How foreign residents buy Jamaican stocks
Oran A. Hall, Contributor
QUESTION: I found an article by you in The Gleaner on how to buy stocks but was wondering whether you know of a way I could buy shares in Proven as a Canadian resident.
PFA: There is little difference between a Jamaican resident and a non-resident buying stock in Jamaica and pretty much the same rules and processes apply regardless of the stock being bought.
A resident of a foreign country who is investing in Jamaican stocks must first open an account with a local stockbrokerage firm. Client opening forms are available online. The form must be printed and sent to the brokerage house with an original signature. A notarised copy of the investor's identification is also required.
Being a Canadian resident, you would also need to present a copy of your Social Insurance Number (SIN) card. Alternatively, you could apply for a Jamaican Taxpayer Registration Number (TRN).
Persons investing in Government of Jamaica securities must have a TRN. A Social Security Number is not acceptable for such transactions.
Whereas Jamaican residents will now pay a five per cent rate of tax on dividends earned from listed companies - up from zero as of Friday, June 1 - you should note that residents of foreign countries are treated differently. The rate they pay is that specified in the tax treaty between Jamaica and their country of residence.
Proven Investments Limited has both ordinary shares and preference shares listed on the Jamaica Stock Exchange. The preference shares are five-year instruments denominated in Jamaican dollars and will mature at a price of J$5. The ordinary shares are denominated and trade in US dollars.
You and residents of other countries may invest in these securities as long as you have satisfied all requirements for opening an account with a brokerage firm.
As a matter of interest, there is only one company listed on the Jamaica Stock Exchange which restricts ownership of its stock to Jamaican residents, but with two exceptions. That company is Jamaica Producers Group, which used to be known as the Jamaica Producers Growers Association (JPGA).
The JPGA was incorporated by an act of Parliament which restricted ownership of shares in that company to Jamaican residents, thus ensuring that no overseas interest gained control of the company. Beyond that restriction, no single shareholder or a shareholder and connected party is allowed to own more than 10 per cent of the issued share capital of the company. The only persons residing abroad who may own shares in Jamaica Producers Group are employees of the company or individuals who became shareholders as the beneficiaries of a will.
I hope all goes well with you in your in-vestment programme.
Oran A. Hall, a member of the Caribbean Financial Planning Association and principal author of 'The Handbook of Personal Financial Planning', offers free counsel and advice on personal financial email@example.com