– US Department of State says in recent repor

GUYANA’S offshore oil development has significantly changed the country’s business climate, and as the government works to invest its oil riches in revolutionary improvements and better services for its citizens, Guyana is swiftly becoming a regional investment destination.

This is according to a recent report issued by the US Department of State, which highlighted that Guyana’s economic growth transcends that of many and with the economy being projected to grow by 37 per cent in 2023, this makes it “one of the fastest growing economies in the world.”

Moreover, the People’s Progressive Party (PPP) government has prioritised a number of goals in order to not only boost the economy but also make it diversified. It should be noted that because of these initiatives and implementations Guyana’s foreign direct investments (FDI) have seen a 47 per cent or $629 million growth in the first six months of 2022 to nearly $2 billion.
The US Department of State report read: “Guyanese law does not discriminate against foreign investors. Foreigners can participate in Guyana’s local stock market…” underscoring that the government prioritises investments in agriculture, agro-processing, light manufacturing, renewable energy, tourism and information and communications technology (ICT).
The report also touched on the Local Content Act (LCA), which was passed in 2021, and is aimed at establishing the minimum standards for foreign and domestic businesses working in the nation’s oil and gas sector to hire Guyanese and acquire local products.
According to the report: “The legislation lists local quotas for 40 business services and material inputs, which must come from Guyanese businesses,” adding that: “The targets range from near total local sourcing (90 to 100 percent) for services like ground transportation of personnel, local accounting and legal services, and pest control services to lower levels (between five to 25 percent) for more technical items like dredging services, engineering and machining, borehole testing, environmental services and studies, and aviation support services.”

It was also said that the PPP government intends to include more products and services on the initial list, as the capacity grows. According to the document, in such a scenario, international companies might be compelled to form partnerships with local companies to comply with the LCA.

The document also disclosed that the right of foreigners to own property in Guyana is protected under the constitution of Guyana. Except for some oil and gas services, which are now legally protected by the LCA, foreign and local businesses are free to start, own, and engage in all forms of commerce.
The Investment Act of 2004 in Guyana guarantees legal protection for investments and stipulates that both domestic and foreign investors are to be treated equally.

According to the report, overseas investors are welcome to invest in Guyana’s stock market.
Furthermore, under the LCA, a company must have at least 51 per cent voting rights, at least 75 per cent of executive and senior management positions, and at least 90 per cent of non-managerial staff positions to be considered Guyanese, which also significantly increased the ownership requirements. These restrictions on foreign ownership and control only apply to the initial schedule of local enterprises included in the 2021 LCA as of April 2023. The initial schedule, however, is probably subject to modification later in 2023.

The report also disclosed that the government aims to draw in FDI and except for certain mining and oil and gas operations, all economic activities are given national treatment.
It was also said that according to business assistance organisations, Guyana offers a welcoming climate for investments.