Foreign firms interested in exporting to Guyana typically establish a formal relationship with a local importer such as a franchise agreement, joint venture, or a local representation arrangement. A local content certificate may be required to participate in the oil and gas sector.
Using an Agent or Distributor
Guyana has no specific legislation regulating representatives, distributors, or franchisers. However, the GoG is exploring a regulatory framework for real estate agents. Under the LCA 2021 law, a local partner or service provider is required for certain goods or services. Agreements for appointment of agents are governed by common law principles. A foreign investor is free to negotiate representation, agency, distribution, and franchising agreements with Guyanese nationals. Royalties and commission rates are not regulated and may be freely agreed upon by the parties concerned. The U.S. Embassy recommends firms conduct a thorough due diligence on perspective local agents before entering into an agreement. Additionally, a credit rating agency may be used to determine the financial reputation of a company. U.S. businesses are encouraged to seek a U.S. EXIM export credit insurance when pursuing business opportunities in Guyana. Hiring a lawyer or a consulting firm to screen potential agents may provide useful information and prevent an unproductive partnership.
Long-term distributors/agents sometimes acquire certain claims on distribution rights that go beyond - and in some cases supersede - contract rights under local common law interpretations. In such cases, the foreign product supplier may have to buy back distributor rights from the local agent.
Many U.S. exporters of consumer products find that an agent/distributor arrangement is the most convenient, practical, and cost-effective mechanism for sales in Guyana. Local distributors tend to have superior market knowledge and networks.
Establishing an Office
Registering a business in Guyana typically takes approximately one month. U.S. investors and potential investors are urged to conduct extensive market analysis before entering the market. Companies deciding to register in Guyana are encouraged to contact a local lawyer through the Guyana Bar Association to provide advice on company registration, relevant legal frameworks and navigating the local legal landscape. Additionally, financial companies are governed by the Financial Institutions Act and regulated by the Bank of Guyana. Similarly, mining, gaming and petroleum have unique legislation regarding their industries, which may affect the choice of business registration. GO-INVEST may provide guidance on the relevant laws and requirements to enter any industry along with relevant documentation to access investment concessions. Companies are encouraged to utilize investment banking services or accounting firms when establishing an office to ensure due diligence is complete.
A business may legally register with the Deeds Registry under a sole proprietorship, partnership, or incorporated entity. The Business Names Registration Act governs sole proprietorship, the Partnership Act governs partnerships, and the Companies Act regulates incorporated entities. The cost of registration as a sole proprietor or a partnership is $25 while incorporation is approximately $400 but will likely be higher based on other legal fees. Wait-times for a business registration can be one week.
Special provisions are included within the Companies Act which allows for the registration of “external companies” for the incorporation of firms outside of Guyana. The process for incorporating a company takes approximately one week. Registering a foreign company requires additional steps and documentation.
All firms must register with the GRA to receive a Taxpayer Identification Number (TIN), which is required to conduct business with any government and public entities. A company should register for a Company Tax Identification Number (TIN) at the GRA. Registration for a TIN costs $5. The process differs based on the type of company. For incorporations, documentation required includes a copy of incorporation, identification of directors, completed company TIN application form. Additionally, the company can register for Value Added Tax simultaneously.
All firms must also register with the National Insurance Scheme (NIS) to obtain a unique registration number. The application process can be readily completed at any NIS office. Companies file monthly contributions for their employees. Self-employed individuals file monthly returns on their earnings. The total contribution is calculated at 14 percent of the basic wage/salary paid to the employee and is derived by a 5.6 percent deduction from the employee’s pay and the remaining 8.4 percent paid by the employer on behalf of the employee.
Guyana has six municipalities: Georgetown, Anna Regina, New Amsterdam, Corriverton, Rose Hall, and Linden. Companies are required to pay rates and taxes. Companies can register at the respective municipal office.
Guyana experiences a high incidence of property crime, particularly in Georgetown. U.S. businesses planning to establish a presence in Guyana should plan for adequate investments in physical security at all business and residential facilities.
Guyana does not have reliable electricity and firms are encouraged to invest in back-up power or to make provisions for such eventualities. Many local firms install their own power generation capacity instead of relying on the grid.
