Govt mulls adding residency requirement for Local Content certification

…Local Content Secretariat says “spirit & letter” of Act must be followed

With the Local Content Act of 2021 under review, one of the changes being considered by the Government of Guyana is to add residency as a requirement for companies operating in the oil and gas sector to be considered Guyanese-owned.
This revelation was made by Local Content Secretariat Legal Officer Michael Munroe, during his presentation at the opening of the 2025 Local Content Summit on Tuesday, when Munroe also highlighted the lengths to which persons are going to front for foreign-owned companies.

“The issue of who is a Guyanese and who is a Guyanese company… As you know, the definition as it stands right now, the company has to be beneficially owned, 51 per cent, by a Guyanese or Guyanese nationals. And there are also different percentages as it relates to the structural management of the company.
“And of course, our experience has disclosed that there are companies or persons who are engaged in the practice of renting or leveraging their Guyanese nationality as a means to allow foreigners, who should be the minority shareholders in this arrangement, to, more or less, beneficially own the company,” Munroe said.
He pointed out that the Government wanted to ensure that persons follow the Local Content Act, in both the letter and spirit. He also noted that there were Guyanese engaged in fronting, with them using their Guyanese nationality to pose as the face of companies, while the real beneficial owners profited.
“We are looking closely at this definition. And we’re looking at ways in which we can add more conditionalities as to who is a Guyanese company. And I say this to say: we’re exploring, for example, if residency should be an option. So, yes, you’re Guyanese; yes, you perhaps live abroad, and you want to play a part in this. And that might be the case.
“We’re exploring, should there be a residency requirement? Should the Guyanese be a participating taxpayer? So, these are some of the areas we’re looking at. Because we want to ensure that the true spirit and intent of the (Local Content) Act is achieved,” Munroe added.
The Local Content Act outlines 40 different service areas that oil and gas companies and their subcontractors must procure from Guyanese and Guyanese-owned companies.
To qualify, however, there are some companies that have been using Guyanese nationals as a front for their business, prompting the Government to clamp down on this practice.
The Act defines beneficial ownership as owning 51 per cent of the company. Also, a local company is expected to have Guyanese in at least 75 per cent of executive and senior management positions, and at least 90 per cent in non-managerial and other positions.
Local content certificates are also issued to companies after a thorough review, in order to strengthen the system and certify that the companies are, indeed, Guyanese.
Government has already identified some ‘grey areas’, since the local content framework was created, and they are on the cards to be strengthened.
Fronting – a practice also called ‘rent-a-citizen’ – is a major issue, whereby foreign companies employ Guyanese and/or Guyanese businesses in order to bypass the provisions of the Local Content Act, including the stipulation that only companies that are 51 per cent owned by a Guyanese can benefit from the 40 carved-out service areas.
The Local Content Act mandates penalties such as fines ranging from $5 million to $50 million for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act.