the problem of double entry and dual registration. Over all, Guyana’s property rights system is overly bureaucratic and complex, with regulations that are overlapping and competing, and nontransparent. This affects the proper allocation, enforcement, and effectiveness of property rights, as well as the efficiency of all property-based markets, such as housing, land, commercial property, 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 2017 says it takes 581 days to enforce such contracts. Mortgage transactions in the Guyanese financial system are limited, and the term, as used locally, refers solely to consumer loans dedicated to the construction of a primary residence.

There are three types of land ownership in Guyana today: a) public land, which is 85 percent made of what used to be known as state and government lands; b) Amerindian land, which is 14 percent comprised of lands held in common by indigenous communities (such lands are titled to the individual community); and c) private land, which is about 1 percent land that can be transferred by either freehold or absolute grant. A freehold transfer can be made either through a transport system or through a land registration system that is based on the Torrens type registry. Absolute grants are used in cases in which agricultural land is being transferred for non-agricultural use. In such cases, the land will first be transferred to the state, becoming public land, and is then titled to an individual. Such grants require a presidential decree.

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. 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.

Registering a patent or trademark can take six months or longer, but even with a completed registration, no effective enforcement mechanisms exist to protect intellectual property rights. Patent and trademark infringement continues to be common. Local television stations, including the state-owned and operated National Communication Network (NCN), pirate and rebroadcast TV satellite signals with impunity. Most music, videos, and software for sale are pirated. Book piracy is also rampant, especially foreign textbooks; some estimates say illegally photocopied textbooks account for nearly one-third of local sales. HBO has recently accused a local firm of allegedly infringing its intellectual property rights.

Additionally, it was reported by the former head of the leading e-governance authority in Guyana that more than one-third of the computers used in government offices once utilized pirated software. The government has signaled its intention to ensure all software utilized by its computers is compliant and respects intellectual property rights and has already taken steps to correct this.

In 2001, the then-Ministry of Foreign Trade and International Cooperation and the Ministry of Legal Affairs drafted Trade Related Intellectual Property Rights (TRIPS) legislation, but the draft has not moved forward.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Resources for Rights Holders

Sandra Zuniga Guzman
Economic and Commercial Officer
Wynette Oudkerk
Economic and Commercial Specialist
Embassy of the United States of America
100 Duke and Young Streets
Kingston, Georgetown, Guyana
Phone: + (592) 225-4900-9 Ext. 4220 and Ext. 4213
Fax: + (592) 225-8597
Email: commercegeorgetown@state.gov
https://gy.usembassy.gov/

Capital Markets and Portfolio Investment

In Guyana, interest rates on capital loans typically range from 10 percent to 20 percent. The Minister of Finance must grant permission for a foreign investor to borrow more than USD 10,000 (GY2 million) from a local bank. The GoG sells Treasury Bills at auction to finance the public debt. Past attempts at private bond financing have failed, and private companies did not made any large bond offers in recent years.

The banking system in Guyana is liquid. Local bank statements reveal that deposits continue to increase even as loans remain flat, a trend that suggests the existence of a large informal, cash-only economy. Analysts estimate that informal economic activity accounts for 50 percent or more of Guyana’s total economy. Eager to lend money, but skeptical of Guyana’s legal system, banks claim an inability to find suitable local applicants for loans at prevailing interest rates.

Guyana adopted the Credit Reporting Act No. 9 of 2010, which guarantees consumers’ right to access their data. The first credit reporting bureau license was granted to company Creditinfo, which went into effect on July 15, 2013, and was open for business to the public starting December 1, 2013. The credit-reporting bureau has been working with banks and utility companies to compile reliable credit information for use by lenders. Lack of access to capital remains a serious barrier to entrepreneurship and business expansion in the country.

The Guyana Association of Securities Companies and Intermediaries Inc. (GASCI) was formed in 2003 and operates the Guyana Stock Exchange. GASCI consists of four member firms, all of which trade on the stock exchange. The Guyana Stock Exchange trades shares in companies that are either listed on the primary list or on the secondary list. Inclusion on the primary list is both time consuming and an expensive process. Thus far, only one company, Trinidad Cement Ltd., was able to register on the primary list. However, it voluntarily delisted from the Guyana Stock Exchange, with effect from January 18, 2016. The secondary list is composed of 16 companies and consists of those companies that are registered with the Guyana Securities Council (GSC) and, thus, eligible to trade. As of December 2015, total market capitalization was USD 717 million. Trade volume on the Guyana Stock Exchange remains very light due both to the limited number of companies and shares on offer.