For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Franchising
To establish a franchise arrangement in Guyana, the franchisee is expected to register a local company to assume the rights to operate the franchise. There are no specific laws that regulate the operation of franchises and there is a normal business relationship with the locally registered entity and the headquarters of the franchise. The locally registered company is responsible for managing the operation and ensuring conformity to the franchise requirements.
Local and international franchises are growing in Guyana. Royalty payments related to a franchise agreement are payable to a non-resident franchiser and subject to varying withholding tax rates depending on the country of residence of the franchiser and the applicable double taxation treaty. Guyana has double taxation treaties with Canada and CARICOM member countries.
Successful franchises include Bruster’s Ice Cream, Burger King, Church’s Chicken, Cinnabon, Dairy Queen, Hard Rock Café, KFC, Pizza Hut, Pollo Tropical, Popeye’s Chicken, Starbucks, and Stephen Covey. MoneyGram and Western Union operate numerous branches facilitating remittances from Guyanese living or working abroad. The high degree of brand recognition makes the successful introduction of U.S. products and services to Guyana, through franchising, a good opportunity. Potential franchise investors are encouraged to audit the supply chains locally for quality standards.
Direct Marketing
Direct marketing is utilized by many local entities. Telecommunication companies distribute text messages to subscribers advertising promotions and services that they offer as well as on behalf of other companies. Over the past few years, a variety of businesses, including commercial banks and furniture and appliance stores, have engaged in direct marketing strategies.
Companies continue to advertise their products and services in Guyana through radio, television, and newspapers. Direct marketing has grown increasingly popular with the rise of social media as a tool for businesses to communicate directly with customers.
Joint Ventures/Licensing
Foreign investors must establish joint ventures with Guyanese nationals to obtain licenses for small and medium-scale gold and diamond mines. Except for the oil and gas sector, most other business operations only require registration and incorporation, but no local ownership. Within the oil and gas sector, only the first schedule of 40 service lines requires local ownership. Because the LCA recently came online in April 2022, the full effects of its provisions have yet to be seen, however, the law is expected to encourage significantly more joint ventures and partnerships.
Express Delivery
Guyana facilitates express cargo services from FedEx, UPS, and DHL. Guyana is approximately five hours away from Miami and six hours from New York City by air, though flights can often be delayed or redirected due to weather. True overnight service is rarely achievable.
Due Diligence
Investors seeking to start a business, buy or sell property, or invest in a business operating in Guyana should seek the services of a reputable lawyer and certified accountant with knowledge of the Guyanese market and government to assist with filings, registrations, licenses, and legal paperwork. Additionally, understanding the market and having a feasibility study completed may be advantageous. Guyana offers consulting companies, investment banking, and accountants which can assist the due-diligence process on a business.
Before entering into any agreement with a local business partner, U.S. companies should conduct thorough background checks and research the financial, legal, and physical condition of assets or properties under consideration. Many local businesses are incorporated and are not required to publish financials publicly. Lawyers may assist in conducting a background check in understanding the local business partner’s reputation, finance, and experience. Additionally, requesting potential local business partner credit info may provide some insight into the potential partner’s creditworthiness.
The U.S. Embassy in Georgetown received complaints from U.S. investors and businesses that expressed difficulties with collecting payments from local customers. Prospective investors should thoroughly investigate all local partners.
The U.S. Commercial Service in Georgetown provides U.S. firms with information that can assist them in vetting a specific Guyanese company to help determine its suitability as a potential business partner. We can investigate the capabilities, legitimacy, and financial strength of a Guyanese company and provide useful information gleaned from government, industry and financial contacts, local press, and other sources. In addition, through its International Company Profile (ICP) service, the U.S. Commercial Service in Guyana will provide a background report based on site visits and interviews with key personnel of Guyanese firms with whom U.S. firms wish to begin or maintain a business relationship. Our assistance provides valuable information in your company’s due diligence process to help assist you in finding a legitimate partner. Please contact your nearest Commercial Service office for additional information.
Business Support Organizations (BSOs) are a source of general information. BSOs may also provide registered company owners and relevant business resources. The major BSOs are the American Chamber of Commerce in Guyana (AmCham), Georgetown Chamber of Commerce and Industry (GCCI), the Private Sector Commission (PSC), the Guyana Manufacturers and Services Association (GMSA), the Women’s Chambers of Commerce and Industry Guyana, and the Black Entrepreneurs Association.