Business barriers hit •Incentives won’t go far if restrictive laws remain, business leader says

As the CNMI government prepares a package of incentives for the planned Free Trade Zone, Saipan Chamber of Commerce president Joe Ayuyu has urged officials to amend or repeal laws that currently restrict investors from doing business in the CNMI.

Ayuyu has recommended a review of all laws affecting businesses in the Northern Marianas so that legislators can pass the necessary legislations to change those that have hindered the development of investments.

“Before we can even start talking about giving new incentives, why can’t we start eliminating these barriers to businesses. The only way to do this is by taking a look at those laws that do not enhance the growth of businesses,” said Ayuyu.

In a move to lure more businessmen invest in the CNMI, the Free Trade Zone subcommittee has outlined a package of incentives that will be available to foreign investors when they set up businesses here. This was primarily due to the closure of almost 1,000 businesses, mostly Koreans and Japanese, as a result of the economic problems in Asia.

The outgoing chamber president said investors who will infuse at least $5 million on the island will not entrust their investment to people they do not trust, thus they should be given a free hand to bring in their own employees without any restriction.

“It would be an embarrassment if we find out later on that we cannot even deliver the incentives that we’ve promised,” he said.

The Chamber has been highly critical of the $100,000 security deposit which investors must comply with under the Foreign Investment Law. A proposed amendment passed by the House of Representatives to the Foreign Investment Act will ease the requirement on the $100,000 security deposit by allowing businessmen to pay either in cash, bonds or mortgage their capital equipment.

Likewise, businessmen on the island are opposing the passage of a proposed law imposing a moratorium on the hiring of guest workers since the island does not have enough qualified workforce.

Among the key incentives drawn up by the subcommittee are unrestricted repatriation of profits, low business tax, use of Made in the USA labels on finished products, quota-free treatment of qualified goods exported to the mainland as provided in Headnote 3(a), unhampered entry of capital goods and tax benefits for employees.

The subcommittee says CNMI’s proximity to Asia, modern banking and financial services, low crime rate, reliable shipping schedule, direct dial communications network and U.S. standard mailing system make the islands a conducive place for investments.