Payroll Tax Concession can kick-start your business

FRIDAY, NOV. 09: EEZy Does It! is a monthly column presented by the BEDC’s Economic Empowerment Zones Agency (EEZA). Every month, read about entrepreneurship and business opportunities, obtain business management tips, and find out what’s going on in the EEZ business sector.

Wow! It’s November already. Where has the year gone? It’s amazing to think that this will be the ninth edition of EEZy Does It!

In the first article we discussed exactly what an Economic Empowerment Zone (EEZ) was and how the Bermuda Economic Development Corporation (BEDC) and its Economic Empowerment Zones Agency (EEZA) was making a difference in the various zones.

The second article focused on the “BEDC EEZ Small Business Grant of Technical Assistance and Advice” and how access to grant funds has helped businesses start up, grow, and become more sustainable in the three EEZs.

The focus of this article will be on our “BEDC EEZ Payroll Tax Concession” programme. The details of programme include:

• A concessionary Payroll Tax rate of 5.25 per cent offered to new businesses
• How the concession is available up to a maximum of nine tax periods.

Any new business that established a physical presence in the NE Hamilton EEZ after July 1, 2007 or in the Somerset and St George’s EEZs after March 29, 2011 can apply to take advantage of the concession.

The business must also be registered with the Bermuda Economic Development Corporation.

The main impetus for the development of this product was to encourage and attract businesses to start-up in or relocate to an EEZ.

In order to do this, incentives were instituted in an effort to get entrepreneurs to actively consider the EEZs as viable places to either start a new business in or relocate an existing business to.

The EEZ Payroll Tax Concession allows start-up businesses an opportunity to grow and thrive over a defined period to allow financial growth of the business through reduced overhead costs.

The concession also allows the EEZs to compete with other locations island-wide as being a viable place to own and operate due to the financial savings that the concession provides.

This allowance is one in an arsenal of tools to assist businesses located in an EEZ to become more successful.

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 areas in Bermuda.

As such, incentives such as the EEZ Grants and the Payroll Tax Concession have been established to empower business owners, setting them on a path to sustainability and success.

Since 2007, of those businesses that have been awarded an EEZ Payroll Tax Concession, 89 per cent are still in operation in 2012 due in part to the assistance afforded by the concession.

In addition, 78 per cent continue to be located in an EEZ.

For further details and additional information on how to apply for a payroll tax concession, 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].

Be sure to check out the next article which will detail the benefits of the “BEDC EEZ Customs Duty Deferment” programme.

Erica Smith is director of the Economic Empowerment Zones Agency, responsible for ensuring the development and implementation of Economic Empowerment Zones throughout Bermuda. Through the creation of adequate policies Erica manages the transformation of Bermuda’s three EEZs in North East Hamilton, Somerset and St George’s, to ensure economic, social and physical issues are identified and addressed.