The Guyana Securities Council (GSC) is the regulatory body for the securities industry. Since its creation in 2001, it struggles to obtain required disclosure information from listed, local firms.

Money and Banking System

The Central Bank of Guyana was established by virtue of the 1965 Bank of Guyana Ordinance. Guyana’s banking system remains underdeveloped. Inefficiencies and delays periodically plague the foreign currency market. In addition, most Guyanese banks are owned by large Guyanese companies that sell locally and export. Because Guyana has yet to develop an effective interbank trading system, some banks may be short of foreign exchange while others have currency available. Despite some businesses reporting currency shortages, the overall reserves of the Central Bank and commercial banks is more than sufficient for the amount of trading that occurs.

The six commercial banks are by far the most important financial institutions in Guyana with assets worth GY 443 billion (USD 2.2 billion) in 2015, equivalent to 78 percent of GDP. Figures for 2016 are not yet available.

Foreign Exchange and Remittances

Foreign Exchange

The Guyana dollar (GY) is fully convertible and transferable. According to the 2015 Bank of Guyana Annual Report, the average exchange rate was U.S. dollar to GY 205.50 at the end of 2015 (https://www.bankofguyana.org.gy/bog/images/research/Reports/ANNREP2015.pdf ). More recently, the exchange rate is under pressure, as evidenced by a recent rise in price reflecting a reported shortage of foreign currency by the private sector and Cambios (or exchange houses in Guyana). Consequently, the GoG was forced to introduce a stipulation limiting the spread between the buying and selling rate to three points in January. Since then, the Ministry of Finance and the Bank of Guyana have jointly noted that stabilizing the foreign exchange rate (which currently floats at GY 215-220 per one U.S. dollar) is of utmost priority to the GoG, though both stated that there is no shortage of dollars at the Bank of Guyana or Guyana’s reserves and retention bank accounts.

As noted above, Guyana generally has a floating exchange rate that is determined by supply and demand, which is predominantly driven by activities in Guyana’s three largest commercial banks. The government lightly intervened in support of the Guyanese dollar with some success, such as limiting the local conversion of Barbados and Trinidad and Tobago dollars to US dollars. The government will likely continue to intervene as necessary in defense of the Guyanese dollar and its international reserves, but is also committed to a free market floating exchange rate.

No limits exist on inflows or repatriation of funds, although there are spot shortages of foreign currency. Regulations also require that all persons entering and exiting Guyana declare all currency in excess of USD 10,000 to customs authorities at the port of entry.

In practice, many large foreign investors in Guyana use subsidiaries outside of Guyana to handle earnings generated by the export of primary products, including timber, gold, and bauxite. Those companies then advance funds to their local entities to cover operating costs.

Despite recent events, the Guyanese dollar is generally stable and its value against the U.S. dollar remained relatively unchanged in 2016. The GoG asserted that there is relative stability for its currency, underpinned by a sufficient flow of foreign exchange to the market. Per the GoG, the exchange rate is expected to return to its usual stability after the first trimester of the year, once demand stabilizes and the usual business transactions that bring U.S. dollars into Guyana recommence in full force.

Remittance Policies

There is no limit to the acquisition of foreign currency, although the government limits the amount that a number of state-owned firms may keep for their own purchases. Regulations on foreign currency denominated bank accounts in Guyana allow funds to be wired in and out of the country electronically without having to go through cumbersome exchange procedures. Foreign companies operating in Guyana experience no government-induced difficulties in repatriating earnings in recent years.

Guyana is neither an important regional nor offshore financial center. It also does not have any free trade zones. Money laundering is perceived as a serious problem and is linked to drug trafficking (principally cocaine), illegal gold trade, firearms, corruption, and fraud, as well as to the influx of foreign currency. Guyana has a large informal economy in which cash is preferred by both buyers and sellers for most transactions, making it highly vulnerable to money laundering. On November 20, 2013, the Caribbean Financial Action Task Force (CFATF) issued a statement classifying Guyana among jurisdictions with strategic AML/CFT deficiencies that had not made sufficient progress in addressing such deficiencies or complied with their CFATF Action Plan. However, as of November 2016, CFATF considers Guyana to have addressed the deficiencies previously identified and has no follow-up sessions with the country.

