Business should be Bermuda’s business
An open letter to the Premier. I was among the many hundreds of Bermuda’s younger generation to listen intently to your question-and-answer session last night to address the youth in Bermuda about the path forward for our country.
I must say I thought you presented very well and I was honestly impressed with your thoughts on business and growing Bermuda’s economy. I truly hope those thoughts come to fruition and Bermuda’s economy, population base and opportunities for Bermudians to advance themselves grow.
You did ask for feedback and commentary, so I thought it best to write one to you. One area that I have witnessed first-hand, and now in my fourth year back to Bermuda, has been how difficult it is for new businesses to start on the island.
While my own company is struggling through its challenges, processes which no one would say ever move quickly, I would speak on other matters that I can more easily compare and contrast.
I had the fortune to operate a business in the United States for most of my adult life, as my primary job was working in information technology — not too different from your career. I was a consultant for many large Fortune 500 companies, helping them to implement their solutions throughout the US. As a business owner, I had many challenges, as I’m sure you can relate to.
Being an entrepreneur/business owner is very tough. Your friends and family think you’re crazy. Maybe you have an amazing idea, you still struggle with raising capital, you have to find great people to help you — no small challenge — keeping payroll, finding customers, keeping your existing customers happy, following regulations, banking, taxes, balancing personal and work ... the list goes on.
I sometimes envy those who have a 40-hour work week, punch a clock and go home — not likely in today’s world. Those who have the drive to own and operate their own businesses know that 40 hours is just the first half of the week.
However, what I have faced in Bermuda is almost beyond comparison. To say opening up a business in Bermuda is tough would be a dramatic understatement.
First and foremost, as the son of a Bermudian whose family heritage goes back hundreds and hundreds of years, perhaps to the founding of the country, it took me years to go through the immigration process to be finally granted status. If it is so difficult for someone with such an easy case to prove that they are a Bermudian, I can’t imagine what other people are going through on a daily basis. People and companies wait many, many months for a work permit, for another example. Their waiting means we are waiting for them to contribute to Bermuda.
I do want to touch on the myth that companies want to hire only expatriates; it couldn’t be farther from the truth. Companies want to be efficient, be good corporate citizens and improve their operations. The cost — travel, fees — waiting period, inability to know if that new hire will fit into Bermuda and stay for the long term all make businesses bend over backwards looking for local Bermudians who want to work for their company.
Speaking on business, I would say that many of the business processes are set up here for international business — a reason they are so lengthy — but frankly I can only imagine how frustrating their lives must be, especially when they operate in potentially dozens of other countries. We need to be more competitive, faster and efficient.
It took me literally, without any slight hesitation, more than four months to open a bank account here. I told the story to friends many times and only those in Bermuda said that it’s par for the course. In the United States, I could walk into any bank and have an account open within an hour, leaving with credit cards and cheques in hand. Did I not mention that it took weeks later to get my bank card? In fact, I opened an account with a bank that is strictly only internet-based — as in it has no physical tellers — and I was fully verified and ready to go in an hour. I had a new bank card in less than a week.
For new businesses, there are tons of regulatory issues that they must navigate, and while hiring legal assistance in Bermuda is extremely expensive, it’s absolutely necessary and I’m glad for the help I have had. For new and/or small companies, you could end up getting drowned in red tape before you are able to start business. To that end, even starting a company here took many months. I remember starting my first company in New York. I submitted a fee of a few hundred dollars and walked out with my corporation paperwork in, I believe, two days. In Bermuda, that is a few thousand dollars and many weeks, if not months, to get accomplished.
Capital access is a giant problem. It’s estimated that a CEO of a new company spends more than 50 per cent of their time raising capital for their company. I can attest that is true. I know that there are many attempts to work on investment for Bermuda and its businesses; it’s not an easy egg to crack.
We are a small country with a small population, but between the Bermuda Economic Development Corporation, new entrepreneur programmes and the success of the non-profit Ignite Entrepreneur programme, I see great strides. We can do more, we should do more to find working capital for businesses in Bermuda, but there is progress being made.
There is a better way and we should move faster in all facets of helping companies to get started in Bermuda, to remove red tape whenever possible. How can we expect businesses to start, flourish or operate in Bermuda with these and so many other hurdles?
I am, however, not one to complain without offering solutions.
The attempt to spur banking competition here locally was a great move that I hope is pressing forward. I also know from your speech last evening that the Government is working on attracting new business to Bermuda’s shores. Our country runs and has grown to such a great scale from our innovative philosophy and attracting business to Bermuda. We must continue that thinking.
International business provides tremendous opportunity to our local citizens to have jobs in these industries. I’m sure there are those who would argue that there always could be better and more opportunities, but I am grateful this industry exists and I am hopeful that it expands.
It is also important we look to attract other industries to Bermuda such as fintech. You would perhaps recognise I’ve been a big supporter of the fintech and cryptocurrency industry, which I would love to see grow and expand in Bermuda. Technology, in general, from 3D printing, programming, information technology, etc, are the way of the future. In fact, they are the way of the now.
Some easy things that the Government can do, outside of making the above processes much faster, is to think a bit outside of the box. We could, for instance, jump-start more companies moving to the island when we realise the Government has many hundreds of thousands of square feet of real estate that it is not using throughout the City of Hamilton and throughout Bermuda.
This space should be given away for a five to ten-year lease to any new company meeting minimal criteria of hiring people and showing a long-term investment in Bermuda. Also, the same companies should be given a full reprieve from payroll tax for the same amount of time. That saves the employee and company up to 15 per cent a year on costs in a critical time for the company.
It’s a not well-kept secret that people living in Bermuda spend a significant portion of their income in our local economy. Whether you are from Bermuda or you are living and working here from overseas, the investment is quite significant. I would imagine at minimum $30,000 to $50,000 a year on average.
In closing, Mr Premier, I am one of the Bermudians who, while concerned, knows that with a strong effort and caring people such as yourself, Bermuda’s best days are not behind her.
Any government that reduces costs, speeds up time to get operational and helps to incubate businesses will always find there are opportunities to grow its economy and the wealth of its people.
Competition in all sectors is vital to a functioning economy. If you want to drive down the price of any good or service while increasing the quality, spur competition — in telecommunications (my sector), energy, food, healthcare ... the list is endless. The Bermuda Government can be the safe, well-nurtured garden for our economy to flourish.
Encourage competition, encourage growth, encourage entrepreneurs, encourage the big multinational and the small street vendor. Find new ways of doing — not just thinking — and watch the troubles of today’s Bermuda become yesterday’s.
Thank you for your time.
•Gilbert “Artie” Darrell is a technology entrepreneur and a certified New York State fire instructor
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