The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Deficiencies ranging from energy costs to 'business ease' and data protection must be remedied if a Cabinet Minister is to achieve his dream of attracting 500 'high tech' firms to the Bahamas.

The Grand Bahama Technology Hub Steering Committee, in a confidential report to the Government, identified 19 different areas requiring improvement if the Minnis administration is to truly realise its vision for the island.

The lengthy 'to do' list was effectively acknowledged by Kwasi Thompson, minister of state for Grand Bahama, when he told the Senate in his contribution to the mid-year Budget debate that he was "under no illusion" about the scale of the reforms required from the Government and the private sector.

"I am under no illusions," he said. "This is a major undertaking that is likely to take years, and we are only at the very beginning and have not yet scratched the surface of what needs to be done to truly make a significant difference."

He pointed to "positive signs" from last year's GB Technology Summit, which had spurred two companies - one involved in cyber security, the other in bio technology - to apply for approvals to establish operations in Grand Bahama.

Yet this remains a long way from the Minister's "goal", stated in his mid-year Budget speech, of attracting "500 blockchain, crypto currency and Fintech companies to Grand Bahama".

The committee's report, which was presented to Mr Thompson in late January 2018, called for a focus on multiple areas that "have an impact or influence on how robust a framework can be built to support a knowledge-based technology economy in the Bahamas".

The cost and reliability of energy supply, in particular, was identified as a key impediment to the creation of a sustainable technology sector. "There needs to be an effort to reduce the cost of electric power in the Port Area and GB as a whole," the committee warned.

"The Government and the GBPA (Grand Bahama Port Authority) need to look at all possible options that can be used to reduce the cost of power." These options included allowing companies to generate their own power, increased renewable generation and ending the Grand Bahama Power Company's monopoly.

'Ease of doing business' concerns also figured highly in the committee's report, which has been obtained by Tribune Business. It called for the creation of a "one-stop shop" for business registration, licensing and processing that was linked to all other government regulatory agencies.

The committee also recommended the establishment of a Grand Bahama Investment Authority, which could approve investments up to a maximum of $3 million and work with the Government and GBPA to help technology firms establish on the island.

"The Government must consider issuing a Due Diligence Certificate (DDC) for beneficial owners of a registered company after they have passed the necessary automated background checks," the report added.

"The business owner should be able to use this DDC as proof of a clean background check, and should be able to open a bank account for the business without the need for extraordinary documentation requirements.

"A conversation must take place with the commercial banking community to get their feedback on this proposed process as a means to speed up the process of opening a business bank account in The Bahamas."

The committee also called for "greater transparency" in the GBPA's licensing process, with "clearly established timelines", and called for approvals to be issued in a 14-day timeframe that matched the Commercial Enterprises Act.

"There should be no issue or delay in approving businesses that meet all requirements; the free market will determine if the business will succeed or not," the report added. "The Government should have an appeals process for businesses that do not receive approval from the GBPA.

"The GBPA should look into separating the licensing and regulatory processes in order to streamline the process of issuance of licenses. The GBPA can maintain the right to suspend or revoke licenses in the event that there is a breach of regulatory responsibilities."

Both Mr Thompson and, indeed, Prime Minister Dr Hubert Minnis appear to be following the committee's report - and its recommendations - almost 'to the letter' based on their recent pronouncements.

Dr Minnis, in concluding the mid-year Budget debate in the House of Assembly, revealed that the Government was mulling whether to introduce a Headquarters Encouragement Act as a piece of incentive legislation designed to encourage companies to domicile their head offices in the Bahamas.

This idea, though, appears to have been lifted directly from the GB technology hub committee's report, as it calls for positioning the Bahamas as "an ideal location for international corporate headquarters".

It then names the exact same Act, and adds: "The CHEA (Companies Headquarters Encouragement Act) should appeal to small companies as well as multi-national companies. Small companies represent a strong growth opportunity for the Bahamas."

Mr Thompson, for his part, referred to both the committee's suggestion that the Bahamas offer something similar to the US's H1B visa to attract technology companies and their foreign staff, and its call to stage a venture capital conference focused on financing tech start-ups.

Indicating the Government is moving on the latter, Mr Thompson told the Senate: "We also intend to facilitate a venture conference to establish the Bahamas as a global player in introducing venture investors to 'seed stage', and 'early stage', companies that are focused on Blockchain, Crypto currency and FinTech solutions.

"This venture conference is designed to drive activity to Grand Bahama by attracting investors, entrepreneurs and service providers from all over the world who are focused on making investments, and building business relationships, with Blockchain technology companies.

"Additionally, this venture conference is designed to provide the Bahamas with the opportunity to present itself to the world as a jurisdiction that has established policies that are favourable to Blockchain, crypto currency, ICOs (initial coin offerings), and FinTech companies that incorporate and are domiciled in the Bahamas," the Minister continued.

"There is also an opportunity to present Freeport, Grand Bahama, as the ideal location to establish offices and global headquarters for these new technology companies. Our goal is to attract 500 blockchain, crypto currency and FinTech companies to Grand Bahama."