Executive Summary

The Government of Jamaica (GOJ) considers foreign direct investment (FDI) a key driver for economic growth and in recent years has undertaken macroeconomic reforms that have improved its investment climate.  According to foreign investors, after suffering from a stagnant economy for more than two decades and accumulating one of the highest debt-to-GDP ratios in the world, the GOJ has successfully implemented International Monetary Fund (IMF) programs since 2013.  Under consecutive IMF programs, the GOJ replaced its discretionary investment incentives with legislation that simplified the income tax regime and codified tax benefits for all investors. These efforts have contributed to Jamaica’s improvement in the World Bank’s Doing Business Report (DBR), from a ranking of 90 in 2013 to 75, out of 190 countries, in 2019.  Jamaica recently reduced or removed a number of distortionary taxes across a wide range of economic sectors. Jamaica’s improved creditworthiness, record-setting stock market growth, and proposed financial sector reforms may stimulate local investments in productive sectors.

Jamaica received USD 888 million in FDI in 2017 (latest data available), a significant improvement from the USD 593 million registered in 2013.  This made Jamaica a leading recipient of FDI in the Caribbean and among Small Island Developing States (SIDS). The United States, Canada, Spain, Mexico, and China continued to drive FDI in 2017.  The tourism, mining, energy, and construction sectors led investment inflows in 2017. Tourism remained fast growing with consistent increases in room stock, stopover arrivals, and revenues. Business process outsourcing (BPO), including customer service and back office support, continued to attract local and overseas investment.  Investments in improved air, sea, and land transportation have reduced time and costs for transporting goods and have created opportunities in logistics.

Companies have reported that Jamaica’s high crime rate, corruption, and comparatively high taxes inhibit its investment prospects.  In 2018, the country’s corruption perception ranking, by Transparency International, worsened from 68 in 2017 to 70 out of 180 countries.  Despite laws that provide for criminal penalties for corrupt acts by officials, there were numerous reports of government corruption during the year and officials appeared to engage in corrupt practices with impunity.  Jamaica implemented critical initiatives to reduce crime in 2018, including the declaration of three States of Emergency in violence-ridden area of the island. These efforts contributed to a 20 percent decrease in the murder rate in 2018, though Jamaica still remains among the most violent countries in the hemisphere.

The high cost of energy – about three times higher than in the United States – primarily due to a dependence on allegedly inefficient petroleum-based power plants and outdated electricity infrastructure, has been identified as a significant impediment to Jamaica’s competitiveness.  With that said, Jamaica’s ongoing energy sector transformation has become increasingly attractive to U.S. investors. Additional challenges that businesses complain of include an inefficient government bureaucracy, slow growth, a price-sensitive economy, and low labor productivity.

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 70 of 180 http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2019 75 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2018 84 of 126 https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, stock positions) 2018 $167 http://www.bea.gov/international/factsheet/ 
World Bank GNI per capita 2018 $4,760 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Government of Jamaica (GOJ) is open to foreign investment in all sectors of its economy, and is currently in the process of developing a National Investment Policy to guide future foreign direct investment (FDI) reform.  The GOJ has also made significant structural changes to its economy, under International Monetary Fund (IMF) guidance over the past six years, resulting in an improved investment environment. Since 2013, Jamaica’s Parliament passed numerous pieces of legislation to improve the business environment and support economic growth through a simplified tax system and broadened tax base.  The establishment of credit bureaus and a Collateral Registry under the Secured Interest in Personal Property (SIPP) legislation are improving access to credit. Jamaica made starting a business easier by consolidating forms and made electricity less expensive by reducing the cost of external connection works. The GOJ implemented an electronic platform for tax payments and established a 90-day window for development approvals.

The GOJ’s public procurement regime was amended, with effect from April 2019, to include provisions for domestic margins of preference, affording preferential treatment to Jamaican suppliers in public contracts in some circumstances, and setting aside a portion of the government’s procurement budget for local micro, small, and medium enterprises.  Notwithstanding, U.S. businesses are encouraged to participate in GOJ open procurements, many of which are published in media and via the government’s electronic procurement website: https://www.gojep.gov.jm/.

With Jamaica’s debt to GDP ratio having decreased to approximately 96 percent, the government used the attendant fiscal space to reduce and/or abolish a number of distortionary taxes effective April 2019.

Jamaica’s commitment to regulatory reform is an intentional effort to become a more attractive destination for foreign investment.  According to the World Bank’s “Doing Business 2019” report, Jamaica ranked 75 out of 190 economies, above average compared to Latin American and Caribbean countries.  The country made significant improvement in resolving insolvency, following the passage of new bankruptcy legislation and now ranks 6th in starting a business and a much improved 12th in getting credit.  Jamaica ranked 79 out of 140 countries in the World Economic Forum’s 2018 Global Competitiveness Index.  Some report that bureaucracy remains a major impediment, with the country continuing to underperform in the areas of trading across borders, registering property, paying taxes, and enforcing contracts.

Jamaica’s trade and investment promotion agency (JAMPRO) is the GOJ agency responsible for promoting business opportunities to local and foreign investors.  While JAMPRO does not institute general criteria for FDI, the institution targets specific sectors for investment and promotes Jamaican exports (see http://www.jamaicatradeandinvest.org/).

JAMPRO and the Jamaica Business Development Corporation assist micro, small, and medium-sized enterprises (MSME) primarily through business facilitation and capacity building.  MSMEs tend to consist of less than 10 employees. Such fee-based services are made available to foreign-owned MSMEs (see https://www.jbdc.net/).

