With a claim of being the lowest cost call service offering in the Caribbean, the small island nation of Dominica — with just 290 square miles and a population around 72,000 — is hoping to woo U.S. and other foreign clients to its shores.
Nicknamed the Nature Isle, Dominica is best-known for its natural beauty. It is situated in the Lesser Antilles region, near Guadeloupe and Martinique, and tourism has been a growing industry for the island, which previously relied on the growth and export of bananas and other exports. It has been hampered by “poor infrastructure and the absence of a large airport,” however, according to a BBC report.
But the government has worked to improve infrastructure in recent years, and Dominica now offers an advanced telecommunication network with fiber optic coverage. In addition, 35% of electricity is generated through hydroelectricity and geothermal power production is at an advanced stage of development. With these foundations in place, the call center industry believes it has room to grow and a competitive profile that will help quickly build a slate of clients.
Dominica’s Competitive Costs
Dominica’s claim of lowest cost call center option is tempting. Wages start at US$2.23 an hour and rental space per square foot per year can be as low as $9. By comparison SalaryExplorer puts the hourly wage for customer service and call center workers in Jamaica at approximately US$5.10.
In addition to the comparatively low wages, Dominica’s employment taxes are lower than locations in South America, with employers only paying 7% of contribution on wages.
With such costs, the country is hoping its captive employment market will make it an attractive option for clients and vendors to set up shop on the island.
Dominica’s Benefits of Small
Thus far, two contact centers are operating on the island. Both are small and doing specialized work for clients, but one location of a North American company has been running in Dominica for 10 years.
“There are over 700 people employed in the industry in Dominica,” said Theresa Grace Stephen, investment promotion officer at Invest Dominica Authority. “The largest operation was established in Dominica in 2006 and is involved in outbound sales, payments processing, and tier one technical support.”
She says that Dominica has a readily available database of pre-screened potential employees with skill sets that an employer can immediately access. They are English speaking, with a neutral accent, and a 95% literary rate. And as with other nearshore locations, they share a cultural affinity with the United States and Canada and are situated in a time zone that suits North American business.
Dominica Is Safe and Secure
Dominica claims to be the safest location in the Caribbean to live and work, with a murder rate of just under 22 per 100,000 inhabitants — which translates into 15 murders per year among the population of 70,000, according to United Nations statistics from 2010. As in other parts of the Caribbean, foreign visitors and business people are rarely targeted.
Personal safety is not the only issue for companies, however. Data security is vital in a call center operation, and Dominica is still in the process of addressing some aspects of data protection. There is a draft “Data Protection Bill” that will be tabled in parliament soon. To promote the protection of personal data processed by public and private bodies, the act will establish the “office of information commissioner.”
According to Invest Dominica, as part of the continued drive to protect data and related matters, a number of corresponding pieces of legislation have been enacted, including:
- Electronic Filing Act, which enables information and forms to be filed electronically with public authorities.
- Electronic Transaction Act, which aims to facilitate electronic communications and electronic commerce, allowing documents to be e-filed with public authorities. It also seeks to (1) minimize the incidence of forged electronic records, intentional and unintentional alteration of records, and fraud in electronic transactions; and (2) help to establish uniformity of rules, regulations and standards regarding the authentication and integrity of electronic records while also promoting public confidence in the integrity and reliability of electronic records and electronic commerce.
Size Still Matters
While getting in early given the untapped potential in the call center market will yield dividends initially, Dominica’s size also brings obvious disadvantages. There is a lack of ability to scale to needs and a potential skills gaps that may result from increased investment in the call center market. As new players set up shop on Dominica, competition for the limited pool of talent will grow, and costs are likely to increase as a result. The physical size of the island also means access to facilities (office space in places with adequate infrastructure and access to the needed talent) will quickly dwindle.
Invest Dominica is realistic about the skills gap, acknowledging limited availability of highly experienced skilled personnel with specific skills to suit a particular type of industry, but believes that this can be addressed with skilled personnel from the 14 other CARICOM countries that have easy access to Dominica. CARICOM facilitates the free movement of people within their 14 member states.
English language skills are readily available and there is a small active French and Spanish portion that constitutes part of the available work force. A French creole is widely spoken throughout the island and there is a French embassy on the island.
In a bid to draw more investment to the island, Invest Dominica offers a range of incentives to foreign companies. Companies approved to undertake business in Dominica have the option of registering as a local company or an international business.
According to Invest Dominica, as a registered local company, the following incentives, in accordance with legislation may be granted:
- Waiver of payment of income tax on corporate income for up to 20 years
- Waiver of import duty on articles required for construction and operation of the business.
- Exemption from withholding taxes on dividends and interest payments
- Facilitated work permits for management
“It is important to note that Dominica does not have restrictions on repatriation of profits, capital gains tax or estate/death tax,” said Stephen. “Further, there are no taxes levied on world-wide income.”
For those distinguished as International Business Companies (IBCs), on the other hand, a special tax regime was adopted with the International Business Companies Act, 1996. Since the introduction of this act, more than 7,000 IBCs have registered in Dominica.
International companies that choose to base out of Dominica enjoy advantages including tax exemptions, capital and structural flexibility, and member confidentiality.