Residency, taxpayer could be new conditions for Local Content Certification; greater space for small businesses

Last Updated on Wednesday, 9 April 2025, 22:11 by Writer

Guyana’s Local Content Act could be amended to make it mandatory for shareholders of companies desirous of obtaining Local Content Certificates to be resident here and have been paying taxes, an official announced Tuesday.

Legal Officer at the Ministry of Natural Resources’ Local Content Secretariat, Michael Munroe told the one-day Local Content Summit of concerns about ‘rent-a-citizen’ to satisfy the 51 percent beneficial ownership of companies by Guyanese as well as there being different percentages about the management structure.

“We are looking closely at this definition and we are looking at ways in which we can add more conditionalities as to who is a Guyanese company and I say this to say, we are exploring, for example, if residency should be an option…should the Guyanese be a participating taxpayer,” he said. Mr Munroe said the aim is to ensure that the true intent of the legislation is achieved rather that Guyanese just “lending” their Guyanese passports or nationality on paper to appear that they own a company though in reality the owner is the minority shareholder.

He warned erring companies that the authorities were aware that they were bypassing the intent of the Local Content Act by renting Guyanese citizens. “These persons engaged in the act of fronting; we are aware of the different means in which you look to leverage Guyanese nationality,” he said, adding that “we are looking to ensure that loophole is closed”.

Mr Munroe said during the application for renewal of Local Content certificates, the Secretariat would ask for evidence that the 51 percent Guyanese beneficial owner actually benefited from the prosperity. “We would be more rigorous in the renewal stage to ensure that the actual benefits of being a Guyanese are met to the Guyanese citizen,” he said.

The Legal Officer said the Secretariat was exploring ways of leveraging the bid guidelines by converting them into regulations in the coming months to ensure there is more legal force. He said the overall aim was to ensure both local and foreign companies are treated fairly. “Although we want to advance the interest of Guyanese and Guyanese companies, a critical stakeholder in this equation is the international companies. They require some level of consistency, they require some level of certainty and some level of predictability in how we apply the Act so we’re mindful of all these variables,” he added.

Head of the Local Content Secretariat, Dr Martin Pertab also said special provision would be made for small- and medium-sized companies to get a share of opportunities by “unbundling or carving out” a second tier of suppliers for certain services. “Something must be done and that is why we are working with these companies to ensure that everyone gets an opportunity to provide services, gets an opportunity to be part of the value chain and gets an opportunity for them to grow,” he said.

Dr Pertab said attention would be paid to providing incentives to companies to address constraints such as high energy costs. He said the intended 50 percent cut in energy costs with the coming on stream of the natural gas-fired 300 megawatt power plant has already stimulated interest by a number of companies. The Head of the Local Content Secretariat projected an additional 30-to-35 percent increase in opportunities if Guyana could serve the Suriname oil sector where TotalEnergies is developing a huge offshore oil field for production by 2027. “Our job is to ensure that we do the analysis, we provide the assessment and advise the policymakers on some of these opportunities,” he said.

He also announced that local companies would be given one month to respond to Request for Information, adding that a list of all upcoming opportunities would be provided annually to allow them sufficient to time to get ready for participation.