Limits on Foreign Control and Right to Private Ownership and Establishment

All private entities, foreign and domestic, are entitled to establish and own business enterprises, as well as to engage in all forms of remunerative activity subject to inter alia, labor, registration, and environmental requirements.  Jamaica does not impose limits on foreign ownership or control and local laws do not distinguish between local and foreign investors. There are no sector-specific restrictions that impede market access. An amendment to the Companies Act, passed in 2017, requires companies to disclose beneficial owners to the Companies Office of Jamaica (ORC).  The law mandates that the company retain records of legal and beneficial owners for seven years.  The GOJ has proposed new legislation on the incorporation and operation of International Business Companies (IBC), which is designed to attract and facilitate a wide variety of international business activities to include: (1) holding companies providing asset protection for intellectual property rights, real property, and the shares of other companies; (2) serving as vehicles for licensing and franchising; (3) conducting international trade, and investment activities; (4) acting as special purpose vehicles in international financial transactions; and, (5) serving as the international headquarters for global companies.

The U.S. government is not aware of any discrimination against foreign investors at the time of initial investment or after the investment is made.  However, under the Companies Act, investors are required to either establish a local company or register a branch office of a foreign-owned enterprise.  Branches of companies incorporated abroad must register with the Registrar of Companies if they intend to operate in Jamaica. There are no laws or regulations requiring firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control.  Incentives are available to local and foreign investors alike, including various levels of tax relief.

Other Investment Policy Reviews

Jamaica concluded a third party trade policy review through the WTO in September 2017.  The WTO Secretariat’s recommendations are listed here: https://www.wto.org/english/tratop_e/tpr_e/tp459_e.htm

Jamaica has not undertaken any investment policy reviews within the last three years in conjunction with the Organization for Economic Cooperation and Development (OECD) or United Nations Conference on Trade and Development (UNCTAD).  The GOJ’s previous WTO review took place in 2011 and an OECD review took place in 2004.

Business Facilitation

Businesses can register using the “Super Form,” a single Business Registration Form for New Companies and Business Names.  The ORC acts as a “one-stop-shop,” effectively reducing the registration time to between one and three days.  Foreign companies can register using these forms, with or without the assistance of an attorney or notary. The “Super Form” is available under Forms at the ORC’s website (https://www.orcjamaica.com).

Outward Investment

While the GOJ does not actively promote an outward investment program, it does not restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Jamaica has bilateral investment treaties (BIT) in force with Argentina, China, France, Germany, Italy, Republic of Korea, Netherlands, Spain, Switzerland, United Kingdom, and the United States.  Jamaica has signed, but not yet put into force, BITs with Cuba, Egypt, Indonesia, Kuwait, Nigeria, and Zimbabwe.

Jamaica is a member of the Caribbean Community (CARICOM) and benefits from preferential trading arrangements under the CARICOM Single Market and Economy (CSME).  CARICOM countries also have preferential trading arrangements with the European Union, Canada, the United States, Colombia, the Dominican Republic, and Venezuela.  Jamaica has not signed a free trade agreement with the United States but in 2013 the United States and CARICOM signed a Trade and Investment Framework Agreement (TIFA).

Jamaica signed a bilateral Income Tax Treaty with the United States in 1980, which seeks to avoid double taxation while preventing income tax evasion.  Jamaica also has double taxation agreements with Canada, CARICOM, China, Denmark, France, Germany, Norway, Sweden, Switzerland, and the United Kingdom. In 2014, Jamaica and the United States signed an inter-government agreement for reciprocal information sharing as part of the implementation of the U.S. Foreign Account Tax Compliance Act (FATCA).

3. Legal Regime

Transparency of the Regulatory System

Jamaica’s regulatory systems are transparent and consistent with international norms.  Proposed legislation is available for public review at http://japarliament.gov.jm, and members of the public are invited to provide submissions through public meetings or targeted outreach to stakeholders for when there is a distinct policy shift or for sensitive changes.  There is no law that requires the rulemaking body to solicit comments on proposed regulation and no timeframe for the length of a consultation period when it happens. Furthermore, the law does not require reporting on public consultations but the government presents the consultations directly to interested stakeholders in one unified report.  Laws in effect are available at japarliament.gov.jm or moj.gov.jm.  Companies interested in doing business in a particular sector should seek guidance from the relevant regulator(s).

Jamaica is compliant with established benchmarks for public disclosure of its budget, the establishment and functioning of an independent and supreme audit body, and the award of contracts for natural resource extraction.  Additionally, Jamaica’s Public Debt Management Act (PDMA) of 2012 has codified a gradual reduction in its contingent liability or Government Guaranteed Loans (GGL), which were 7.4 percent of GDP in 2017. The PDMA targets a three percent GGL-to-GDP ratio by 2027.

International Regulatory Considerations

The GOJ tends to adopt Commonwealth standards for its regulatory system, especially from Canada and the United Kingdom.  In 2001, CARICOM member states established the Regional Organization for Standards and Quality (CROSQ) under Article 67 of the Revised Treaty of Chaguaramas.  CROSQ is intended to harmonize regional standards to facilitate the smooth movement of goods in the common market. Jamaica is also a full member of the WTO and is required to notify all draft technical regulations to the WTO Committee of Technical Barriers to Trade (TBT).

Legal System and Judicial Independence

Jamaica has a common law legal system and court decisions are generally based on past judicial declarations.  The Jamaican Constitution provides for an independent judiciary with a three-tier court structure. A party seeking to enforce ownership or contractual rights can file a claim in the Resident Magistrate or Supreme Court.  Appeals on decisions made in these courts can be taken before the Court of Appeal and then to the Judicial Committee of the Privy Council in the United Kingdom. The Caribbean Court of Justice (CCJ), in its original jurisdiction, is the court of the 15-member Caribbean Community (CARICOM), but Jamaica has not signed on to its appellate jurisdiction.

