Todd’s Corporate Services Inc. is pleased to present this essential report, designed to equip sophisticated investors with a precise understanding of the robust and highly advantageous investment framework in the Co-operative Republic of Guyana. The nation’s strategic fiscal and legislative architecture is explicitly engineered to attract and secure both domestic and foreign direct investment (FDI), offering a compelling platform for accelerated capital growth and market penetration.
This report, backed by the legal provisions outlined in the Income Tax Act, the Corporation Tax Act, and the Investment Act, and championed by the Guyana Office for Investment (GO-Invest), confirms that the Guyana is committed to a policy of economic diversification and investor protection. GO-Invest acts as the nation’s premier Investment Promotion Agency, serving as a critical single-window facilitator for all investment processes and the formal gateway to accessing these pivotal incentives.
General Incentives
Guyana’s general investment incentives are foundational, designed to immediately enhance the financial viability and long-term sustainability of enterprises operating within the jurisdiction.
- Perpetual Loss Carry-Over for Tax Purposes
A significant de-risking provision, the unlimited carry-over of tax losses from previous years (excluding the financial sector), is confirmed under the Corporation Tax Act. This is a crucial element of sound fiscal planning, providing a financial safety net that allows for longer payback periods on substantial capital investments. It guarantees that a company’s full tax liability is only realised once it achieves sustained profitability, thereby supporting sustained growth and expansion. Note that for standard “Commercial Companies,” the annual set-off is generally limited to 50% of chargeable profits in any given year, ensuring a baseline tax payment, while the carry-forward period remains unlimited.
- Accelerated Depreciation: Optimizing Capital Expenditure
The provision for accelerated depreciation on machinery and equipment for tax purposes is confirmed. This typically involves an enhanced “Initial Allowance” on the cost of plant and machinery in the first year of acquisition, in addition to the standard wear-and-tear allowance, as per the tax laws. By allowing companies to expense a greater portion of their fixed asset cost sooner, this immediate tax shield is vital for high-capital expenditure projects, enabling faster recovery of capital and encouraging continuous re-investment in modern, efficient equipment.
- Strategic Tax Treaties: Mitigating International Double Taxation
Guyana has secured Double Taxation Treaties (DTTs) with key global economies. The claim of treaties with the UK, Canada, Kuwait, and CARICOM is confirmed. These treaties are indispensable for international investors as they eliminate or significantly reduce the chance of income being taxed in both Guyana and the investor’s home country, enhancing the transparency and predictability of after-tax returns.
Sector-Specific Incentives
The most compelling benefits are available through an Investment Agreement (IA), a legally binding contract negotiated and formalised between the investor and the Government of Guyana, typically facilitated by GO-Invest. These incentives are strategically targeted to reduce upfront project costs in priority sectors.
- Duty and Tax Waivers on Key Imports
An Investment Agreement, facilitated by GO-Invest, can unlock the waiver of Customs Duty, Excise Tax, and Value Added Tax (VAT) on a range of imports directly relevant to the approved project. This drastically reduces the initial capital outlay. The specific exemptions cited covering a wide range of processing machinery and equipment (including packaging and auxiliary plant equipment), furnishings (for approved hotel/tourism facilities), and building materials for large-scale projects are confirmed aspects of the incentives regime, particularly for projects in sectors like Manufacturing, Tourism, and Energy, as per various ministerial orders and the framework overseen by GO-Invest.
Special Incentives That Reward Pioneering Investment
For investors willing to undertake Groundbreaking Investments, projects that are developmental, risk-bearing, and instrumental to the nation’s economic diversification, the government offers the ultimate incentive: the Tax Holiday.
The Corporation Tax Holiday
This provision is definitively established under the Income Tax (In Aid of Industry) Act, which grants the Minister the authority to offer corporation tax exemptions for income derived from new economic activities deemed developmental and risk-bearing.
- Exemption Duration and Scope:
- The standard exemption period is Up to 5 years, which is extendable to 10 years for specific, high-impact activities listed in the Act. In the case of infrastructural development using renewable energy, the exemption may extend beyond 10 years.
- Crucial Caveat: While a company is on a Tax Holiday, no allowances for wear and tear (depreciation) are permitted to be claimed. However, any loss incurred during the holiday period may be set off, without limitation, against income immediately following the expiration of the tax holiday.
- Eligible Regions: The specified regions are correct and are explicitly listed in the legislation to promote development in remote and hinterland areas: Region 1 (Barima/Waini), Region 7 (Cuyuni/Mazaruni), Region 8 (Potaro/Siparuni), Region 9 (Upper Takatu/Upper Essequibo), and Region 10 (Upper Demerara/Upper Berbice).
- Eligible Fields: The stated fields are confirmed by the legislation and government policy, targeting areas of national priority: Agricultural development and agro-processing, ICT (excluding retail and distribution), Petroleum and mineral exploration/refining, Tourist facilities, Value-added wood processing, Textile production, Bio-technology, New pharmaceuticals/chemical compounds, and Infrastructure development (including renewable energy and cold storage solutions).
Assurances for Capital Mobility and Protection
The structural integrity of Guyana’s investment climate is underpinned by robust legal guarantees for capital mobility and investment protection, as codified in the Investment Act (2004).
- Freedom to Transfer Funds Abroad: Capital Repatriation Guarantee
The Investment Act explicitly guarantees the right of investors to freely and without hindrance repatriate dividends, earnings, and capital; remit the proceeds of sale or liquidation of an investment; and make payment of interest on international loans. This is subject only to the payment of applicable taxes and specific, non-discriminatory limitations (such as court orders, bankruptcy, or criminal proceedings).
- Investment Protection: Sovereign Guarantee
The Investment Act provides a clear legal guarantee against compulsory acquisition or expropriation, except for a purpose in accordance with Guyanese law, on a non-discriminatory basis, and with prompt payment of adequate compensation together with interest. This legal provision is in line with international best practices and signals strong respect for property rights.
Your Strategic Partner
As confirmed, the extensive incentives in Guyana are highly regulated and require formal agreement with the government, often via GO-Invest. Navigating the legal frameworks (The Investment Act, The Income Tax Act, and various Ministerial Orders) to secure an optimal Investment Agreement (IA) is a complex process.
Todd’s Corporate Services Inc. specializes in translating this legislative complexity into tangible investor benefits. We are the strategic partner you need to:
- Validate Eligibility: Precisely determine your project’s qualification for Tax Holidays, Duty Waivers, and other concessions.
- Facilitate the IA Process: Seamlessly manage negotiations and application submissions with GO-Invest and relevant agencies.
- Optimize Fiscal Structure: Ensure full legal compliance while maximizing the benefit of loss carry-forwards and accelerated depreciation.
Engage Todd’s Corporate Services Inc. to streamline your market entry and secure the full, legally guaranteed advantage of the Guyanese investment regime.
