Paradise Found Project Bill 2015

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2015

ANTIGUA AND BARBUDA

ANTIGUA AND BARBUDA

PARADISE FOUND (PROJECT) BILL

NO. OF 2015

Paradise Found Project Bill

NO. OF 2015

NO. OF 2015 Paradise Found Project Bill

ARRANGEMENT OF CLAUSES

1 Short title and commencement

2 Interpretation

3 Grant of leases

4 Non-Application of section 6 of Act No. 23 of 2007

5 Non-Application of section 17 of Act No. 23 of 2007

6 Non-Application of section 19 of Act No. 23 of 2007

7 Registration of lease

8 Obligation of Paradise Found

9 Government Permission

10 CIP approval Project

11 Exemption from personal income tax on employment income

12 Exemption from import duty, revenue recovery charge and ABST

13 Foreign employees exempt from import duties

14 Other import duties exemption

15 Exemption from taxes

16 Withholding tax exemption

17 Dividends exempt from tax

18 Stamp duty waived

19 Property tax

20 Undeveloped land tax

21 Exemption from planning fees

22 Work permit fees capped

23 Exemption from section 32 of the Licensing (Intoxicating Liquor) Act, Cap. 249

24 Reconciliation with other laws

Schedule 1

Schedule 2

Paradise Found Project Bill

NO. OF 2015

ANTIGUA AND BARBUDA

PARADISE FOUND PROJECT BILL.

NO. OF 2015

AN ACT to provide for the approval of specified terms of an Agreement dated 3rd

November 2014 between the Government of Antigua and Barbuda and Paradise Found

LLC for a tourism development Project in Barbuda.

ENACTED by the Parliament of Antigua and Barbuda as follows-

1. Short title and Commencement

This Act may be cited as the Paradise Found Project Act, 2015, and comes into operation

on the day appointed by the Minister by notice published in the Gazette.

2. Interpretation

In this Act –

“ABST”has the same meaning as the meaning assigned to it in the Antigua and

Barbuda Sales Tax Act 2006, No. 5 of 2006;

“Leased Land” means those parcels of land situate in Barbuda leased to Paradise

Found LLC or its subsidiaries or affiliates for the Project more particularly described

in Schedule 1 and includes all lands in Barbuda that may be leased to Paradise Found

in the future for purposes of the Project

“Minister” means the Minister responsible for finance;

“Paradise Found” means Paradise Found LLC and any subsidiary or affiliate of that

corporation;

“the Project” means the tourism and real estate development in on Barbuda by

Paradise Found LLC on lands of the former K Club together with certain lands

leased from the Crown pursuant to an agreement between the Government of

Antigua and Barbuda and Paradise Found LLC dated 3rd November, 2014.

NO. OF 2015 Paradise Found Project Bill

“the Resort” means the hotel resort to be built by Paradise Found as part of the

Project.

3. Grant of leases

(1) Notwithstanding the provisions of the Barbuda Land Act, 2007, No 23 of 2007 or

any other law to the contrary, the Government leases to Paradise Found the Leased Land

on the terms set out in Schedule 2.

(2) The Rent shall be prepayment and discharge of all Lessee’s financial obligations

under the Lease, including rental for the first 99 years of the term.

(3) The provisions of the Barbuda Land Act, 2007 does not apply to the lease of the

Leased Land pursuant to this Act.

4. Non-application of section 6 of Act No 23 of 2007

Section 6 of the Barbuda Land Act, 2007 (which provides that the Barbuda Council may

grant leases with the approval and on the advice of the Cabinet and the consent of a

majority of the people of Barbuda) does not apply to the lease of the Leased Land

pursuant to this Act; nor does the restriction of the term of the lease apply.

5. Non-application of section 17 of Act No 23 of 2007

Section 17 of the Barbuda Land Act, 2007 shall not apply to the lease of the Leased Land

by virtue of this Act; consequentially the procedure set out in that section is not

applicable to the grant of the lease of the Leased Land under this Act.

6. Non-application of section 19 of Act No 23 of 2007

Section 19 of the Barbuda Land Act, 2007 (time limits on development) shall not apply to

the grant of lease of the Leased Land under this Act.

7. Registration of Leases

Notwithstanding the Barbuda land Act, 2007, the lease of the Leased Land and subleases

therefrom shall be registered as deeds under the Registration and Records Act [Cap 375]

and no further filing or registration is necessary.

