Gov’t unfazed by investors’ pullout

The CNMI government is not even a bit fazed by the reported pullout of at least two groups of Korean investors who would have established $25 million worth of shooting galleries in the Northern Marianas.

Gov. Pedro P. Tenorio said potential earnings from the infusion of additional capital through the construction and operation of shooting resorts in the CNMI are not part of the projected revenues for the financial year 2002.

Mr. Tenorio appeared to have not been bothered a bit by declarations made by Korean investors of their plans to move instead to Guam for their shooting resorts due to the restrictive investment policies in the Commonwealth.

Due to its restrictive investment laws, Northern Marianas has been losing potential foreign businessmen to Guam where investors can get a greencard and American citizenship in five years for a minimum of $250,000 in total investments..

Aside from not requiring foreign investors to post a cash security deposit, Guam has also streamlined the business permit renewal process by making the licensing office perform all clearances.

Some Korean investors planning to put up a $25-million shooting resort in the CNMI have abandoned the project and are now in the process of negotiating with the Government of Guam, which is reportedly more enthusiastic to the galleries.

This turn of events translates to over $1 million in annual revenue loss for the Commonwealth government, aggravating the already dampened economic situation in the Northern Marianas.

The pullout also represent a huge loss of at least 10,000 visitors to the islands each month and more than 200 employment opportunities for local workers. These do not include potential revenue losses from income taxes and the workers’ spending that may support other businesses.

Korean investors said the new version of the shooting resort bill requiring $5 million for the exclusive license fee for 15 years is “too absurd” for them to even consider.

The governor remains confident a myriad of investments will start coming into the Northern Marianas due to the recent installation of measures that give foreign and local investors a lucrative set of incentives for expansion and fresh infusion of capital.

He hinted that the CNMI community may not be ready yet to see shooting galleries on the islands, adding that public safety should not be compromised in exchange for additional revenues for the government coffers.

He noted that the Commonwealth Development Authority has started receiving applications and inquiries from foreign companies wishing to take advantage of the Qualifying Tax Certificate program, which offers them attractive perks that are at par with those offered in neighboring islands and countries.

Officials are confident the new incentive program would build stronger economic backbone for the Northern Marianas, which has been largely dependent on tourism and apparel manufacturing activities.

Under Public Law 12-32, CDA would issue a Compliance Certificate to businesses that have qualified for tax rebates or tax abatements in exchange for a new business activity on the islands.

Businesses that are qualified to become a holder of the Compliance Certificate are those engaged in franchise restaurants, water parks, cultural centers, theme parks, resort hotels and condominium, golf courses, electronic commerce, telecommunications, manufacturing and other tourism-related activities.

Minimum capital that should be involved in the new and expanded investments ranges from $500,000 to $10 million, depending on the type of business that will be established.