May 2020 | By and

COVID-19: A summary of legislation enacted in relation to corporate regulations and businesses

On 11 March 2020, the World Health Organization (“WHO”) classified the global spread of COVID-19 as a pandemic.  Shortly thereafter, on the 13 March 2020, The Bahamas recorded its first case of COVID-19.  In response, the Governor General declared a public state of emergency and implemented the Emergency Powers (Covid-19) Regulations, 2020 (“The Regulations”) on 17 March 2020 in an effort to combat thespread of the virus.

Pursuant to the Regulations, The Emergency Powers (Covid-19) (No.2) Order, 2020 and the Emergency Powers (Covid-19) (Special Provisions) Order, 2020 (“the Orders”) were made by the Competent Authority (“Prime Minister of The Bahamas”) on 23 March and 30 March, 2020, respectively.  These Orders relate to the operation of businesses, restriction of movement and other relevant information.  As of 27 April 2020, it was affirmed in Parliament that the Regulations and the Orders would continue to be in effect until the 30 May 2020.  

Below is a summary of the provisions contained in the various Orders.

A. SUSPENSION OF REQUIREMENTS TO PERFORM CERTAIN OBLIGATIONS

Suspension of obligations under certain legislations to file a document, pay fees or renew a license, visa or permit

The requirement under any enactment:

i) to file a document with;
ii) pay a fee to; or
iii) to renew a license, visa or permit issues by,

any government entity, statutory body or regulator has been suspended for the duration of the state of emergency and for an additional thirty (30) days thereafter.

The suspension of certain obligations under this heading does not apply to obligations that may arise under:

i) The Customs Management Act 2011;
ii) The Value Added Tax Act 2014;
iii) The Real Property Tax Act;
iv) The National Insurance Act;
v) an obligation to make a payment into the court for child support and maintenance; or
vi) any other civil payment ordered to be paid into court.

 

Suspension of obligations under certain legislations to file a document, pay fees or renew a license, visa or permit

Any limitation period under the Limitation Act, 1995, has been suspended from 17 March 2020, through the duration of the state of emergency and for an additional thirty (30) days thereafter.

Suspension of obligations under the Register of Beneficial Ownership Act

The duty for:

i) a legal entity incorporated or registered before 20 December 2018; and
ii) a registered agent,

to comply with the provisions of the Register of Beneficial Ownership Act 2018, has been suspended for the duration of the state of emergency and for an additional sixty (60) days thereafter.

Suspension of requirements under the Companies Act and International Business Companies Act

Any requirement to pay any fee, make any payment instalment in an arrangement, or file any declaration or document under the Companies Act has been suspended from 17 March 2020, through the duration of the state of emergency and for an additional fourteen (14) days thereafter.

Any requirements to pay any fee or file any declaration or document under the International Business Companies Act has been suspended from 17 March 2020, through the duration of the state of public emergency and for an additional fourteen (14) days thereafter.

Suspension of Sealing Requirements for Deeds and Documents

i) The requirement to seal a document purporting on its face to be a deed has been suspended. Such documents shall be conclusively deemed to be a deed notwithstanding that no seal is impressed or affixed; and
ii) The requirement of any company incorporated under the Companies Act or International Business Companies Act to have its common seal affixed to a document has been suspended, provided that the intention to affix the seal is declared in the document.

These requirements have been suspended from 17 March 2020, through the duration of the state of emergency and for an additional fourteen (14) days thereafter.

Suspension of payments for Health, Medical and Insurance Premiums

Obligations for persons to pay their insurance premiums have not been waived or suspended. However, the payment of group, general, medical and life insurance policies have been deferred from March 17, 2020, through the duration of the state of emergency and for an additional sixty days (60) thereafter.

Insurers are obligated to honor any claim arising during the deferral period and may only subtract renewal fees and deductibles from an insurance claim.

B. ECONOMIC RELIEF PROVISIONS FOR BUSINESSES

The Bahamian Government has implemented a number of financial relief assistance programs to assist Business Owners impacted by the COVID-19, as outlined below:

LARGE BUSINESSES

Businesses with an annual turnover of $3 million or more and have an overall staff complement of 25 or more (total employees)

The Government has implemented a Tax Credit and Tax Deferral Employment Retention Program which applies to large businesses. In summary, this program allows businesses which meet the requirements to withhold outstanding business license fees or VAT receipts up to the maximum of $200,000 per month for up to three months.

Requirements/terms:

  • The deferred taxes or tax credits must be used to assist with covering non-executive payroll expenses
  • Eligible businesses must agree to retain 80% of their employees through to 31st October, 2020
  • The payment of taxes will be deferred until January 2021, to be repaid in twelve (12) monthly installments

This concession is not available to businesses in the following sectors:

  • Hotel & Resorts (which are closed during this phase)
  • Retail or Wholesale grocery food establishments
  • Regulated Telecommunications Sector
  • Regulated Financial & Insurance business
  • Gaming

For eligibility requirements and full details of the program visit: https://inlandrevenue.finance.gov.bs/covid-19-tax-credit-deferral/

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)

Businesses with an annual turnover below $3 million

The Government has implemented the Business Continuity Loan Program. This program provides loans ranging from $5,000 to $300,000 to MSMEs, to assist with ongoing operating costs (ie salaries, rent, insurance, utilities and inventory/supplies).

Requirements/terms:

  • Eligible businesses must retain 51% of their staff
  • Repayment of the loan will be deferred for four (4) months

SELF-EMPLOYED

A temporary relief program has been implemented by the Government to assist self-employed individuals affected by COVID-19. Normally, self-employed individuals are not eligible to receive unemployment benefits from National Insurance. Under this temporary program, self-employed individuals (upon submitting the relevant application) can receive $200 a week for a period up of to eight (8) weeks.

C. RE-OPENING OF THE ECONOMY

The Prime Minister has issued a “Measured Plan for Re-Opening the Economy”. This plan is comprised of five (5) phases and is set out in the table below.

 

PDF version

For further information on measures implemented by the Government of The Bahamas please contact Lenthera Culmer or McFalloughn Bowleg by email (lculmer@lennoxpaton.com or mbowleg@lennoxpaton.com) or telephone (+1 242 502 5000).

Download our Newsletter here: COVID-19: LXP INSIGHTS


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