Sovereign Wealth Funds

Guyana does not currently have a Sovereign Wealth Fund. The government expressed its intention to create one, and draft legislation is currently with the Ministry of Finance for further development.

Private enterprises compete with state-owned enterprises (SOEs) under the same terms and conditions for market access, credit and other business operations, and licenses. Currently there are six SOEs in Guyana: the Guyana Sugar Corporation (GUYSUCO), the Guyana Oil Company Limited, Guyana Power and Light Inc., the National Communications Network, the Guyana National Printers, and the Georgetown Marriott Hotel. The corporate governance structure of Guyanese SOEs requires that senior management report to a chief executive officer, who reports to a board of directors, who in turn reports to a government minister. Political interventions occur in the management of SOEs because their boards of directors are filled through political appointments directed by the Office of the President.

The National Industrial and Commercial Investments Limited (NICIL), a private limited company, acts as subscriber and manager of the government’s shares, stocks, and debentures of any company, cooperative societies, or other corporate body. It also manages government-owned real estate properties, including their acquisition, disposal, or rental. Managing the government’s shareholdings and minimizing conflict of interests are NICIL’s main functions.

During the 1990s, Guyana underwent a significant privatization process, divesting many of its holdings in the banking, telecommunications, agriculture, and manufacturing sectors. Since then, the pace of privatization has slowed. Since 2003, the government has privatized only two entities: the National Bank for Industry and Commerce, which now does business as Republic Bank; and the National Edible Oil Company, acquired by a biofuels company. Furthermore, the state reduced its participation in two of Guyana’s leading bauxite mining companies, the Aroaima Mining Company and Linmine Bauxite.

The Public Corporation Act requires public corporations to publish an annual report no later than six months after the end of the calendar year. These financial reports must be audited by an independent auditor.

Guyana is not a member of the Organization for Economic Cooperation and Development (OECD) and, as such, does not have OECD guidelines on corporate governance for SOEs.

Privatization Program

Foreign investors generally have equal access to privatization opportunities, even though the privatization process may not be wholly transparent. For some larger operations, foreign investment is openly preferred. Since 1992, the GoG has privatized 16 out of 22 state-owned enterprises (SOEs). Only the six companies mentioned above remain as SOEs. Most large-scale investments in Guyana’s infrastructure are government projects financed by international financial institutions, with the Inter-American Development Bank (IDB) being the government’s largest lender. U.S. firms are generally given equal access to these projects through a public bidding process. In some cases, allegations are made that this bidding process is less than transparent. In cases where an international financial institution (IFI) funding was involved in the project, such allegations were credibly addressed. In cases where the project relied solely on Government of Guyana funds, redress was more problematic to achieve.

Compared to responsible business conduct (RBC) norms in North America and Europe, Guyana-based businesses lag in adopting RBC policies and activities. Though many businesses engage in charitable acts, the totality of these deeds does not constitute good RBC practices. Guyanese consumers generally are not aware of RBC principles and do not demand them from local businesses they patronize. The Government of Guyanese expressed the hope that large multinational companies will lead the way on RBC practices, setting an example for smaller local firms to follow, particularly in the extractive industries sector.

Allegations of corruption remain common. According to Transparency International’s 2016 Corruption Perceptions Index (CPI), Guyana is ranked 108 out of 176 countries for perceptions of corruption, improving by 11 slots from its rank as 124 the previous year. Guyana ratified the Inter-American Convention Against Corruption (IACAC), and bribery is established as a criminal offense under Guyanese law. Although the government passed legislation in 1997 that requires public officials to disclose their assets to an Integrity Commission prior to assuming office, the Integrity Commission has not been constituted and remains inoperative. Public officials’ compliance with the legislation is, therefore, uneven.

The Procurement Act of 2003 provides for the establishment of an oversight body, a Public Procurement Commission and the National Procurement and Tender Administration Board (NPTAB), which handles day-to-day operations. The Minister of Finance appoints the members of this Board. The Public Procurement Commission’s (PPC) job is to ensure transparency and accountability throughout the government procurement process, including in regards to the NPTAB’s operations.

The current coalition APNU-AFC Government stated before it came into office that one of its top priorities would be the timely appointment of the PPC. On November 2, 2016, it announced the appointment of five members to the PPC. The Commissioners subsequently selected a chairperson.