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8. Obligations of the Paradise Found

In developing the Leased Land, Paradise Found shall -

(a) commission an Environmental Impact Assessment (EIA) study to be

undertaken for the Project and to make the EIA available to the

Government;

(b) construct and maintain a new public facility of sheltered buildings,

bathrooms, changing areas and car parking on a beach front site in the

proximity of and just north west of ‘Uncle Roddy’s”) (“the Beach

Facilities”)This beach with public access and Beach Facilities will be

named the Princess Dianna Beach;

the Property and Coco Point. The car park and public access is not to be

used for commercial purposes and particularly is not to be used for cruise

ship visitors; and

(d) maintain and illuminate all public access roads in the vicinity of the Resort

9. Government Permissions

(1) Paradise Found is permitted –

(a) to operate a desalination or similar plant and equipment to produce potable

water and irrigation water for its own use and for sale to the public at

reasonable price;

(b) to drill for and use water located on or under the Property;

electricity ;

(d) to install renewable energy plants for the sole purpose of the Project;

(e) to install and operate a sewage treatment plant , waste management plant, re-

usable grey water or similar plant and equipment for the disposal or

reprocessing of effluent for the sole purpose of the Project;

(f) to install and operate a television service for the sole purpose of the Project;

(g) to operate an internet service including connecting to fiber optic or

microwave services for the sole purpose of the Project;

(h) to import and store oil, petro and gas for the sole purpose of the Project;

(i) to operate a garbage disposal, waste management and recycling facility for

the sole purpose of the Project;

(j) to re-route the existing boundary road to the external perimeter of the

Property at its own cost;

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(2) Subject to Development Control Authority approval, Paradise Found is

permitted –

(a) to build a main jetty or dock from the beach in front of the Resort for the sole

use of the Resort and its guests and owners;

(b) to build small private individual docks in front of the villa sites;

the Resort for large and super yachts for the sole and exclusive use by the

Resort;

(d) to construct buildings along the current setbacks already established by the

K Club or closer to the sea, if permitted by the applicable building code ;

(e) to build and maintain a helipad at the Resort, which in the event of an

emergency on Barbuda will be available to assist.

(3). Paradise Found is granted a waiver of the following -

(a) Non-citizens landholding licence to hold the Leased Land;

(b) Vendor’s and purchaser’s stamp duty payable on land transfer to subsequent

first sale only of properties/subleases to first time buyers;

citizen Land Holding Regulation Act Cap. 293 on purchase of properties

(leases/subleases by first time buyers of leases/properties within the Resort;

(d) licence to operate a casino on the Resort, subject to the betting and Gaming

Act Cap. 47.

10. CIP approval of the Project

The Project is confirmed as eligible for benefits under the Antigua and Barbuda

Citizenship by Investment Act, 2013.

11. Exemption from personal income tax on employment income.

(1) All persons employed on the Project, including foreign contractors and

consultants, are exempt from personal income tax on their employment income for fifteen

years from the commencement of this Act.

(2) Foreign Contractors and consultants working on the Project are exempt from

withholding or other taxes from income so derived.

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12. Exemption from import duty, revenue recovery charge and ABST.

(1) Paradise Found shall be entitled to import building materials, furniture, fixtures,

fittings, furnishings, appliances, machinery, equipment, fittings, motor vehicles, boats,

aircraft, furniture, office equipment, and any other mechanical, landscaping or

construction material for the project, free from duty, revenue recovery charge, ABST or

surcharges of any kind, but not including handling charges.

(2) Paradise Found shall not –

(a) sell or dispose of any material which has been imported free of customs

duties, taxes surcharges or other impost; or

(b) use such items for the purpose other than in connection with an operation

authorized by the Agreement, without the prior approval of the Government

and the payment of the appropriate customs duties and other charges

imposed by law.

(3) Where Paradise Found disposes of or uses any material brought into Antigua and

Barbuda in contravention of subsection (2), Paradise Found shall pay to the Government

any customs duties consumption taxes, customs service and surcharges which would have

been payable on such material if it had been imported in the condition in which it was at

the time of such improper disposition or use.

13. Foreign employees exempt from import duties

The employees of the Paradise Found who are required to move to Antigua and Barbuda

to take up positions within the Project are exempted from the payment of import duties,

taxes or levies for their personal belongings and household items.

14. Other import duties exemption

(1) Paradise Found shall be exempt from payment of import duties, revenue recovery

charge and ABST on the following items related to the Project –

(a) all food and beverage where such commodities are imported directly for the

Resort;

(b) fuel to run the generators until such time as Antigua Public Utilities

Authority can provide electricity at comparable prices to that being

generated by Paradise;

(d) two hundred golf carts or similar vehicles, twenty motor vehicles, two

aircrafts, two helicopters and two boats related to the project.

NO. OF 2015 Paradise Found Project Bill

(2) Paradise Found shall be exempt from all port fees at the Barbuda dock for all

imports into Barbuda.

15. Exemption from Taxes

Paradise Found shall for 25 years from the commencement of this Act be exempt from

corporate income tax on its income or profits and shall be able to carry forward losses for

7 years for each tax year.

16. Withholding tax exemption

Paradise Found is exempt from withholding tax on remittance of interest paid or accrued

by Paradise Found on any debt for the Project, for 25 years from the commencement of

this Act.

17. Dividends exempt from tax

(1) Any income of Paradise Found derived from operation of Paradise Found and

distributed as dividends to its shareholders shall be exempt from income tax payable by

such shareholders of the Paradise Found out of the capital of the Paradise Found, its

earnings or its retained earnings.

(2) Where otherwise applicable on repatriation of profits, dividends and capital, and

on payment of royalties, technical and management fees, interest, rentals or amenities,

Paradise Found shall be entitled to free repatriation thereof and is exempted from any

withholding tax and any other taxes in connection therewith.

