The Microbusiness Companies Act, legislation originally touted as the savior for small businesses that felt stifled against international financial services requirements was yanked from enforcement following reports that the response to the legislation was underwhelming.
The Micro Business Companies Act, 2017 was enacted by the House of Assembly on 24 November 2017 and brought into force in 2018. The aim of the Act was to provide a new regime for the registration of micro-businesses, defined by the Act as businesses with an asset value or annual turnover of no more than two million (in any currency) and not more than 10 employees.
In bringing a Bill titled ‘Suspensory Act 2020’ to the House to make the Microbusiness Act ineffective the Premier noted that the legislation did not live up to its purpose. Therefore, Hon. Fahie explained that once the Suspensory Act 2020 was passed and received assent the Microbusiness Act will cease to be enforced.
The Premier told the House, “The Microbusiness Act 2017 came into force on 4 June 2018 when there was a perceived optic of interest in it and the technology underpinning it was being advanced. Unfortunately, interest for the Microbusiness Company continue to lag and so this type of company was not included in what was then the draft substance legislation being negotiated also in 2018.”
In further explaining why there was no need at the moment for the legislation the Leader of Government Business added, “With the Substance Legislation now being law the Microbusiness Companies Act 2017 must be suspended until such time as: one, the mechanism to incorporate such a company is fully in place; and two, this type of companies are included in the Substance legislation.”
Senior Member of the House of Assembly and Third District Representative Hon. Julian Fraser commented on the uncommonness of the legislation when he rose to contribute to the debate. He told the House, “For the amount of years I have been here I don’t recall seeing a Bill with such a title. It is very short…and it is dealing with the Microbusiness Act.”
Hon. Fraser also told his colleagues that for years he has been complaining that local businesses are being unfairly saddled with the onerous financial services requirements; and called on the government to do something to shield local businesses from these requirements and was informed that the Microbusiness legislation was the answer. “They said they came up with the Microbusiness initiative to which I said nonsense. It has nothing to do with what I am talking about and they tried to explain it away…”
Hon. Fraser said that he was assured that the Microbusiness Act was either going to solve the problem or attempt to solve the problem: “Mr. Speaker here we are today talking about suspending it. I have no problem with the suspension whatsoever.”
During the presentation of the Bill Hon. Fahie explained that the bill provides for Microbusiness Companies Act 2017 to be brought back into force with a notice from the Minister duly published in the Virgin Islands Official Gazette. However, Hon. Fraser said that this should not be the case. “the Premier said that at some later date it will come back but as far as I am concerned it can go and never come back because it doesn’t help me. I don’t even see how it helps the industry.”
“I understood that there were companies that had an interest in it, or businesses that had an interest in it, but now I am hearing different – it didn’t live up to the standards.” Hon. Fraser asked the Premier what would happen to any company that already registered… under the Microbusiness Companies Act…” To which he was informed that there was no issue in this area.
Minister for Education, Culture, Fisheries and Agriculture, Dr. the Hon. Natalio Wheatley explained that the suspension of the Act was necessary, and in keeping with the ever pressing economic substance requirements. “We are bringing the Suspensory Act 2020 simply to suspend the Microbusiness Companies Act because the Microbusiness Companies Act does not conform to the requirements for Economic Substance. I would imagine Mr. Speaker that it is easier just to suspend the Act rather than retool it to meet the requirements of the Economic Substance.”