I just came from lunch with Chad Cunningham and Gordon Swaby. We are trying to figure out, and put into words, the issues facing tech (more specifically internet/web) companies in Jamaica for a meeting with a government official coming up shortly.
After going through many scenarios of issues we face, the recurring theme always came back to the “small problems”.
- Registering an LLC easily & cheaply
- Getting all documentation and tax compliance information in order for everything to be above board.
- Getting health insurance for the owner and the handful of employees (and their families)
- Accepting VISA, Mastercard, Discover, American Express from any consumer around the world
- Doing business with US-based organizations
- Importing any equipment we may need (laptops, computers, networking equipment, iPads, etc.) for everyday use - with a predictable cost. Right now, you never know what the end cost will be once the various duties and levies are attached.
Right now, all of the above are a headache in one way or another.
I have had to register a US-based Delaware Corp to get a US bank account to allow me to get a US payment processor account to process US-issued credit cards. All of that was easier (not easy) than working with the local banks. Not to mention that the local banks don’t process (the last I checked) Discover and American Express issued cards.
Gordon eloquently summed up our current problems with this phrase that I love so much that I had to write a post about it.
“Our biggest problem is the sum of our smaller problems.”
- Tech startups don’t need a government run Venture Capital arm - what we need is a regulatory & justice system that allows investors to purchase preferred shares (or even common shares) in our companies and be adequately protected (both from culpability & liability for the wrong-doings of any companies they invest in). Just like a typical equity investment in the US.
- Tech startups don’t need a government run health insurance program - what we need is to be able to buy insurance from the existing entities on similar terms that any individual can get by joining Churches Credit Union, or JN.
- Tech startups don’t need large tax incentives because our net margins are high, and paying taxes is a good problem to have.
- Tech startups don’t need any government land or buildings - because we can get by in our own homes/garages/offices.
- Tech startups don’t need special treatment - all we need is fair treatment. We need the government to either issue new banking licenses to encourage competition in the banking industry - specifically to a bank interested in specializing in e-commerce transactions. From selling products online, to managing subscription payments in Software-as-a-Service (SaaS) apps. Or heavily lean on existing institutions to be more e-commerce friendly, although…the skeptic in me thinks we would be better off with good old-fashioned competition. Issuing a new banking license to an entity interested in mobile & e-commerce would probably be the best bet.
- Tech startups don’t even need import waivers, we just need certainty. We need to know that if we are bringing in an iPad, once it touches the shores we will be paying a flat fee (that is reasonable, 50%+ is NOT reasonable) for duty. We already know, via Mailpac, what the flat fee for the shipping will be. We need to know all the other flat fees.
Once those problems are fixed, the last thing we need is for JAMPRO to tell the world that Jamaica’s tech industry is open for business.
Show investors that there is a clear path to liquidity via our Junior Stock Exchange and JSE (especially through a USD offering).
In short, we just need the government to streamline the basic issues that we have to deal with - i.e. the “small, every day problems”, and we will take care of the rest.
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