Jamaica does not have a single written commercial or contractual law and case law is therefore supplemented by the following pieces of legislation: (1) Arbitration (Recognition and Enforcement of Foreign Awards) Act; (2) Companies Act; (3) Consumer Protection Act; (4) Fair Competition Act; (5) Investment Disputes Awards (Enforcement) Act; (6) Judgment (Foreign) (Reciprocal Enforcement) Act; (7) Law Reform (Frustrated Contracts) Act; (8) Loans (Equity Investment Bonds) Act; (9) Partnership (Limited) Act; (10) Registration of Business Names Act; (11) Sale of Goods Act; (12) Standards Act; and, (13) Trade Act.  The commercial and civil divisions of the Supreme Court have jurisdiction to hear intellectual property claims.

Jamaica enforces the judgments of foreign courts through: (1) The Judgment and Awards (Reciprocal Enforcement) Act; (2) The Judgment (Foreign) (Reciprocal Enforcement) Act; and, (3) The Maintenance Orders (Facilities for Enforcement) Act.  Under these acts, judgments of foreign courts are accepted where there is a reciprocal enforcement of judgment treaty with the relevant foreign state. International arbitration is also accepted as a means for settling investment disputes between private parties.

The Jamaican judicial system has a long tradition of being fair but court cases can take years or even decades to resolve.  The new Chief Justice, appointed in 2018, has articulated plans to streamline the delivery of judgments, by bringing greater levels of efficiency to court administration and targeting throughput rates in line with international best practice.  Efforts are currently underway to clear the backlog of court cases by the end of 2019 and provide hearing date certainty and disposition of cases within 24 months, barring exceptional circumstances. The deployment of new courtrooms and the appointment of additional High Court Judges are indicators of Jamaica’s commitment to justice reform.

Challenges with dispute resolution usually reflect broader problems within the court system including long delays and resource constraints, according to many companies.  Subsequent enforcement of court decisions or arbitration awards is usually adequate, and the local court will recognize the enforcement of an international arbitration award.

A specialized Commercial Court was established in 2001 to expedite the resolution of commercial cases.  The rules do not make it mandatory for commercial cases to be filed in the Commercial Court and the Court is largely underutilized by litigants.

Jamaica ranked 127 in the 2019 Doing Business Report for the length of time taken for the enforcement of contracts in the courts.

Laws and Regulations on Foreign Direct Investment

There are no specific laws or regulations directly targeted to foreign investment.  Since foreign companies are treated similar to Jamaican companies when investing, the relevant sections of the applicable laws are applied equally.

Competition and Anti-Trust Laws

The Fair Trading Commission (FTC), an agency of the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF), administers Jamaica’s Fair Competition Act (FCA).  The major objective of the FCA is to foster competitive behavior and provide consumer protection. The Act proscribes the following anti-competitive practices: resale price maintenance; tied selling; price fixing; collusion and cartels; and bid rigging.  The Act does not specifically prohibit mergers or acquisitions that could lead to the creation of a monopoly. The FTC is empowered to investigate breaches of the Act and businesses or individuals in breach can be taken to court if they fail to implement the corrective measures outlined by the FTC. 

Expropriation and Compensation

Expropriation is generally not an issue in Jamaica, although land may be expropriated for national development under the Land Acquisition Act, which provides for compensation on the basis of market value.  The U.S. government is not aware of any current expropriation-related litigation between the Jamaican government and any private individual or company. However, the U.S. government assisted investors who had property expropriated during the 1970’s socialist regime, with a payment in one such case received as recently as 2010.

Dispute Settlement

ICSID Convention and New York Convention

Jamaica became a signatory to the International Center for Settlement of Disputes (ICSID) in 1965.  The country is a signatory to the New York Convention (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards), which governs the recognition and enforcement of foreign arbitration awards.  The Jamaican Arbitration (Recognition and Enforcement of Foreign Awards) Act enables foreign arbitral awards under the New York Convention to be enforced in Jamaica.

Investor-State Dispute Settlement

International arbitration is also accepted as a means for settling investment disputes between private parties.  Jamaica enforces the judgments of foreign courts through: (1) The Judgment and Awards (Reciprocal Enforcement) Act; (2) The Judgment (Foreign) (Reciprocal Enforcement) Act; and, (3) The Maintenance Orders (Facilities for Enforcement) Act.  Under these acts, judgments of foreign courts are accepted where there is a reciprocal enforcement of judgment treaty with the relevant foreign state. Jamaica does not have a history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Jamaica accepts international arbitration of investment disputes between foreign investors, the Jamaican government, and private parties.  Local courts recognize and enforce foreign arbitral awards. The Caribbean Court of Justice (CCJ) serves as the region’s international tribunal for disputes within the Caribbean Community (CARICOM) Single Market and Economy.  The Dispute Resolution Foundation and the Caribbean Branch of the Chartered Institute of Arbitrators both facilitate arbitration and rules of the Bilateral Investment Treaty (BIT) with Jamaica apply to qualifying investors. Other foreign investors are given national treatment and civil procedures apply.  Disputes between enterprises are handled in the local courts but foreign investors can refer cases to ICSID. There were cases of trademark infringements in which U.S. firms took action and were granted restitution in the local courts. While restitution is slow, it tends to be fair and transparent. The U.S. government is not aware of any cases in which State-Owned Enterprises (SOEs) have been involved in investment disputes.

