Employer of record in Jamaica

The economy

Jamaica is based on a mixed economy which includes service/hospitality, aluminum, and agricultural products. Manufacturing makes up about 12% of the national GDP whilst trade makes up 25 % of the GDP. 

The government of Jamaica encourages foreign investments which generate jobs, they are also a member of the Caribbean Basin Trade Partnership Act (CBTPA) and the Caribbean Community and Common Market (CARICOM). When it comes to the financial sector, it is dominated by commercial banks and their central bank here is the Bank of Jamaica.

Small and medium businesses

Small and medium businesses contribute about 40% to the GDP but they constitute 95% of companies, only about 13% of which contribute to exports. Small and medium businesses in Jamaica suffer from a lack of transparency, business owners often use their personal bank account for business transactions, but cannot come up with the proper paperwork to satisfy loan applications. This gives foreign investors an edge.

Jamaica started the Export Max Development program with the aim to assist companies in exporting more goods. The program collaborates with the Jamaica Promotions Corporation, the Caribbean Exports, and other groups.

Starting a business

To start a business, a person needs to first get a working permit by contacting the Jamaican Ministry of Labor and working with the Work Permit Department of the Ministry of Labor. The work permit will cost between JM$27,000 to JM$108,000 for a year. The next step is to apply to the Companies Office of Jamaica to register the business; there are three main choices: a sole proprietorship, a partnership or a corporation. 

The person will then need to apply to the Companies Office of Jamaica and fill out a Registration of Business Names. After this you must file a balance sheet and a profit-and-loss statement with the Companies Office of Jamaica and submit a copy of Jamaican Form 31 and a copy of the articles of incorporation.

Payroll

There are many things that payroll contributes to in terms of taxes. The employee contributions are 3% for the National Insurance Scheme, 2% for the National Housing Trust, 2.25% for the Education Tax, for a total of 7.25%. The employer contributions are 3.0% for the National Insurance Scheme, 3% for the National Housing Trust, 3.5% for the Education Tax, and 3% for the Human Employment & Resources Training, for a total of 12.5%

Tax advantages

There are several acts that offer relief for tax: Urban Renewal (Tax Relief) Act to encourage redevelopment in blighted urban areas across Jamaica, The Income Tax Act, the Bauxite and Alumina Industries Act which allows for special provisions for bauxite, alumia and other related enterprises, and the Charities Act which makes provisions for charities. Jamaica avoids double taxation by using foreign tax credits available under different tax treaties.

Renewable energy

Jamaica wants to make 20% of its electrical energy renewable by the year 2030, since the island is bathed in sunlight, it is well suited for solar energy. Jamaica started the Wigton Wind farm as part of its renewable energy strategy and is also looking into biomass by harnessing the sugarcane and coffee residues.

Food culture

The food culture is inspired by West Africa. Roasted meats with fried fish and rice are common. A popular dish is Jerk Chicken, which is made with scotch bonnet pepper, scallion, onions, pimento, and thyme. They also eat goat curry and other meats such as beef, pork, and chicken.

With access to tropical fruits such as mango, banana, coconut, pineapple and guava, fresh fruit juice is popular. Jamaicans like to eat a good breakfast which typically consists of tea, salt fish, roasted breadfruit or boiled

Population

The Jamaican population is 2,827,377 and about half of them live in urban areas with an official language of English, but Jamaican creole is also widely spoken. The Jamaican people are mostly Christians with 64.8% protestants, there are also many Seven-day Adventist and Pentecostal churches.

The country motto reflects a mixed heritage, “Out of many, one people”. This reflects their love of good discussions and spending time together in closely knit neighborhoods. They have a strong sense of entrepreneurship and they work hard to establish financial security with a great literacy level of about 88.1%.

Geography

Jamaica is part of a chain of islands that make up the northern edge of the Caribbean Sea and it lies just south of Cuba. About 80% of the island is mountainous and about 11% of the landscape is suitable for cultivation.

Jamaica enjoys a tropical maritime climate with temperature varying between 70 to 90 degrees Fahrenheit, although the dry season temperatures are cooler the island enjoys full days of sunshine. Because of this it is home to a large biodiversity of plants and birds.

Jamaica is the 6th easiest country in the world to do business and the best in the Caribbean, so if you’re looking to move to somewhere hot and beachy this is the best place for you.

General highlights

What you need to know about employing personnel in Jamaica:

Laws and agencies that regulate labor relationships

Employment law in Jamaica is divided into two parts: Individual Employment Law and Collective Employment Law. Individual employment law is about relations between the employee and the employer, and collective law is the collective representation and organization of employees. 

This includes their rights, and obligations of the representatives for employees. There is no main labor code, instead there is Federal Legislation, case law, collective bargaining agreements, works council agreements and individual employment contracts.

Key tax and labor authorities

Labor contracts

Annual taxable income

Income tax for individuals in Jamaica is generally at a rate of 25% on income in excess of the annual tax-free threshold, whatever that may be that year. However, if an individual has an income that exceeds JM 6 million per annum it is subject to 30% income tax.

Corporate tax rates

Mostly the corporate tax rate is 25% for listed companies and 35% for unlisted companies or private limited companies. But for banks and other financial institutions this increases to 37.5% for listed and 40% if not.

Public holidays

Termination