Nearly 16 years after the Jamaica Stock Exchange (JSE) Junior Market was formed, Finance Minister Fayval Williams has announced that she has accepted the JSE’s proposal to establish a JSE Micro Market.

Minister Williams made the announcement yesterday during her budget speech in Parliament where it was confirmed that this market would facilitate micro, small, and medium enterprises’ (MSMEs’) ability to raise equity capital between $10 million and $50 million. A technical working committee will be formed with representatives from the Ministry of Finance & Public Service, JSE, Companies Office of Jamaica, the legal fraternity, the Securities Dealers’ Association, and the Private Sector Organisation of Jamaica (PSOJ).

“We fully expect that a fully functioning micro market will put structure to more businesses in Jamaica for sustainability and growth and access to equity capital. We will begin these meetings of the technical working committee as soon as we start the new fiscal year,” the finance minister stated in her budget speech.

Minister Williams mentioned that the JSE, through Marlene Street Forrest, the outgoing managing director of the JSE, had identified 250 micro and small businesses that are in need of equity capital funding and were reasonably organised, but were unable to go public on the JSE’s Main and Junior markets as they were not at the level of accounting or reporting requirements to go public. This was also compounded by the issue where many don’t require $50 million in participating equity capital which is the minimum amount that companies on the JSE Junior Market are required to have after listing.

Thus, the JSE Micro Market is a proposed alternative to facilitate the ability for smaller companies to raise equity capital and support their growth initiatives.

“And Madam Speaker, just in case anyone tries to say they were first with this idea of the JSE’s Micro Market, let me remind them that I spoke at the 2025 JSE conference in January, ahead of the Opposition, and publicly stated this Government’s intention to work with the JSE to establish the Micro Market. I am moving now to formalise that process to take the Micro Market to a launch date,” Minister Williams added.

The JSE Junior Market was formed in April 2009 with Access Financial Services Limited becoming the first company to go public on this market that October. This market allowed for companies to raise between $50 million and $500 million in a public market offer like a prospectus issue or an offer for sale and be listed on the JSE. Companies that listed on this market also benefit from a 10-year tax remission where they pay no income tax for the first five years after being listed and pay 50 per cent on the normal rate for the remaining five years. Companies must remain listed on the JSE for 15 years and not be suspended by the JSE in order for the tax authorities to not be able to claw back any of the remitted income tax benefits the companies would have received over the years.

According to data composed by Minister Williams over the last five years, companies listed on the Junior Market paid $1 billion in statutory payments, $1.6 billion in general consumption tax and $1.6 billion in PAYE (pay as you earn) income taxes. The number of new employees resulting 2009-2024 was stated to be 40,511 persons. Also, it was stated that the total capital raised across all the companies and investors between 2009-2024 was $20.2 billion.

As of March 11, 2025, the Junior Market’s market capitalisation was $141.35 billion with the Junior Market Index at 3,560.20 points. A total of 55 companies have listed on the JSE Junior Market since 2009 with six graduating to the Main Market and two delisting from the JSE. However, whereas Sweer River Abattoir & Supplies Company Limited was delisted in February 2020 for numerous rule breaches, tTech delisted on February 28 after the company’s majority shareholders bought more than 80 per cent of the ordinary shares as it sought to take it private. There are currently 47 companies listed on the JSE Junior Market with another one to potentially list in the coming weeks. Atlantic Hardware & Plumbing Company Limited, a company chaired by Paul Barnaby Scott, is currently engaged in its initial public offering (IPO) with the offer set to close tomorrow.

An amendment to adjust the share capital limit for Junior Market Companies from $500 million to $750 million was introduced in parliament in January with the Income Tax Act amendment bill being passed in the lower house. Prime Minister Andrew Holness noted at the JSE’s recent Capital Markets conference that the Senate or Upper House was set to debate the bill on January 24, but there has been no further public information on where that Bill has reached. Some Junior Market companies are currently waiting on that adjustment to list their subsidiaries on the Junior Market.

One additional announcement was the reduction of the withholding tax rates on dividends paid to non-treaty tax resident corporations and individuals from 33 1/3 per cent and 25 per cent, respectively, to 15 per cent. This would effectively equalise the withholding tax rate applied on dividends to 15 per cent which is the same rate applied to individual Jamaican tax residents and corporate Jamaican tax residents. However, the adjustment wouldn’t affect any treaty rates already in place such as with Caricom (Caribbean Community) which results in no withholding tax being applied by resident tax companies in one Caricom territory paying tax residents/companies of another Caricom territory. That means S.B.D. LLC, a Delaware subsidiary owned by Seaboard Corporation, which owns 21 per cent of Kingston Wharves Limited (KW) would have seen its tax rate decrease from 33 1/3 per cent to 15 per cent if KW dividends were still taxed.

“This benefit is one way to say to those Jamaicans who have companies abroad, in jurisdictions with lower dividend tax rates than our 33 1/3 per cent for non-resident companies and 25 per cent for non-resident individuals, we are lowering the rate for you. Bring your capital back to Jamaica,” Fayval stated with fervour.

Despite those wins for domestic and foreign businesses, the local financial sector will have to continue to bear with the 0.25 per cent asset tax for an additional period. The asset tax is an annual tax charged on the taxable assets of a regulated entity which has either the Bank of Jamaica or Financial Services Commission as their primary regulator.

“Madam Speaker, in all our contemplations, we have to engage with the financial sector around the vexed issue of the asset tax which they were told by the other side would be temporary. Some ideas have come to me from the financial sector on how we could begin to scale this back,” Williams stated.

Williams’s announcement on reduction in withholding taxes on dividends come almost two months after Prime Minster Holness mentioned a possible reduction in these rates in his bid to attract capital back to Jamaica. This is part of a greater initiative to modernise the business legislation and regulatory framework to position Jamaica as an international business and financial services hub. The prime minister mentioned Partnership General Act, Partnership Limited Act, Trusts Act Trust and Corporate Services Providers Act and Segregated Accounts Companies Act (SACs) during his speech at the JSE Capital Markets Conference. He noted that the Trusts Act and Trusts and Corporate Service Providers Acts were operational, but amendments were being made to the Partnership Limited Act to comply with FATF (Financial Action Task Force) recommendations. The SAC’s Act was passed in 2024 and is awaiting gazettement. The Limited Liability Company (LLC) Act is the final piece of legislation to be introduced.