Bankruptcy Regulations

Jamaica enacted new insolvency legislation in 2014 that replaced the Bankruptcy Act of 1880 and seeks to make the insolvency process more efficient.  The Act prescribes the circumstances under which bankruptcy is committed; the procedure for filing a bankruptcy petition; and the procedures to be followed in the administration of the estates of bankrupts.  The reform addresses bankruptcy; insolvency, receiverships; provisional supervision; and winding up proceedings. The law addresses corporate and individual insolvency and facilitates the rehabilitation of insolvent debtors, while removing the stigma formerly associated with either form of insolvency.  Both insolvents and “looming insolvents” (persons who will become insolvent within twelve months of the filing of the proposal if corrective or preventative action is not taken) are addressed in the reforms.

The Act contains a provision for debtors to make a proposal to their creditors for the restructuring of debts, subject to acceptance by the creditor.  Creditors can also invoke bankruptcy proceedings against the debtor if the amount owed is not less than the prescribed threshold or if the debtor has committed an act of bankruptcy.  The filing of a proposal or notice of intention to file a proposal creates a temporary stay of proceedings. During this period, the creditor is precluded from enforcing claims against the debtor.  The stay does not apply to secured creditors who take possession of secured assets before the proposal is filed; gives notice of intention to enforce against a security at least 10 days before the notice of intention or actual proposal is filed; or, rejects the proposal.  The 2014 legislation makes it a criminal offence if a bankrupt entity defaults on certain obligations set out in the legislation.

Jamaica ranked 33 on Resolving Insolvency in the 2019 World Bank’s Doing Business Report.  Bankruptcy proceedings take about a year to resolve, costing 18 percent of the estate value with an average recovery rate of 65 percent.

The text of the Bankruptcy and Insolvency Act can be found at: http://www.japarliament.gov.jm/attachments/341_Thepercent 20Insolvencypercent 20Actpercent 202014percent 20No.14percent 20rotated.pdf

4. Industrial Policies

Investment Incentives

The Fiscal Incentives (Miscellaneous Provisions) Act 2013 repeals most of the legacy incentive legislation and provides flexibility for new tax incentives only to be granted in relation to the bauxite sector, special economic zone activities, the relocation of corporate headquarters, and Junior Stock Exchange listings.  The Act also outlines the arrangement for transitioning to the new regime. Continuing beneficiaries may elect to keep old incentives such as relief from income tax and customs duty as well as zero-rated General Consumption Tax (GCT) status for imports.

Below are short descriptions of notable, recently enacted investment incentives.

Omnibus legislation – Provides tax relief on customs duties, additional stamp duties, and corporate income tax.  These benefits are granted under the following four areas:

(1) The Fiscal Incentives Act: Targets small and medium size businesses and reduces the effective corporate income tax rate by applying: (a) an Employment Tax Credit (ETC) at a maximum value of 30 percent; and (b) a capital allowance applicable to a broadened definition of industrial buildings.

(2) The Income Tax Relief (Large-Scale Projects and Pioneer Industries) Act: Targets large-scale projects and/or pioneering projects and provides for an improved and more attractive rate for the ETC.  Projects will be designated either as large-scale or pioneer based on a decision by Parliament and subject to an Economic Impact Assessment.

(3) Revised Customs Tariff: Provides for the duty free importation of capital equipment and raw material for the productive sectors.

(4) Revised Stamp Duty Act: Provides exemption from additional stamp duty on raw materials and non-consumer goods for the manufacturing sector.

Urban Renewal Act: Companies that undertake development within Special Development Areas can benefit from Urban Renewal Bonds, a 33.3 percent investment tax credit, tax-free rental income, and the exemption from transfer tax and stamp duties on the ‘improved’ value of the property.

Bauxite and Alumina Act: Under this Act, bauxite/alumina producers are allowed to import all productive inputs free of duties, Value Added Tax (VAT), and other port related taxes and charges.

The Foreign Sales Corporation Act: This Act exempts income tax for five years for qualified income arising from foreign trade.  U.S. law through the Tax Information Exchange Agreement (TIEA) reinforces this incentive.

Jamaica’s EX-IM Bank provides concessionary interest rate loans for trade financing, while the Development Bank of Jamaica offers reduced lending rates to the productive sectors.  Special tax incentives exist for companies that register on the Junior Stock Exchange.

Income Tax Act (Junior Stock Exchange): As of January 1, 2014, companies listed on the Junior Stock Exchange are not required to pay income tax during the first five years.

Special Economic Zone Act: In 2015, Jamaica passed legislation establishing Special Economic Zones (SEZs).  The SEZ Act repeals the Jamaica Free Zone Act, making way for: (1) the designation; promotion; development; operation; and, management of Special Economic Zones; (2) the establishment of a SEZ Authority; and, (3) the granting of benefits and other measures in order to attract domestic and foreign investments.

Research and Development

Foreign firms are allowed to participate in GOJ-financed or subsidized research and development programs, however, few opportunities exist for such programs.

Government Guarantee and Private-Public Partnership

The GOJ, through the PDMA of 2012, reduced the tendency of government to provide sovereign guarantees on loans, which often had to be converted into public debt.  The debt reduction imperatives built into successive IMF programs further stymied this propensity.

The GOJ, however, continues to actively encourage FDI utilizing the Public-Private Partnership (PPP or P3) model, to attract private financing.  Jamaica has successfully implemented a number of PPP projects to include the divestiture of the Kingston Freeport Terminal, the Sangster International Airport in Montego Bay, and Norman Manley International Airport in Kingston.  Jamaica seeks to expedite the divestment of government assets through PPPs and public listings in order to drive private capital to otherwise stagnant government assets.

