Jamaica is very open to foreign direct investment. The government is on a mission to boost economic growth, and they have reformed the economy to encourage overseas business interest. Learn more about Company Formation in Jamaica.
In 2022, Jamaica’s economy had a solid 5.2 percent growth, showing a fast recovery from the COVID-19. The Caribbean nation has double taxation treaties with the USA, Canada, China, Denmark, Germany, the UK, and other leading countries.
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For foreign investors to make the most of this attractive market, they must understand the steps to company formation in Jamaica.
This article will outline the process of company formation in Jamaica and offer significant tips to help streamline this venture for investors.
See also: Corporate Bank Account in Guyana
Starting a Business in Jamaica: Types of Companies
Jamaica offers a vibrant and diverse business landscape, making it an attractive destination for entrepreneurs. When considering starting a business in Jamaica, understanding the types of companies available is crucial. Two common structures are the Limited Liability Company (LLC) and Registered Business/Sole Proprietorship.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a popular choice for businesses in Jamaica. It provides a flexible structure that combines elements of both partnerships and corporations. The key advantage of an LLC is that it limits the personal liability of its members, protecting their personal assets from business debts. This structure is suitable for small to medium-sized enterprises looking for a balance between liability protection and operational flexibility.
Registered Business/Sole Proprietorship
On the other hand, a Registered Business or Sole Proprietorship is a simpler form of business ownership. In this structure, a single individual operates the business without the need for a separate legal entity. While it offers simplicity and ease of operation, the owner assumes full personal liability for the business’s debts and obligations. This structure is ideal for solo entrepreneurs or small businesses with straightforward operations.
Can a foreigner start a business in Jamaica?
To operate in Jamaica, foreign companies are required to complete registration with the Companies Office of Jamaica, incurring a registration fee of $25,000 (USD 150.) Despite minimal restrictions on foreign ownership, any alterations to registration documents necessitate submission to the Companies Office. Moreover, in compliance with the Companies Act of 2004, foreign companies are obligated to file a Profit and Loss account and a Balance Sheet.
People who are not residents of Jamaica must seek approval from the Ministry of Labour before participating in any profitable activity or seeking employment in the country.
What Are the Minimum Requirements to Incorporate an LLC or Registered Business/Sole Proprietorship in Jamaica?
Before diving into the entrepreneurial journey in Jamaica, it is crucial to understand the minimum requirements for incorporating an LLC or Registered Business/Sole Proprietorship.
Here is what you need to register a private company in Jamaica.
Under the provisions of the Companies Act 2004, an individual has the authority to register a private company. It is permissible for the registrant to function as the sole director and shareholder; however, they are ineligible to concurrently serve as the company secretary.
When completing Form 1A, the designated Articles of Incorporation for private and public companies, certain crucial information must be specified:
LLC Company Requirements
- Company Name: Choose a unique and acceptable name for the LLC.
- Registered Office: Establish a registered office address within Jamaica.
- Shareholders: Have at least one shareholder, with the option to have multiple shareholders.
- Articles of Incorporation: Prepare and file the articles of incorporation with the Companies Office of Jamaica.
Registered Business/Sole Proprietorship Requirements
- Business Name: Select a unique business name that complies with registration regulations.
- Owner Information: Provide personal details of the sole proprietor, including name and address.
- Business Address: Specify the location of the business.
- Business Activity: Clearly outline the nature of the business activity
The registration process for public companies aligns with that of private companies, involving the submission of both the Business Registration Form and Form 1A, as previously mentioned. However, there are notable exceptions:
- The value of the allotted shares must be explicitly stated and should not fall below $500,000.
- The company must have a minimum of three directors. At least two of the directors must not hold employment status with the company or any affiliated entity.
Company Formation in Jamaica: What Do You Need to Get Started?
Embarking on the journey of company formation in Jamaica requires careful planning and adherence to regulatory processes. To initiate the process, consider the following steps:
- Research and Planning: Understand the market and regulatory environment, and outline a solid business plan.
- Choose a Business Structure: Decide between an LLC and a Registered Business/Sole Proprietorship based on your business goals and preferences.
- Name Reservation: Secure your chosen business name by registering it with the Companies Office of Jamaica.
- Documentation: Prepare and submit the necessary documents for incorporation, such as articles of incorporation for an LLC or the registration form for a Sole Proprietorship.
- Compliance: Ensure compliance with taxation and regulatory requirements, including obtaining a Taxpayer Registration Number (TRN) and adhering to any sector-specific regulations.
Important Tip: We always recommend having a preferred legal name and two alternatives in case the primary legal name is unavailable.
Frequently asked questions when incorporating a company in Jamaica
We’ve compiled a list of commonly asked questions and typical uncertainties that our clients frequently encounter when undertaking the process of incorporating a company in Jamaica.
Yes, a business can be 100% foreign-owned by either legal persons (“legal entities”) or natural persons (“individuals”)
3-5 business days is what it takes to register a business in Jamaica
An LLC is a type of legal structure that combines elements of a corporation and a partnership. It provides limited liability to its owners, known as members, which means that their assets are generally protected from the company’s debts and liabilities
In Jamaica, a Registered Business or Sole Proprietorship refers to a type of business structure where a single individual owns and operates a business.
Companies Limited by Shares (LLC) which is similar to Sociedad de Responsabilidad Limitada (S.R.L.)
LLC (Limited Liability Company): An LLC is a separate legal entity from its owners, known as members. It offers limited liability protection to its members, meaning their assets are generally shielded from the company’s debts and legal liabilities. They are taxed as separate entities and may be subject to Corporate Tax. LLCs are created by filing formation documents with the Companies Office of Jamaica and typically have a more formal legal structure.
Sole Proprietorship: A Sole Proprietorship is not a separate legal entity; it is an unincorporated business owned and operated by a single individual. The business and the owner are considered the same legally. There is no legal separation between personal and business assets and liabilities. The business’s profits and losses are taxed at the owner’s tax rates. The business can be registered at our Companies Office or the proprietor may operate without registration and refer to themselves as a Sole Trader
Biz Latin Hub can assist with company formation in Jamaica
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in major cities in the region.
We also have trusted partners in many other markets. Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
As well as knowledge about company formation in Jamaica, our range of services includes hiring & PEO accounting & taxation, company formation, bank account opening, and corporate legal services.