Benefits of Making It Official: Why Register Your Business?
Becoming Official Protects Your Brand
Incorporation is the first step in protecting your brand. Similarities in logos and business names can confuse customers. Competitors can use that confusion to their advantage. Once you make it official and register your brand, you have legal options to discourage these business practices. Additionally, becoming official can help you from inadvertently making the same mistake of naming your business something too close to a competitor, avoiding mix-ups and/or lawsuits later one.
Becoming Official May Protect You Personally
When your company acquires the status as a legal entity, the company can now execute contracts as well as obtain financing. In some instances, becoming official means the company’s assets are now separate from the owner’s personal assets. Which can be beneficial in good times and in bad.
Becoming Official Means Special Grants
- DBJ Serve Jamaica Program: Under the SERVE Jamaica Programme, MSMEs that qualify for the Development Bank of Jamaica’s Go-Digital Grant of $200,000 will now be eligible for up to $800,000 in two per cent interest loans to be used to enhance their digital capabilities.
- DBJ Vouchers for Technical Assistance – DBJVoucher.com: $50k-$200K grants. Where there are gaps in the management capacity of the business, DBJ will provide a grant to procure business support services to remedy these deficiencies. It may be a case that there is no (or inadequately prepared) business plan, marketing plan, or financial statement, or the principals/management team will require training in financial literacy, business coaching and or mentoring. This grant is accessible from the DBJ and executed by approved business development organisations.
Becoming Official Requires a Little Math
Officially registering your business will require a declaration of income earned on an annual basis. This accounting is helpful not just for declarations but to help you track the performance of your business, is essential for growth and is often required by banks, grants, and some institutional customers.
Becoming Official Expands Opportunities for Growth
Making it official and registering your business is the first step in securing business with overseas suppliers, creditors, and many customers.
Becoming Official Makes It Simpler to Track and Protect IP
Owning and registering an IP is relatively easy for a registered company. Your company is now afforded legal protections for trademarks, patents, or copyright once these are registered with JIPO. Once a trademark is registered, there are legal ramifications for unfair competitors who infringe on this trademark. These can now be treated as an intangible asset on your company’s balance sheet and can be used as collateral for loans or other debt instruments.
Becoming Official Means Tax Compliance.
Applying for and winning any government contract will require proof of tax compliance. Being an officially registered entity allows for this to be determined easily. Tax Compliant companies are issued with a Tax Compliance Certificate(TCC) annually for use in the business sector. Your company, being tax compliant, will now find it easier to raise additional capital or debt from either financial institutions and/or investors.
Becoming Official Comes with Tax Incentives: Fiscal Budget
Make it official and find out the tax incentives available for companies. Tax incentives are available to registered companies based on location, size of business or within a particular sector or meeting a required threshold. Under the 2021/2022 Budget, Companies earning less than $500M qualify for a non-refundable income tax credit of $375,000.00. Companies are classified as MSME’s will benefit from this tax credit following the passage of the Income Tax (Amendment) Act, 2020.
Becoming Official Comes with Tax Incentives: Urban Renewal Act
Your registered company can benefit from Tax Incentives under the Urban Renewal Act for improvement or renovation work done on property in designated areas called Special Development Areas. These incentives are available
- Urban renewal bonds
- 33.3 per cent investment Tax Credit
- Tax free rental income
- Exemption from stamp duty and transfer tax on the “improved” property
Becoming Official Comes with Tax Incentives: Charitable Organisations
The Charities Act provides a mechanism for registered charitable organisations to obtain exemption from income tax, customs duty, GCT, property tax, stamp duty, and transfer tax.
Becoming Official Comes with Tax Incentives: Listing on the Junior Stock Market
Companies that list on the Junior Market will receive a full Income Tax holiday for the first five (5) years after listing and a 50 Income Tax holiday in year 6 – 10 . The Income Tax is ordinarily taxed at a rate of 33.3 per cent for regulated entities and 25 per cent for unregulated entities.
Becoming Official Comes with Tax Incentives: GCT Registration
The General Consumption Tax (GCT) is a Value Added Tax on consumption and is added to the price of goods and services. The standard rate of GCT (on most items) in Jamaica is 15 percent, with certain notable exceptions like basic food items. Upon registration for GCT at Companies Office of Jamaica or Tax Administration Jamaica, your company can charge and collect GCT on goods or services provided to the public. This Tax is paid over on a monthly basis to TAJ. Your company can reduce this amount by deducting any GCT incurred(Input Tax) in producing those goods or services. Registered companies thus qualify for a GCT Tax Credit on inputs on goods &/or services which are inputs for producing a saleable item in Jamaica . Also being a registered taxpayer, you can issue Tax invoices especially to business who are in a position to benefit from this input tax credit. Companies must however attain the annual turnover (Sales) GCT registration threshold which is currently JMD 10 million in order to benefit. For more info: Click Here
Becoming Official Comes with Tax Incentives: Here are a Few More