Foreign Trade Zones/Free Ports/Trade Facilitation

Jamaica had approximately 200 companies in 190 free zone locations involved in business process outsourcing (BPO); warehousing and distribution; manufacturing; logistics; and merchandising.  However, following the passage of a new Special Economic Zone Act in 2015, existing free zone entities had until December 31, 2019 to transition to the new regime. The GOJ transitioned from free zone operations to special economic zones (SEZs) to comply with World Trade Organization (WTO) rules for middle-income countries under the WTO Agreement on Export Subsidies and Countervailing Measures.  The Jamaica Special Economic Zone Authority (www.jseza.com) regulates, supervises, and promotes the Special Economic Zone (SEZ).

SEZ operators benefit from a 12.5 percent corporate income tax rate (effective rate may be as low as 7.5 percent with the approval of additional tax credits); customs duty relief, General Consumption Tax (GCT) relief; employment tax credit; promotional tax credit on research and development; capital allowance; and a stamp duty payable of 50 percent.  Developers receive these benefits plus relief from income tax on rental income and relief from transfer tax. There is a non-refundable one-time registration fee and renewable annual fee to enter the regime.

Duty-free zones are primarily found in airports, hotels, and tourist centers and, as with special economic zone activities, do not discriminate on the basis of nationality.  Amendments have also been made to the Export Free Zones Act to allow for the establishment of Single Entity Free Zones, with individual companies now designated as free zones.

Performance and Data Localization Requirements

No performance requirements are generally imposed as a condition for investing in Jamaica, and government of Jamaica (GOJ) imposed conditions are not overly burdensome according to foreign investors.  The GOJ does not mandate local employment, although the use of foreign workers to fill semi-skilled and unskilled jobs is generally frowned upon, especially by trade unions. When requesting work permits for foreign workers, both local and foreign employers must describe efforts to recruit locally.  The GOJ requires a description of efforts to recruit locally. Some report of delays in obtaining work permits for foreign workers as the GOJ does not readily have data available to determine if the requisite skills exist in Jamaica.

The GOJ does not follow “forced localization,” requiring domestic content in goods or technology.  There are no requirements to provide the GOJ access to surveillance of data and there are no restrictions on maintaining certain amounts of data storage within the country.

5. Protection of Property Rights

Private entities, whether foreign or domestic, generally have the right to freely establish, own, acquire, and dispose of business enterprises and may engage in all forms of remunerative activity.

Real Property

Property rights are guaranteed by the Constitution.  Jamaica’s Registration of Titles Act recognizes and provides for the enforcement of secured interests in property by way of mortgage.  It also facilitates and protects the acquisition and disposition of all property rights, though working through Jamaica’s bureaucracy can result in significant delays.  In particular, it sometimes takes a long time for landowners to secure titles.

Approximately 55 percent of the land in Jamaica is registered, although a large percentage of those properties do not have current titles, as many families who pass land ownership from parent to child often do not go through the proper legal channels due to the cost and time involved.

Many businesses have reported that squatting is also a major challenge in Jamaica, with nearly 20 percent of the population living as squatters.  Three-quarters of squatters reside on government lands. Under the Registration of Titles Act, a squatter can claim a property by adverse possession (without compensating the owner for the land) if a person can demonstrate that he or she has lived on government land for more than 60 years, or on private property for more than 12 years undisturbed (including without any payment to the land owner).  There are no specific regulations regarding land lease or acquisition by foreign and/or non-resident investors.

The country’s World Bank Doing Business Report ranking for ease of “registering property” was 131 in 2019 due largely to the number of procedures and high costs involved.  Jamaica continues to outperform other Latin America and Caribbean countries in the time required to close a property transaction.

Registration of Titles Act: http://moj.gov.jm/sites/default/files/laws/Registrationpercent 20ofpercent 20Titles.pdf

Intellectual Property Rights

Jamaica has one of the stronger intellectual property (IP) protection regimes in Latin America and the Caribbean, according to the International Property Rights Index, although legislative and enforcement gaps still exist.  Jamaica is a member of the World Intellectual Property Organization (WIPO) and is a signatory of the Berne Convention. Jamaica and the United States have an Intellectual Property Rights Agreement and a Bilateral Investment Treaty, which provide assurances to protect intellectual property.  It is relatively easy to register IP, and the Jamaica Intellectual Property Office (JIPO) assists parties interested in registering IP and supports investors’ efforts to enforce their rights. Overall, protections across all types of IP are improving.

Law enforcement efforts to combat counterfeit and pirated goods are improving on the ground but border enforcement remains a challenge.  IP violations tend to be more in relation to physical goods, while electronic IP theft is less common.

The country’s trademark and copyright regimes satisfy the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), although the patent and design law is not TRIPS compliant.  A new Patent & Designs Bill, including new rules and fee structures, has been in drafting for a number of years but has not passed in Parliament. However, JIPO instituted administrative procedures to register U.S. patents for a nominal fee in order to protect U.S. rights holders.  The Geographical Indications Act (GI) of 2004 is now fully in force and TRIPS compliant, protecting products whose particular quality or reputation is attributable to its geographical origin. General law provides protection for trade secrets and protection against unfair competition is guaranteed under the Fair Competition Act.

In the area of copyright protection, amendments to the Copyright Act passed in June 2015 fulfilled Jamaica’s obligations under the WIPO Internet Treaties and extended copyright protection term from 50 to 95 years.  The Copyright Act complies with the TRIPS Agreement and adheres to the principles of the Berne Convention, and covers works ranging from books and music to computer programs. Amendments in June 1999 explicitly provide copyright protection on compilations of works such as databases and make it an offense for a person to manufacture or trade in decoders of encrypted transmissions.  It also gives persons in encrypted transmissions or in broadcasting or cable program services a right of action against persons who infringe upon their rights.

Jamaica, along with some other Caribbean countries, have been cited in the last several years’ Special 301 Report for the absence of compensation to performance rights organizations as well as due to concerns regarding unlicensed broadcasting of copyrighted television programming.

