REEF Committee Consultation Paper No. 1
Below you’ll find our committee’s consultation paper that includes proposals for the progression of Freeport. After reviewing, please click here to fill out this survey to give us your feedback on the objectives and ideas presented.
Under the Hawksbill Creek Agreement (HCA) in the 1950s, Freeport became one of the first ‘free zones’ in the modern world. Over the past decades, the city’s regulatory framework and the incentives offered to investors have fallen behind those offered by rival free zones, regionally and elsewhere in the world.
Hurricane Dorian, the worst of a succession of devastating storms to pummel Freeport in recent years, highlighted how vulnerable the city is to storm surges and rises in sea level induced by climate change. If Freeport is to prosper, then it needs to be made safe from storm surges.
Covid-19 has decimated the Bahamian tourism industry, creating dire economic distress for the country as a whole and for many individual Bahamians. Even as the pandemic recedes, it seems highly likely that the tourism industry will be very different in the future. If Freeport is to prosper, its economy needs to be diversified by encouraging significant growth in a range of other sectors, as well as tourism.
Freeport has become a difficult place to do business, especially for foreign investors and workers. The roles of the GBPA under the HCA and Government have become blurred and confusing. Investors face complex and sometimes subjective processes when trying to establish and sustain operations in Freeport. If Freeport is to prosper, these need to be clarified and radically streamlined, in order to successfully compete with rival free zones seeking to attract the same investors that we are.
The Covid-19 crisis, on top of Hurricane Dorian’s aftermath, make it crucial that Freeport’s challenges be addressed and definitively resolved, now. The city’s economy is in a dire state, along with the circumstances of its residents.
The REEF Committee is an initiative created by the GBPA to engage with its licensees and the wider Freeport community to create an action plan (not just an ‘aspirational report’) to fundamentally transform the city.
Albert Einstein is reputed to have said that insanity can be defined as doing the same things over and over again and expecting different results. Many of the solutions that the REEF Committee have proposed will require a radically different approach in Freeport. The GBPA is committed to Freeport’s economic growth, resilience to future shocks and the prosperity of its residents, and is keen to explore all options, in collaboration with Government and the people of Freeport, to achieve those ends.
This deck outlines the key issues and possible solutions that have been identified by the REEF Committee. Your input is sought on these. Which of the proposed solutions do you think would be most transformational to Freeport’s economy and its people? To make it possible to implement the proposed solutions, how does the relationship between the GBPA and Government need to be improved? What incentives need to be offered to investors, to make Freeport more attractive than rival cities and centres that seek to attract them? What needs to be done to ensure that Bahamians benefit as much as possible from the growth that would result?
What options exist to fund measures to safeguard the city from storm surges AND diversify the economy AND optimise the benefits of growth for Bahamians?
The REEF Committee’s strategic intent
The REEF Committee is an initiative of the Grand Bahama Port Authority, in partnership with leaders of some of Freeport’s leading businesses.
It is intended to supplement and be collaborative with the Government of The Bahamas and to supplement its Economic Recovery Committee (ERC) initiative.
The committee’s strategic intent is twofold:
(1) To develop a long-term action plan that will fundamentally transform Freeport’s economy, diversifying the economy away from over-dependence on tourism and safeguarding the City and its people against future storm surges and sea level rise.
(2) To identify short-terms actions that can be taken immediately, to relieve distress and set the City on the road to recovery following the devastation caused by Hurricane Dorian and the Covid-19 pandemic.
The REEF Committee’s objective is to make a profound, sustainable, positive difference to Freeport.
The intent of this report is to brief the people of Freeport on the process and to seek input on the initial proposals that have been generated by the committee.
The 10-step process
- The process that the REEF Committee is following has been designed to identify projects that are technically and financially feasible, in the best interests of the people of Freeport, and that when implemented will contribute significantly to the sustainable prosperity of Freeport’s economy and its people.
- To deliver transformational results requires bold and courageous thinking, but without being unrealistic.
- The desired outcome of the process is successfully implemented, economically transformational projects!
Key Solutions Proposed
Ease of doing business subcommittee
Key issues identified
- Uncertainty and lack of security that all current and future GBPA licensees face with respect to the extension of the tax concessions, namely property taxes and business license fees. Processes for establishing and operating businesses in Freeport are opaque, confusing and approvals can take a long time to be decided.
- Unnecessary duplication exists between GBPA and Government processes.
- Bureaucratic decisions are sometimes arbitrary and/or subjective, reducing the level of certainty for business owners and investors.
Key solutions proposed (short-term)
- Negotiate agreement that the GBPA approve specified low-risk business licenses without needing to refer these to the Bahamas Investment Authority (BIA).
- GBPA to assess/approve right for expatriate permanent residents to work in businesses 100% owned by them.
- Expatriate investors to have access to the virtual business portal being developed by the GBPA for Bahamian investors. BIA to use this mechanism to apply their notation within an agreed timeframe upon which investors can rely.
- Clarify when or not a Heads of Agreement (HOA) is required for a foreign business transaction.
- Include GBPA licensees as a sector of businesses in the Commercial Enterprise Act that qualify for efficient immigration practices.
- Cease the cost of living index increase in business license fees until there is a turnaround in the economy and cap at 75% above the original license fee amount upon issuance.
- Applications for restaurants, liquor stores, bars, nightclubs and related businesses to be processed through the GBPA virtual business portal, including Government approvals.
- GBPA to amend procedures to allow businesses that do not require physical office space to obtain a business license without requiring that they rent approved premises.
- Annual residency permit application process to be automated through an online portal that allows processing within 48 hours (and eliminates bureaucratic subjectivity/uncertainty).
- ‘Know your client’ (KYC) certification process to be streamlined to single submission.
- Negotiate with banks to develop a clear, streamlined process for approving local bank accounts (link to KYC process above).
Key solutions proposed (medium/long term)
- Enhance banking solutions for international investors and businesses and expatriate workers. Encourage challenger banks to establish in Freeport.
- Digitalise all administrative and governance processes in Freeport to the maximum extent reasonably possible. Agree with banks to link to their KYC requirements?
What we need from you
Please let us have your feedback
- We need you to lend your voice, thoughts and ideas to help shape the future of Freeport and chart a bold new way forward for our city.
- Please complete the survey and/or email other written input that you have to email@example.com.
- Everyone with an interest in Freeport and its people are welcome to participate.
- Every idea, comment, and feedback is valuable and will be considered.
- We do not expect everyone to agree.
- We expect new and different points of view to be shared.
Help us fine-tune Freeport to fit your needs.
To make Freeport
- a prosperous, pleasant place to live and work, for all the city’s residents
- safe from storm surges and sea-level rise
- less dependent on tourism (without neglecting tourism):
- What solutions / actions proposed by the REEF Committee would have the most positive impact?
- Which solutions / actions do you believe should be prioritised?
- What would need to happen or change, to make them possible?
- What should NOT change in Freeport, as it grows?
- What changes would you support to laws, regulations and policies (including immigration) to achieve the above three goals?
- What solutions would have a significant positive impact, that we have missed?