Guyana Info
Joined: 23 Nov 2006
Posts: 15
Home Country: guyana
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 Posted: Mon Nov 27, 2006 8:09 am Post subject: DOING BUSINESS IN GUYANA / GUYANA BUSINESS GUIDE |
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DOING BUSINESS IN GUYANA
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form:
Minimum Capital Requirement: 0
City: Georgetown
Registration Requirements:
Procedure 1. Search for company name and reserve proposed name
Time to complete: 1-14 days
Cost to complete: GYD 175 (filling fees)
Procedure 2. Obtain declaration of compliance
Time to complete: 1 day
Cost to complete: GYD 1500
Comment: The only document required to be filed to incorporate a company that requires other than a simple signature is the declaration of compliance to be made by a professional (lawyer or accountant). While it is not required to hire a lawyer, it is common. The declaration of compliance, however, must be prepared by a lawyer.
The declaration states that to best of the declarant's knowledge and belief, no signatory to the Articles of Incorporation of the company is a person described in Section 4(2) of the Companies Act 1991 (which states that persons under 18, of unsound mind or undischarged bankruptcies cannot form or join in the formation of a company) and that all the requirements of the said Act 1991 and all the requirements of the said Act in respect of the matters precedent to the registration of the said company and incidental thereto have been complied with. Section 4(3) states that if such a declaration is filed it shall be conclusive of the facts stated in it.
Procedure 3. Register company with Registrar of Companies
Time to complete: 14-21 days
Cost to complete: GYD 160000
Comment: The Registrar is required to publish a notice of the issue of the certificate of incorporation in the Official Gazette. Companies Act (29)
Cost is calculated as follows: Registrar's fee on stated capital of G$1.8m 6% = $108,000; Duty under Tax Act ½% on stated capital $9,000; fee for certificate of incorporation $30,000; fees for filing and certified copies of notice of secretary, director, registered office & compliance $13,000.
The company has to provide the following documents:
- Declaration of compliance
- Articles of incorporation
- Notice and consents of directors
- Notice and consents of secretary
- Notice of registered office
Procedure 4. File for tax identification number (PIN) with the Revenue Authority
Time to complete: 7 days
Cost to complete: GYD 10000
Comment: An application letter has to be prepared to the Revenue Authority including the name of the company, date of registration, registration number and date of commencement of operation
Procedure 5*. Register for PAYE
Time to complete: 7 days (simultaneous with procedure 4)
Cost to complete: no charge
Comment: PIN and PAYE registration are both undertaken in the Guyana Revenue Authority Building, but in separate offices
Procedure 6*. Register for consumption tax
Time to complete: 7 days (simultaneous with procedure 5)
Cost to complete: no charge
Comment: Consumption tax registration takes place in the customs and trade administration office.
Procedure 7. Register employees for social security
Time to complete: 7 days
Cost to complete: GYD 10000
Comment: with social security office (NIS)
Procedure 8. Make a seal
Time to complete: 1-2 days
Cost to complete: GYD 2000
Comment: The cost depends on whether an embossed or rubber seal is obtained. Embossed seals are not made in Guyana and would require some time. The majority of companies use a rubber stamp.
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).
TAXATION
Corporate Income Tax
Resident companies are subject to tax on their worldwide income. A company is considered resident in Guyana if its control and management are exercised in Guyana. Non-resident companies carrying on a trade or business in Guyana are subject to tax on income derived from Guyana, regardless of where the income is received.
Rates of Corporate Tax
The rate of tax for commercial companies is 45%; for non-commercial companies, the rate is 35%. In general, a company is classified as a commercial company if it derives at least 75% of its gross income from trading in goods not manufactured by it or if it is engaged in telecommunication, banking or insurance other than long term insurance.
No special tax rates apply to particular industries.
The minimum tax is 2% of turnover
It applies only to commercial companies other than insurance companies. Payments of minimum tax may be carried forward to offset corporate income tax payable in future years, but they may not reduce tax payable in any year to less than 2% of turnover.