Enforcement

The Jamaica Constabulary Force (JCF) reported seizures of over USD 11 million of counterfeit goods in 2018.  The most commonly counterfeited goods include shoes, alcohol, cigarettes, clothing, handbags, and pharmaceuticals.  Jamaica’s border enforcement efforts are hampered by customs officers not having ex officio authority to seize and destroy counterfeit goods. Rights holders must first be provided with visual samples of suspect merchandise to verify the item as counterfeit, submit a declaration indicating the differences between the fake and actual brands, and provide an authorization to seize the merchandise.  The JCF established a specialized intellectual property unit within its counter terrorism and organized crime branch (C-TOC) in 2015 to boost IP enforcement.

Rights holders are responsible for paying the costs associated with storage and destruction of counterfeit goods.  Presently the Commissioner of Customs may grant up to 10 days for a rights holder to produce the required evidence and commitments before releasing suspected counterfeit goods that are in transit.

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/.

6. Financial Sector

Capital Markets and Portfolio Investment

Credit is available on market terms, and foreigners are allowed to borrow freely on the local market at market-determined rates of interest.  A relatively effective regulatory system was established to encourage and facilitate portfolio investment. Jamaica has had its own stock exchange, the Jamaica Stock Exchange (JSE), since 1969.  The JSE was rated the best performing stock exchange in the world, by Bloomberg, in 2015 and again in 2018. The Financial Services Commission and the Bank of Jamaica (BOJ), the central bank, regulate these activities.  Jamaica respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions.

Money and Banking System

At the end of 2018 there were 11 supervised deposit-taking institutions consisting of eight commercial banks, one merchant bank (Licensed under the Financial Institutions Act) and two building societies.  The number of credit unions shrank from 47 at the end of 2009 to 26 at the end of 2018. In the BOJ’s January 2019 report, commercial banks held assets of almost USD 11 billion at the end of September 2018.  Non-performing loans (NPL) of USD 155 million at end December 2018, were 2.5 percent of total loans. Three of the country’s eight commercial banks are foreign-owned. After a financial sector crisis in the mid-1990s led to consolidations, the sector has remained largely stable.

In October 2018, the GOJ took legislative steps to modernize and make the central bank operationally independent through the tabling of amendments to the Bank of Jamaica (BOJ) Act. The modernization program includes, inter alia, the institutionalization of the central bank independence, improved governance, and the transitioning of monetary policy towards inflation targeting.  These developments follow previous strengthening of the BOJ, in 2015, when it undertook independent responsibility for banking supervision. Jamaica’s financial governance framework is in line with international standards and legislative amendments continue to enhance the BOJ’s regulatory powers.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions on holding funds or on converting, transferring, or repatriating funds associated with an investment.  In 2017, the BOJ implemented a new system called the BOJ Foreign Exchange Intervention & Trading Tool (B-FXITT) for the sale and purchase of foreign exchange (FX) to market players.  The new system is a more efficient and transparent way of intervening in the FX market to smooth out demand and supply conditions.

Investment-related funds are freely convertible to regularly traded currencies, particularly into United States and Canadian dollars and British pounds.  However, foreign exchange transactions must be conducted through authorized foreign exchange dealers, “cambios,” and bureau de change. Foreign exchange is generally available and investors are free to remit their investment returns.

Remittance Policies

The country’s financial system is fully liberalized and subject to market conditions.  There is no required waiting period for the remittance of investment returns. Any person or company can purchase instruments denominated in foreign currency.  There are no restrictions or limitations on the inflow or outflow of funds for the remittance of profits or revenue. The country does not possess the financial muscle to engage in currency manipulation.     

Jamaica was listed among the Major Money Laundering Jurisdictions in the U.S. Department of State’s 2018 International Narcotics Control Strategy Report (INCSR).

The Caribbean Financial Action Task Force made public Jamaica’s fourth round Mutual Evaluation Report (MER) in January 2017 (https://www.cfatf-gafic.org/index.php/documents/4th-round-meval-reports).  Jamaica entered into an Observation Period until October 2019 to address deficiencies addressed in the MER.  Should Jamaica not address deficiencies listed in the MER, it will enter a formal monitoring period by the Financial Action Task Force.

Sovereign Wealth Funds

Jamaica does not have a sovereign wealth fund or an asset management bureau.

7. State-Owned Enterprises

As a condition of Jamaica’s Stand-By Agreement with the IMF, the GOJ is reforming the public sector to include State-Owned Enterprises (SOEs).  Jamaican SOEs are most active in the agriculture, mining, energy, and transport sectors of the economy. Of 162 public bodies, 56 are self-financing and are therefore considered SOEs as either limited liability entities established under the Companies Act of Jamaica or statutory bodies created by individual enabling legislation.  SOEs generally do not receive preferential access to government contracts. SOEs must adhere to the provisions of the GOJ (Revised) Handbook of Public Sector Procurement Procedures and are expected to participate in a bidding process to provide goods and services to the government. SOEs also provide services to private sector firms.  SOEs must report quarterly on all contracts above a prescribed limit to the Integrity Commission. Since 2002, SOEs have been subject to the same tax requirements as private enterprises and are required to purchase government-owned land and raw material and execute these transactions on similar terms as private entities.

Jamaica’s Public Bodies Management and Accountability Act (PBMA) requires SOEs to prepare annual corporate plans and budgets, which must be debated and approved by Parliament.  As part of the GOJ’s economic reform agenda, SOE performance is monitored against agreed targets and goals, with oversight provided by stakeholders including representatives of civil society.  The GOJ prioritized divestment of SOEs, particularly the most inefficient, as part of its IMF reform commitments. Private firms compete with SOEs on fair terms and SOEs generally lack the same profitability motives as private enterprises, leading to the GOJ’s absorbing the debt of loss-making public sector enterprises.

