Aruba Trade and Industry Association

Transcription

1 Aruba Trade and Industry Association Developing an enabling environment for sustainable enterprises by reviewing regulatory barriers that hinder business development.

2 Aruba Area 179m2 / population of / GDP PP US$25,300 / Unemployment rate 5.8% / Inflation 0.8% Independent part of the the Dutch Kingdom with stable local political environment. Tourism based economy (90%) with limited financial, off shore and industrial sectors, mainly oil trans-shipment. The local economy is mainly geared towards services and tourism based activities. SME are core of the local business community.

3 Existing barriers Administrative Regulations on Foreign Trade 8 Tax Regulations 9 Stringent Labor Regulations 10 Cultural Social / Peer Pressure to succeed 6 Financial Financing 9 Educational Adequate and relevant education level 6 Point system based on 10 being highest barrier

4 Regulations on Foreign Trade High legal barriers should be avoided unless their benefits are very clear and outweigh their burden. Aruba enjoys on of the most regulated and strict compliance schemes in the region. In order to establish a new business, there are multiple regulatory agencies to comply to (Ministry of Economic Affairs, Central Bank, Chamber of Commerce). Comprehensive background review of Financing and source of income. Compliance to FATF

5 Tax regulations Tax burden on business is high and is an obstacle for new business development Aruba is one of the highest taxed countries in the region (if not World) Complex and outdated tax structures and schemes High Social Premiums (mostly paid by Employers) General Health Insurance General Pension Plan Accident and Death Insurance

6 Stringent Labor Regulations Employment regulations limit flexibility and lead to less employment and less investment. Non flexible labor laws 2 month trial period then automatically in full time service Limited Part time possibilities Limited Flexibility in working hours

7 Social / Peer Pressure to succeed Small environment does not stimulate competitive and aggressive new business Very competitive and limited market Negative consequences for failure Failure tends to lead to exit from market

8 Financing Access to affordable finance is crucial to achieving business objectives. High Corporate Finance rates 7-9% High Individual Finance rates 6-11% Limited Finance due to small economy and competition

9 Adequate and relevant education level Education needs to be up to date and relevant to current market conditions and local economy High Disconnect between education and business requirements Lack of leadership training in small community Lack of support for new business

10 Latest Developments and Outcomes The key results must be the creation of a more friendly regulatory and administrative framework for business, developing the right attitude and skills though education and training. Development of services oriented to solving the identified problems and barriers are needed as well as implementing new finance models more accessible to business.

11 The role of ATIA. ATIA has been actively lobbying and encouraging the government to make the necessary changes to make Aruba more business friendly and reduce the barriers in order to create a more sustainable environment. ATIA is encouraging government to reduce regulation while maintaining FATF ratings Government with participation of ATIA is introducing new fiscal reforms to reduce and renew taxes Government through initiative of ATIA is reviewing the labor laws in triparty setting Government through ATIA and Bankers Association is looking at new financing initiatives for SME

12 Support from CEC In order to overcome the identified barriers we will need to establish and promote programs to effectively influence the positive outcome for business. We will need to identify and promote role models and success stories. In order to continue and effectively pursue this agenda, ATIA will need continued support from the IEO, the ILO and also regionally from the CEC. Support by means of training, presentations, documentation on how to make reducing barriers and creating a sound and sustainable business environment.