From Site Selection magazine, July 2015
Will changes to SEZ rules hurt Jamaica’s growing BPO sector?
by MARK AREND
Jamaica’s BPO sector is on the ascent: It’s moving up the value chain from its traditional strengths – call centers, data entry, collections and tech support, for example – to higher-end services, such as software development, graphic design and business and financial analytics. It’s already happening.
Marketing materials giant Vistaprint built a $23-million, 92,000-sq.-ft. (8,500-sq.-m.) facility in 2012 to accommodate its growth from 20 agents to more than 720, and 175 management personnel. Services provided include customer care, sales, technical support and graphic design. Xerox employs thousands at its facilities in Kingston and in the Barnett Tech Park in Montego Bay, where it occupied new space in May. Xerox handles transaction processing, call center services, student and auto loan processing, finance and accounting and administrative services at its Jamaica facilities. Advanced Call Centre Technologies also opened a facility at Barnett Tech Park in May, where it was planning an additional 550 employees by the end of June.
“It is noteworthy that these two companies have decided to grow their operations here,” noted Hon. Anthony Hylton, Minister of Industry, Investment and Commerce, at the May 6th opening. “This is a demonstration and reaffirmation of their positive experience of doing business in Jamaica. I’m certain that our continued commitment to the industry and improved business environment were contributing factors in these decisions,” he said. The Government has given national priority to the development of the outsourcing industry, as stated in the country’s Vision 2030 document, the Minister pointed out. “One of the goals of Vision 2030 is ‘transforming Jamaica into a regional hub for ICT investments.'”
Tax Holiday To Be Curtailed?
The fly in the ointment is whether BPO companies operating in special economic zones will continue to enjoy SEZ tax exemption and other benefits into the future. The Government of Jamaica is contemplating changes to the SEZ policy regime as it seeks to position the country as a global logistics hub once widening of the Panama Canal is complete.
“Investors are concerned that the current incentives, such as income tax holidays in perpetuity, zero-rated value-added tax, and other benefits, will be done away with under the new SEZ regime,” says Yoni Epstein, CEO of itel-BPO Solutions, Montego Bay, a regional provider of contact center management and back-office services. Epstein also is on the Board of the Business Process Industry Association of Jamaica (BPIAJ). “Most territories have various incentive programs to encourage foreign companies to establish their businesses; a major concern of potential and existing investors is the uncertainty with the changes and whether or not Jamaica will be competitive regionally and globally.”
Jamaica’s BPO employee base today is about 17,000, but that figure is likely to grow to 32,000 by 2020 and as high as 55,000 by 2030. The sector is considered a priority by the government and “critical to its growth and development,” says Epstein. As such, it makes several resources available to sector participants, including:
Room for Improvement
But several areas require additional support, says Epstein, including:
BPIAJ has implemented several initiatives geared towards building a network for BPO operators to interact, share best practices and address issues.
“The most significant achievement is the development of a 200-seat Contact Center Incubator designed to provide a plug-and-play facility for investors seeking to establish operations in Jamaica or existing firms wishing to expand,” notes Epstein.
Published Date: July 20th, 2015
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