In 2012, the GOJ approved a Corporate Governance Framework (CGF) to promote improved performance by SOEs.  While Jamaican SOEs are not required to adhere to Organization of Economic Co-operation and Development (OECD) Guidelines on Corporate Governance, the CGF is based on international best practices and principles of corporate governance.

Jamaica’s public bodies report to their respective Board of Directors appointed by the responsible portfolio minister and while no general rules guide the allocation of SOE board positions, some entities allocate seats to specific stakeholders.  Under the CGF, persons appointed to boards should possess the skills and competencies required for the effective functioning of the entity. However, some board members are selected on the basis of their political affiliation. The Jamaican court system, while allegedly slow, is respected for being fair and balanced and in many cases has ruled against the GOJ and its agents.

Privatization Program

As a condition of Jamaica’s Stand-By Agreement with the IMF, the GOJ identified a number of public assets to be privatized from various sectors.  Jamaica actively courts foreign investors as part of its divestment strategy. In certain instances, the government encourages local participation.  Restrictions may be placed on certain assets due to national security considerations. Privatization can occur through sale, lease, or concession. Transactions are generally executed through public tenders but the GOJ reserves the right to accept unsolicited proposals for projects deemed to be strategic.  The Development Bank of Jamaica, which oversees the privatization program, is mandated to ensure that the process is fair and transparent. When some entities are being privatized, advertisements are placed locally and through international publications, such as the Financial Times, New York Times, and Wall Street Journal, to attract foreign investors.  Foreign investors won most of the privatization bids in the last decade.

While the time taken to divest assets depends on state of readiness and complexity, on average transactions take between 18 and 24 months.  The process involves pre-feasibility and due diligence assessments; feasibility studies; pre-qualification of bidders; and a public tender. In 2018, the GOJ signed a 25-year concession for the management and development of the Norman Manley International Airport in Kingston.  Other large privatizations include the 2003 privatization of Sangster International Airport in Montego Bay and the 2015 privatization of the Kingston Container Terminal port facility. The GOJ is in process of privatizing the Wigton Wind Farm, a 62-megawatt wind farm, through a public offering, and is developing a pipeline of additional privatization projects.  The GOJ also seeks to divest stagnant assets owned by large government entities such as the Urban Development Corporation and Factories Corporation of Jamaica.

List of current privatization transactions can be found at http://dbankjm.com/current-transactions/

8. Responsible Business Conduct

Responsible Business Conduct (RBC) among many Jamaican companies remains a nascent concept.  In 2013, the government provided additional financial incentives for corporations to support charity work through the Charities Act, under which corporations and individuals can claim a tax deduction on contributions made to registered charitable organizations.  Some large publicly listed companies and multinational corporations in Jamaica maintain their own foundations that carry out social and community projects to support education, youth employment, and entrepreneurship.

In 2018, the GOJ became party to the OECD’s Base Erosion and Profit Shifting Multilateral Convention, which updates the network of bilateral tax treaties and reduces opportunities for tax avoidance by multinational enterprises.  GOJ also became signatory to the Convention on Mutual Administrative Assistance in Tax Matters, effective March 1, 2019, having deposited instruments of ratification in November 2018.

9. Corruption

The law provides criminal penalties for corruption by officials but the government generally does not implement the law effectively.  Officials appeared to engage in corrupt practices at times with impunity. There have been numerous reports of government corruption in recent years and it remains a significant problem of public concern.  Media and civil society organizations continued to criticize the government for being slow and at times reluctant to prosecute corruption cases.

Under the Corruption Prevention Act, public servants can be imprisoned for up to 10 years and fined as much as USD 100,000 if found guilty of engaging in acts of bribery, including bribes to foreign public officials.

In 2017, Jamaica passed an Integrity Commission Act that consolidated three agencies with anti-corruption mandates into a single entity, the Integrity Commission, which now has limited prosecutorial powers.  The three agencies are the precursor Integrity Commission, which received and monitored statutory declarations from parliamentarians; the Office of the Contractor General (OCG), which monitored government contracts; and the Commission for the Prevention of Corruption, which received the financial filings of specified public servants.  A key area of concern for corruption is in government procurement. However, some investors have reported that successful prosecutions – particularly for high-level corruption – are rare.

Two Ministers of government demitted office between 2018 and March 2019, in the wake of corruption allegations.

Corruption, and its apparent linkages with organized crime, appear to be one of the root causes of Jamaica’s high crime rate and economic stagnation.  In 2018, Transparency International gave Jamaica a score of 44 out of a possible 100 on the Corruption Perception Index (CPI), demoting the island two spots from its ranking of 68th in 2017 to 70th globally.  U.S. firms operating in Jamaica express concern about corruption generally.  The apparent willingness of GOJ officials to engage in corrupt practices with foreign companies, according to some U.S. firms, places U.S. firms at a competitive disadvantage.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Jamaica ratified major international corruption instruments, including the Inter-American Convention Against Corruption and the United Nations Convention Against Corruption.  Jamaica is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Major Organised Crime and Anti-Corruption Agency (MOCA)

24hr Hotline: 1-800-CORRUPT (1-800-267-7878)
Email: info@moca.gov.jm

National Integrity Action

2 Holborn Road
Kingston 10, Jamaica
Telephone: 1 876 906 4371
Fax: 876-754-7951
Email: info@niajamaica.org

10. Political and Security Environment

U.S. businesses have identified crime as greater threat to foreign investment in Jamaica than political violence, as the country has not experienced political violence since the early 1980s.  Violent crime, rooted in poverty, unemployment, and transnational criminal organizations, is reportedly a serious problem in Jamaica. Sporadic gang violence and shootings are concentrated in specific inner city neighborhoods but can occur elsewhere.  Jamaica’s murder rate decreased by 21.9 percent in 2018 to 47 per 100,000, the third highest in Latin America and the Caribbean, according to InSight Crime.