Capital Gains
Capital Gains tax at a rate of 20% is imposed on the net chargeable gains derived from the disposal of capital assets. Gains derived from the disposal of capital assets within 12 months of their acquisition date are treated as ordinary income and are subject to corporate income tax at the normal 35% or 45% rates. Gains derived from the disposal of assets held for more than 25 years are exempt from tax.
Capital losses may be carried forward to offset capital gains for a period of 24 years.
Administration
The tax year is the calendar year. Tax is assessed during a tax year on income earned in the year of income, which is generally the calendar year preceding the tax year. The Commissioner of Inland Revenue may allow companies with an accounting year other than the calendar year to adopt their accounting year as their income year. For these companies, tax is assessed in a tax year on income earned in the income year ending in the previous tax year.
Advance tax payments are due on March 15, June 15, September 15, December 15, of the calendar year prior to the tax year. Advance payments are normally based on the preceding year’s tax liability. However, the Commissioner may require the company to calculate the payments based on estimated income for the current year.
Tax returns must be filed, and balance of tax due paid, by April 30 of the tax year.
Dividends
Dividends paid by resident companies to other resident companies and to resident individuals are exempt from tax.
A final withholding tax of 20% is imposed on dividends paid to non-resident companies and individuals.
Resident companies and individuals must include dividends received from non-resident companies in taxable income.
Foreign Tax Relief
Foreign tax relief is available under double tax treaties with Canada and the United Kingdom.
Guyana may grant unilateral relief for foreign taxes paid in countries with tax systems and legislation similar to those in Guyana. For British Commonwealth countries, the relief is 50% of the relief that would be available if the foreign country were a treaty country.
For other countries, the relief is 25% of such available relief. The available relief is the lower of the tax rate in Guyana and the tax rate in the other country.
Determination of Taxable Income
Taxable income is the income reported in the company’s financial statements, prepared in accordance with generally accepted accounting principles and subject to certain adjustments. Profits derived on the disposal of capital assets are not included in taxable income.
Income derived from the export of specified products to countries that are not members of the Caribbean Community and Common Market (CARICOM) is subject to an export allowance.
Expenses incurred wholly and exclusively in the production of income are deductible. Deductions for administrative, technical, professional or other managerial services fees paid to a non-resident company or branch may not exceed 1% of annual turnover. Charitable donations are not deductible unless they are made under a deed of covenant.
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is generally determined using the average cost method for accounting and tax purposes, but the first-in, first out (FIFO) method is also acceptable.
Provisions
Provisions are deductible only if they relate to specific or know liabilities or to doubtful debts.
Initial Allowance
Initial allowances are available for industrial buildings and structures at a rate of 10% and for plant and machinery, including mechanical equipment, at a rate of 40% The initial allowances are granted in the year of purchase and reduce the depreciable value of assets.
Annual (Wear and Tear) Allowed
Buildings that house machinery are depreciated at a rate of 5%, using the straight line method. Other assets may be depreciated using the declining balance or straight line methods. The following are the depreciation rates, which apply under both methods.
Export Allowance
Companies may deduct an export allowance if they export non-traditional products to non-CARICOM countries. Non-traditional products include vegetables, furniture, fish and plants. Products that do not qualify for the allowance include bauxite, diamonds, gold, lumber, prawns, rice, rum and sugar.
The export allowance is computed by applying a specified percentage to export profits. The following are the deductible percentages of export profits.
For the purpose of the export allowance, export sales and export profits include only those sales and profits derived from exports of products qualifying for the export allowance.
Relief for Losses
Companies may carry forward losses for an unlimited number of years, but the losses may not reduce the taxable income in any year by more than 50% or the tax payable to less than 2% of turnover. Loss carry-backs are taxed separately.
Groups of Companies
There are no provisions in the law relating to group taxation. All companies are taxed separately. |
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