Defining small business first step to help, says official

| 17/02/2011

(CNS): Small businesses in Cayman need to be identified in law if they are to be able to enjoy benefits that the government might give them, small business owners heard at a meeting organised by the Cayman Islands Small Business Association on Tuesday night at the Mary Miller Hall. The problem of how to define a small business was raised by a finance ministry official who pointed out that small businesses could not be classified purely on the number of staff they employ  At the same meeting the chair of the Work Permit Board also told small business owners that they should not be afraid of applying for key employee status for staff.

CISBA President Rhonda Kelley, of Kelly Holding Ltd, invited both the chief officer in the Ministry of Finance, Dr Dax Basdeo (above), and Sherri Bodden-Cowan, Work Permit Board and Immigration Review Team Chair, to speak to a group of small business owners, most of whom were members of the CISBA, to hear first hand of efforts being made by government to ease the financial suffering of many small businesses.

Basdeo said that the conundrum for government was deciding exactly what constitutes a small business. While the CISBA defines a small business as any operation with ten or less employees that might not be an appropriate definition for small businesses as some Cayman branches of major corporations would fit that description.

The definition may need to be clarified as independently owned and operated, with close control over operations and decisions held by the owners but he said financial data may have to be considered.

"Without consideration of financial data, you may have a business that has under ten employees making millions of dollars in any given year.," he said offering the example of a small law firm. "This would then obviously defeat the purpose of trying to support the most vulnerable businesses in our economy – those where the owners often invest their entire livelihood into the perceived viability of their business."

He added that there were other complications too defining small business both in terms of employees and their financial threshold when many small businesses don’t even have accounts or the expertise to prepare them. But once government had made that distinction in law, then moves could take place to grant small businesses concessions when it came to work permit and other government fees, he confirmed.

Some other ideas that government was currently looking into to assist small businesses included simplifying the Trade & Business licensing process by adopting international clarification so that it would be clear exactly what licences are needed for any type of business.

Also on the agenda for discussion was the possibility of introducing two types of categories for business licensing – "reserved"  where certain types of business such as artisan, handicraft, convenience stores and water sports would be reserved for 100 percent Caymanian ownership) and "restricted" when foreign ownership would be restricted to perhaps just 10 or 20 percent, such as barbershops or taxis. He said government wasn’t planning on removing the 60-40% but was seeking more felxibility.

"By introducing clarity, transparency and flexibility into the law and regulations, this can serve as a policy tool for government," he explained. "Where we would like to slow foreign investment into a particular sector we can do so. Where it would be advantageous to encourage it the threshold can be lowered."

The Department of Commerce and Investment, which currently drives small business assistance in Cayman and is overseen by the Ministry of Finance is also looking at synergies between it and the UCCI, with the possibility of a centre for small business to be created to expand the current business programmes offered by the DCI.

Basdeo said that meetings with small business owners, like the one with the CISBA, was a great way to encourage dialogue and ensure that the voice of small business was heard among the other loud voices demanding the government’s attention.

Sherri Bodden-Cowan admitted that she had not even heard of the CISBA until very recently, even though it was formed over a year ago. As a small business owner herself (Bodden-Cowan owns Bodden & Bodden law firm), she said she understood the challenges faced by small business owners.

She confirmed that government needed to define the term "small business" in law before it could assist small businesses with such things as lower work permit fees. As a result of the CISBA meeting, she confirmed that Basdeo had requested a meeting with the IRG to discuss moving forward on the issue.

Bodden-Cowan went on to say that small businesses lacked the human resources services that larger companies had access to, which put them at a disadvantage when it came to issues such as applying for key employees and she called for a Human Resources Authority to be instigated, which would have a positive impact on the entire immigration process.

Discussing the issue of key employees, Bodden-Cowan urged small businesses to make such applications where necessary. “Small businesses should not feel that they are not eligible to apply for key employee in any position they feel is justified,” she said.

Bodden-Cowan said that recent reports that key employee positions were being denied needed closer examination. “If you look at the statistics you will find that around 80 percent of those key employee applications were for domestic helpers where a family is hesitant to lose a helper who they have got used to but where there are no special circumstances that would warrant it,” she stated.

She went on to say that there were a wide variety of situations where a business could justify the need for a key employee and this applied to small businesses as well as large.

She urged small business owners to specify explicitly the reasons why they felt the person should be key, such as the fact that they were recognised experts in their field, or that they were responsible for training Caymanians, and then prove these statements, such as by providing letters written by the trained Caymanians as a testament to the individual.

“The Work Permit Board is specifically geared up for small businesses but applicants have to state their case and provide evidence to back up the criteria in law,” she said.

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  1. Libertarian says:

    ***** Small Businesses are not being represented well in the Cayman Islands. Too much government regulations and hikes in permits, business licenses, fees, and import duties. How can they ever survive and create more jobs if government is not giving them a chance to do so??? *****

  2. Scrooge says:

     yep… more  blah, blah, blah… where’s the help? just had to let go another employee.

    it’s called working capitol… the likes of which you can’t get from either the banks or the government.

    …but I can get a $30,000 car loan, at the drop of a hat… my nephew has a $38,000 Toyota Tundra for Pete’s sake.

    But a loan for a small business? forget it.

    Bah Humbug

  3. Anonymous says:

    The stats tell a different story – if your small firm is not in the Finance sector the chances are your key employee application will be turned down

  4. Anonymous says:

    90% of Cayman businesses are “small businesses”. Even the Chamber of Commerce is made up of 85% businesses under 15 employees.

    This is a waste of time and is pure academics.

    Lets get on with it…..please.

  5. whodatis says:

    The year is 2011 and this is where we are on these matters?!

    Absolutely ridiculous.

    I am so tired of hearing of these entities and bodies of never-ending acronyms – why do they even exist?!

    This is not a empty rant – I have had experience with certain entities and I walked out with as much info and progress as when I walked in.

    All I heard was; "Oh, it depends on this and that…" or "I am not really sure – I’ll have to follow up on that…" or "Well, such-and-such a company did a similar thing so MAYBE you could expect the same result – perhaps you should call Mr. Big Man in the respective Gov’t Dept. and see what he says …"??!!

    LAW is LAW!! RULES are RULES!!

    Can we please just follow them? If they are non-existent – could we have not created them by now?! For goodness sake – if there is one thing this country is not lacking it is access to a freaking lawyer!

    I don’t want to have to ‘make a call’ – is this the damn 3rd world?! Are we not a ‘world class’ banking center? We do we have to have to deal with this crap? There is no certainty of the likely outcome of many aspects of small business ownership – there is too much of "do it and see what happens".

    However, as I always say – there is a GREAT DIVIDE between the ‘international’ sector of Cayman and the ‘domestic / retail’ sector – just look at the general low quality of service as we do our daily and monthly transactions. The standards of professionalism clearly were not spilled over to the other side – yet another example of previous governments taking their eye off the ball.

    (Rant over – as you were.)

  6. Anonymous says:

    How long have we been discussing this? Get it done already! My God …