This significant reduction is attributed largely to States of Emergency enacted over three violent-ridden areas of the island for the better part of 2018, all of which expired in January 2019.  Declaration of States of Emergency give police and military personnel the authority to search, seize, and arrest without being in possession of a warrant.

Some report that Jamaica also faces a significant problem with extortion in certain urban commercial areas and on large construction project sites.  Investors claim that the security challenges increase the cost of doing business as companies spend on additional security measures.

The U.S. Department of State assessed Kingston as a critical threat location for crime directed at or affecting official U.S. government interests.  U.S. companies with personnel assigned to Jamaica are strongly advised to conduct security and cultural awareness training.

Please refer to the Jamaica 2018 Crime and Safety Report from the Department of State’s Overseas Security Advisory Council (OSAC) for additional information (https://www.osac.gov/Pages/ContentReportDetails.aspx?cid=23208).

11. Labor Policies and Practices

Jamaica had an estimated labor force of 1.3 million as of October 2018 with 8.6 percent unemployment.  Women make up 46 percent of the labor force and have an unemployment rate of 11.2 percent. Unemployment is highest within the 20-24 age cohort.  Most Jamaicans are employed in services including the retail and tourism sectors, followed by construction, transportation, and communications. Since 1999, more Jamaicans have become trained in information technology and the business process outsourcing (BPO) industry currently employs more than 30,000 people.  No law requires hiring locals but foreign investors are expected to hire locals, especially for unskilled and lower skilled jobs. The security guard industry adopted the practice of employing workers on extended contracts to avoid some of the cost, including severance, associated with direct employment. Jamaica does not have a history of waiving labor laws to retain or attract investment and these laws tend to be uniform across the economy.

There are no restrictions on employers adjusting employment to respond to market conditions, but there are severance payment requirements if a position is made redundant.  Under the law, there is a distinction between a layoff and a redundancy. A layoff allows a temporary period without employment for up to four months. The Employment (Termination and Redundancy Payments) Act provides redundancy pay to employees who are let go with at least two years of continuous employment.  Workers with up to 10 years of employment are entitled to two weeks payment for every year worked, while workers with over 10 years employment are entitled to three weeks payment except in cases such as firing for cause. There are no unemployment benefits in Jamaica but low income Jamaicans have the option of applying for social benefits under a conditional cash transfer program referred to as the Program for Advancement though Health and Education (PATH).

The law provides for the rights of workers to form or join unions, to bargain collectively, and the freedom to strike.  Trade union membership accounts for about 20 percent of the labor force, although the movement weakened in recent years.  The law prohibits anti-union discrimination, although it is not uncommon for private sector employers to lay off union workers and rehire them as contractors.  Labor law entitles protections to all persons categorized as workers, although it denies contract workers coverage under certain statutory provisions, such as redundancy benefits.

Jamaica has an Industrial Disputes Tribunal (IDT) to which the Minister of Labor and Social Security may refer disputes that cannot otherwise be settled.  Arbitrators’ decisions are final. The law denies collective bargaining if no single union represents at least 40 percent of the workers in the unit.

Jamaica ratified most International Labor Organization (ILO) Conventions and international labor rights are recognized within domestic law.  Jamaica has ratified all key international conventions concerning child labor and established laws and regulations related to child labor, including in its worst forms.  However, gaps still exist in Jamaica’s legal framework to adequately protect children from child labor. The GOJ is under-resourced for investigations on worker abuse as well as on occupational safety and health checks.

Jamaica’s workplace policy incorporates all of the recommended practices of the ILO code of practice on HIV/AIDS but the legislation to regulate enforcement is not yet ratified.  In conjunction with the ILO and local stakeholders, the GOJ passed legislation guiding flexible working arrangements. Under the Work Permit Act, a foreign national who wishes to work in Jamaica must first apply for a permit issued by the Ministry of Labor and Social Security.  The law, which seeks to give first preference to Jamaicans, requires organizations planning to employ foreign nationals to prove that attempts were made to employ a Jamaican national.

12. OPIC and Other Investment Insurance Programs

The U.S. government’s Overseas Private Investment Corporation (OPIC) targeted infrastructure, telecommunications, construction, tourism, and energy as priority sectors in Jamaica.  OPIC has financed many projects in Jamaica and recently provided financing and political risk insurance for two large renewable energy projects, as well as a grid upgrade project for the monopoly power utility.  Jamaica is a member of the Multilateral Investment Guarantee Agency (MIGA).

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2017 $14,781* 2017 $14,781 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2017 $258.6** 2017 $167 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2017 $2 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data
Total inbound stock of FDI as % host GDP N/A N/A 2017 112% UNCTAD data available at https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx  

Source for Host Country Data: *Statistical Institute of Jamaica
http://statinja.gov.jm/NationalAccounting/Annual/NewAnnualGDP.aspx

**Jamaica Promotions Corporation (JAMPRO)

 

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data (2017)
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward Amount 100% Total Outward Amount 100%
USA 258.60 29 Data unavailable
Mexico 254.80 18
Canada 204.90 29
Spain 156.50 23
Other 13.30 1

Source: Jamaica Promotions Corporation (JAMPRO)


Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Economic and Commercial Section
142 Old Hope Road
Kingston 6, Jamaica
Telephone: +1 876-702-6000
Email: kingstoncommercial@state.gov

2019 Investment Climate Statements: Jamaica
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