—says government has cracked down on fronting, shell companies exploiting Local Content Act

NATURAL RESOURCES MINISTER, Vickram Bharrat, has issued a stern warning to Guyanese seeking to exploit the Local Content framework through unethical arrangements, including selling their citizenship status and fronting for foreign companies.
Speaking at an event on Tuesday, Bharrat recalled that shortly after the Local Content Act came into effect in January 2022, authorities uncovered several schemes involving local partners who were only nominally Guyanese-owned.
“We have had some of the very Guyanese who were advocating for local content selling themselves, or rather their passport, I should say,” he said, describing the practice as unethical and contrary to the spirit of the legislation.
While noting that the government has strengthened its ability to detect and address practices such as “rent-a-citizen” arrangements and fronting, Bharrat urged Guyanese to distance themselves from such activities.
This phenomenon – commonly referred to as ‘fronting’ or ‘rent-a-citizen’ – has the potential to reduce the financial benefits accumulated by Guyanese and runs counter to the spirit and intent of the LCA.
In 2022, the LCA was challenged by the Trinidadian-owned company, Ramps Logistics Guyana over the non-issuance of a local content certificate.
Acting Chief Justice Roxane George, S.C., in her ruling, ordered the Local Content Secretariat (LCS) to issue a local content certificate to the company. The LCS has since complied with the order.
However, the Chief Justice noted that the Local Content Act “clearly needs” regulations to prevent arbitrary decision-making.
“We have gotten a handle on that situation, but I want to make an open call to my fellow Guyanese: value your citizenship, value your passport, value your country. Don’t sell it. Be an active participating member in the oil and gas sector,” he stressed.
The minister revealed that in some instances, Guyanese shareholders were listed on paper as majority owners of companies but received only a small fraction of the profits.
“We have had cases in the past where people were holding five and 10 per cent of a company, but on paper there was 51 per cent,” Bharrat disclosed.
According to him, when the Guyana Revenue Authority (GRA) began examining profit distributions against declared shareholdings, discrepancies quickly emerged.
SHELL COMPANIES AND PAYMENT DELAYS
Bharrat said the government also had to confront the emergence of shell companies established solely to exploit local content requirements.
“A number of shell companies just came in and established themselves… all of this we had to fix in the journey from implementation in January 2022 to date,” he said.
He noted that local businesses had also raised concerns about invoicing systems and lengthy payment periods imposed by tier-one and tier-two contractors.
“We had issues with the tier-one, tier-two contractors and the invoicing system, and the payment periods,” Bharrat said, explaining that lengthy payment cycles are common in some jurisdictions.
He said the administration has since engaged operators to simplify invoicing systems and reduce the time taken to settle payments.
Guyana’s Local Content legislation is designed to promote economic growth and development by ensuring that local businesses and workers benefit from opportunities in the oil and gas sector.
Under the legislation, companies are required to procure specified percentages of goods and services from Guyanese businesses, including 90 per cent of office space rental and accommodation services, 90 per cent of janitorial, laundry and catering services, 95 per cent of pest-control services, 100 per cent of insurance services, 75 per cent of food supply services and 90 per cent of accounting services.
Updated legislation is expected to include additional provisions addressing training and capacity building for local workers, as well as greater participation throughout the supply chain. Amendments are currently awaiting policy-level consideration following extensive stakeholder consultations.
PARTNERSHIPS KEY
Meanwhile, Bharrat reiterated President Irfaan Ali’s call for local businesses to pursue partnerships, joint ventures and consortiums to overcome financing challenges and compete more effectively.
“One of our biggest challenges in the oil and gas sector for the local private sector is the availability of capital. That is why His Excellency has been pushing the local private sector towards partnerships, joint ventures and consortiums, so you can pool resources together,” he said.
The minister urged businesses to focus their competitiveness outward, targeting regional and international opportunities rather than competing against each other domestically.
“We have to put that competitiveness aside and work together and compete regionally and internationally… not compete against each other,” he stressed.
NO SHIELD FOR POOR STANDARDS
Bharrat also made it clear that the Local Content Act was never intended to protect poor-quality services or inflated pricing.
Instead, he said, the legislation was designed to help Guyanese businesses develop the capacity to compete regionally and internationally on quality and cost.
“We want our local private sector to compete regionally and internationally, both in quality and in price. That is what the local content legislation is there for,” he said.
He cautioned that businesses cannot rely on local content requirements while offering substandard accommodation, facilities or services, noting that competitiveness and quality must remain central to the sector’s long-term success.