18. Stamp Duty waived

Stamp duty is waived on

(a) all conveyances of interests in land between Paradise Found and any of its

subsidiaries, joint venture partners and shareholders on all conveyances

between them where such conveyances are in connection with the Resort.;

(b) the acquisition of any interest in any further lands by Paradise Found related

to the Project;

(d) Non-citizens Landholding licence on any lease acquired in Barbuda by

Paradise Found or its affiliates;

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19. Property Tax

Property tax shall be waived on all property in the Project for 25 years from the

commencement of this Act.

20. Undeveloped Land Tax

The provisions of the Non-Citizens Undeveloped Land Tax shall not be applicable to

Paradise Found Project.

21. Exemption from planning fees.

Paradise Found is exempt from the payment of planning fees that may be prescribed

under the provisions of any law or regulation in force.

22. Work permit fees capped.

Work permit fees for employees of the Project shall be capped at a maximum of

US$1,500 per employee per annum for a period of fifteen years after the commencement

of this Act.

23. Exemption from section. 32 of the Licensing (Intoxicating Liquor) Act, Cap. 249

Paradise Found is exempted from the provisions of section 32 of the Licensing

(Intoxicating Liquor) Act Cap 249.

24. Reconciliation with other laws.

(1) Except as otherwise provided in this Act, no other law and no practice or

procedure relating to taxes, stamp duty or other imposts shall apply to the Project so far

as it is inconsistent with this Act.

(2) Notwithstanding subsection(1), the provisions of the Tourism and Business

(Special Incentives) Act 2013 shall apply to the project where those provisions offer

better incentives than those provided for in this Act.

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Schedule 1

All those parcels of land consisting of the former lands held by Dream Company Limited

(K Club), being 251 acres, and the lease of lands adjacent thereto, being Crown lease of

140 acres, and any lands leased in Barbuda by Paradise Found in the future for the

Project.

Schedule 2

Terms of Lease of Demised Property

1.Parties- His Excellency Sir Rodney Williams, Governor General of Antigua and

Barbuda on behalf of the Government of Antigua and Barbuda and

Paradise Found LLC, its subsidiaries and affiliates.

2. Term 99 years with an option for a further 50 years exercisable on

completion of the Resort

3. Rent - The sum of US$5.2 million to the Government of Antigua and Barbuda

on signing of the Lease and a further US$1 million in respect of the

Option years.

4. Option - an option for a further 50 years exercisable on completion of the

Resort.

5. Performance- The Crown lease of 140 acres will revert to the Crown if construction

of the Resort is not started within 60 months from the beginning of the

lease term.

Passed by the House of Representatives

on the day of 2015.

Passed by the Senate on the day of

2015.

Speaker of the

House of Representatives

Clerk to the House of Representative

President of the Senate

Clerk to the Senate

Paradise Found Project Bill

NO. OF 2015

EXPLANATORY MEMORANDUM

This Bill seeks to provide for Parliamentary approval of certain terms of an Agreement

dated 3rd November 2014 between the Government of Antigua and Barbuda and Paradise

Found LLC in relation to a very large tourism development project in Barbuda. The

project is being undertaken by two well-known investors, American movie icon, Robert

De Niro and Australian billionaire, James Packer.

2. The Government considered this Bill necessary as efforts to implement the project

have been stymied by maneuverings of persons in Barbuda. These persons have held up

the project by taking the Barbuda Council to Court on a technicality involving the voting

procedure under the Barbuda Land Act, 2007. Although the detractors lost the case at

first instance they have appealed and therefore have caused a further delay to the

commencement of a project that the Government considers key to the development of

Antigua and Barbuda.

3. The application of the Barbuda Land Act, 2007 (BLA) has proved not to be investor-

friendly. Some of the provisions of the BLA are considered to be of doubtful

constitutional validity: for instance the attempt to bind a future parliament in section 31

(2). This Bill therefore provides that specified provisions of the

BLA are not applicable to the lease of land in Barbuda to Paradise Found. It also

provides that the Paradise Found Project Act, 2015 will supersede any other law

(including the BLA) where there might be a conflict of laws.

4. The Bill also covers the gamut of the usual tax incentives granted by Government to

investors in order to stimulate the development of the tourism sector, particularly in

Barbuda. For instance, it covers a tax holiday of 25 years in the case on corporate

income tax; and taxes (stamp duty) on conveyance of interests in land are waived for the

Investor Company and first time investors into the Project. Personal income tax is

waived for all persons employed on the Project for 15 years (where applicable).

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5. The Bill also seeks to reconcile its provisions with other pieces of legislation that

cover taxes and waiver of taxes, particularly the Tourism and Business (Special

Incentives) Act, 2013 (Act No 22 of 2013). Provision is made for the special incentives

provided for in the Tourism and Business (Special Incentives) Act, 2013 to apply to the

Project where those incentives are better than those provided for in this Bill.

Dated the day of 2015

…………………………….

Hon. Gaston Browne

Prime Minister and Minister of Finance