WEDNESDAY, MAY 30: Cut-price rents on offices and payroll tax breaks for employees could help lure international business to Bermuda, according to new Chamber of Commerce president Ronnie Viera.
Mr Viera was speaking as he settled into his new role after taking over at the helm of the Chamber less than a fortnight ago.
Drawing new international business here, he suggests, “may mean government offering to subsidise the first year’s rent for companies setting up here. Or it may mean payroll tax breaks for the first ten employees they hire.”
Mr Viera — who stressed he was speaking in a personal capacity as he had not discussed rent and tax breaks with the Chamber’s board — added: “Cayman has set up a special economic zone and they are spending some money to try and get some business there, although it remains to be seen if it will work.”
The Caymans Enterprise City — billed as the first of its kind in the world — has several specialized business parks on a single site.
The zone offers exemption from work permits and waived import duties, as well as income and corporate tax exemptions, as well as other incentives.
Mr Viera said: “We have to go to where the money is and, as in the past 10 to 15 years, where we have got most of our economic activity from is the international business community.
“We have to find out how we can work with them to make Bermuda the destination it was before.”
He said that some rent and tax breaks may not be major factors for massive companies — but that it signalled a welcome to Bermuda in the way that relaxations of the controversial term limits on work permits had done.
Mr Viera said: “There are certainly disincentives for business to keep jobs on the island — term limits is one of them and I know government is addressing that now, but the business community did spend six or seven years trying to discourage the implementation of term limits.
“That’s one reason, in a local context, why we have less business working here. Businesses have implemented alternative strategies.”
He added: “There are a number of factors — there is the global economy and global recession. There is investment income, which is clearly down and many insurance and reinsurance companies rely on that.
“With revenues down, companies are looking to cut costs where they can.”
Mr Viera took the helm of the Chamber less than a fortnight ago. He replaced Buddy Rego, who stepped in late last year after Stephen Todd resigned to fight a Parliamentary seat for the PLP.
Mr Viera said he saw two main challenges — with the first being to “reinforce the membership we have and to encourage new members by demonstrating the value the Chamber has to offer”.
He added: “Our membership is down and we need to work on getting it back up. The second thing is the Bermuda economy in general and working with the government and other agencies to get business to our members.”
Mr Viera said that a thriving international business sector was vital to the economic success of the rest of the economy.
He added: “The economy, being what it is, is putting pressure on a lot of businesses and people are losing their jobs, which is a big concern across the board.
“It’s across the whole spectrum — restaurants have been hit because there are fewer people spending money, particularly the business community, on lunches and dinners, and in retail.
“The retailers are trying hard to attract business — there seem to be ‘sales’ on regularly — and they are trying to address prices to make them more competitive with the US.
“But if the available pool of money is smaller, there will be lower sales no matter what they try to do.
“The Chamber also has a real estate division and sales and rentals have clearly been impacted. That’s a situation Bermuda hasn’t faced, certainly in my lifetime. This is a challenge we all have as a community and we’ve all got to keep battling.”
Mr Viera noted that business development and tourism were now part of the same Ministry — but that most of the budget appeared to be spent on improving tourism, rather than on attracting international business.
He added: “That’s not to say I don’t support tourism because it fills restaurants and hotels, too — but so does business. I don’t think either one has to feed at the expense of the other, but we have to try to get both of them working again.”
And he stressed he did not believe Bermuda was broken and that it had had its day in the sun.
Mr Viera said: “I believe we have to change our model, but we still have one of the most beautiful islands in the world and that’s something we can market and which we can be successful at.
“Our situation is not irreversible — we still have a good number of companies working and operating in Bermuda and I think that the government’s position on international business has become a lot more positive since Premier Paula Cox took over.”