There are widespread concerns 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 systems.

The Criminal Law Act classifies both corruption and bribery as illegal. Offences carry a penalty of GY 390,000 (USD 2,000) and three to seven years imprisonment.

On April 16, 2008, Guyana ratified the United Nations Convention against Corruption. Guyana is neither a member of the OECD nor a signatory to OECD Anti-Bribery Convention. Guyana is a member of the Organization of American States (OAS) and ratified the Inter-American Convention against Corruption on December 11, 2000.

The World Economic Forum’s Global Competitiveness Report 2015-2016 identified inefficient government bureaucracy as the largest obstacle to doing business in Guyana, followed by corruption. Corruption discourages potential foreign direct investments and foreign investors, and it also undermines economic development and growth.

As mentioned above, Guyana ratified the United Nations Convention against Corruption in 2008. Guyana is neither a member of the OECD nor a signatory to OECD Anti-Bribery Convention.

Resources to Report Corruption

The Transparency Institute of Guyana
Reverend Father Compton Meerabux
Transparency International Guyana
79B Cowan Street, Kingston,
+(592) 231-9586
infotransparencygy@gmail.com

Historically, political and ethnic violence occur in Guyana, and political protests can turn violent. The 2015 national elections, however, were the third successive iteration in which there was no significant communal violence. The 2015 election period saw a few isolated incidences of unrest, but no one was seriously injured, and the police did not resort to the use of force. There have been no incidents of political violence since the change in government in May 2015.

The Bank of Guyana estimates that, in 2015, Guyana’s labor force comprised 272,400 persons. In 2014, the World Bank estimated the unemployment rate at 11.1 percent. The government does not track either unemployment or job creation rates and underemployment is believed to be very high. (http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS/countries ).

Approximately 22 percent of workers (69,039) are unionized. Guyana currently has 18 trade unions. Thirteen of these unions fall under the umbrella of the Guyana Trade Union Congress. Four of these unions are members of the Federation of Independent Trade Unions of Guyana. The Trade Union Recognition Act of 1997 requires businesses operating in Guyana to recognize and collectively bargain with the trade union selected by a majority of its workers. The government, on occasion, unilaterally imposed wage increases. Guyana adheres to the International Labor Organization (ILO) Convention, protecting worker rights. Labor dispute mechanisms, such as arbitration, are commonplace.

Guyana has primary, secondary, and technical schools. The University of Guyana is the only public institution of higher learning in the country. There are a few other privately-owned institutions of higher learning. Given Guyana’s human resources challenges, most individual companies mount various programs to develop the capacity and skills their workers need, specific to the company’s services.

Emigration, particularly of skilled labor, poses a serious problem to employers in Guyana. Guyana’s net emigration rate in 2014 was estimated at 9.67 percent, the seventh highest in the world. The Private Sector Commission (PSC), a business organization in Guyana, reported that some university graduates are functionally illiterate. Even semi-skilled workers, such as masons, carpenters, and heavy duty operators, are in short supply. An International Monetary Fund (IMF) study in 2005 found that 89 percent of university-educated Guyanese eventually leave the country to pursue better employment options abroad. This represents the highest percentage of “brain drain” of any country. Large private sector companies report a turnover of about 20-25 percent of their workforce annually and experience difficulty in recruiting and retaining qualified employees. Skilled workers generally migrate to the United States, Canada, Europe, or other countries in the Caribbean.

The Overseas Private Investment Corporation (OPIC) renewed its support for U.S. investors in Guyana in 2000, following the settlement of a long-standing dispute between an OPIC client and the GoG.

The Export-Import Bank of the United States (EX-IM) offers insurance and financing to support U.S. firms exporting to Guyana. EX-IM will consider financing projects in which the total term of the financing is one to twelve months or one to seven years.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Foreign direct investment position data is not available for Guyana.
Table 4: Sources of Portfolio Investment

Portfolio investment data is not available for Guyana.

Sandra Zuniga Guzman
Economic and Commercial Officer
Wynette Oudkerk
Economic and Commercial Specialist
Embassy of the United States of America
100 Duke and Young Streets
Kingston, Georgetown, Guyana
Phone: + (592) 225-4900-9 Ext. 4220 and Ext. 4213
Fax: + (592) 225-8597
Email: commercegeorgetown@state.gov
http://georgetown.usembassy.gov