Get your Custom’s Duty deferred

With a new year comes the opportunity for renewing, rethinking, and reinventing ourselves, our families, our communities, and our businesses.

Today’s article will introduce you to an economic tool, the BEDC EEZA Customs Duty Deferment, which could assist you in renewing, rethinking, and reinventing your business or property.

The BEDC EEZA Customs Duty Deferment incentive, allows business and property owners located in an Economic Empowerment Zones (EEZ) to take advantage of a deferral of customs duty for capital projects. 

The purpose of the incentive is to allow business and property owners the ability to undertake significant capital projects or purchase capitalized items that will help their business to grow or property to thrive, while giving them the option to pay the duty associated with those investments over time when they are in a much healthier financial state. 

For example, we have supported development schemes that involve the importation of materials for renovation, furniture, equipment, computers, POS systems, electronics, company vehicles, etc.

The duty deferment can be applied to all imported goods, materials, merchandise and construction and other equipment used in the development of a project that meets the intent of the approved scheme. The deferment will NOT apply to:

• Goods considered inventory for resale;
• Goods for reuse on another project or property outside of the EEZ; or
• Normal operating supplies (e.g. replacement light bulbs, cleaning supplies, office supplies, stationery etc.).

The deferment is only available to the owners of properties or businesses located within an EEZ. Further, the business must be registered with the Bermuda Economic Development Corporation.

In the designated EEZ areas research has shown that many of the businesses have challenges that leave them at an economic disadvantage in comparison with other commercial areas in Bermuda.  As such, these economic incentives have been established to empower business owners already in the zones and incentivise others to consider locating their businesses into the zones.

Irvin Hendrickson, owner of Hendy’s Laundromat which is scheduled to open in March in the Northeast Hamilton EEZ, is a testament to the assistance the EEZ incentives can provide. 

“The customs duty deferment allowed me to get the equipment for my Laundromat and gave me a lot of breathing space. I would have had to pay approximately $35,000 in duty up front for washers and dryers I imported. 

“Without the duty deferment I would have had to find those extra dollars — that would have been a major financial challenge.

“All of the assistance the EEZA has provided me by way of a grant, bank preferential rates and terms, customs duty deferment, and most of all advice and support has been top notch and has helped me to realise my dream business which will open in March.

“I would encourage any business owner to seriously look at the EEZs and not look a gift horse in the face because of pride or not wanting to do a bit of work.  It works and I am a testament to it.”

Since 2008, the total value of goods imported through this scheme to date is $847,845.14 resulting in over $200,000.00 of duty being deferred. 

Of those businesses that have been awarded an EEZ Customs Duty Deferment, 91 per cent are still in operation in 2013 due in part to the assistance afforded by the concession.

In addition, 91 per cent continue to be located in an EEZ. 

For further details and information on how to apply for a customs duty deferment, the process, and the terms and conditions can be found online at www.bedc.bm. 

You can also contact the EEZA at 292-5570 or email [email protected].

Erica Smith is director of the Economic Empowerment Zones Agency, responsible for ensuring the development and implementation of Economic Empowerment Zones throughout Bermuda.