CNMI seeing a surprising surge in entrepreneurship in Covid economy
By Bryan Manabat
Saipan—The Covid-19 pandemic forced some companies to close shop and bear the supply-chain crisis compounded by inflation. But data from the CNMI Division of Tax and Revenue’s Business License Office indicated that the financial squeeze did not leave tons of business carcasses.
Business license renewals and new business license applications showed evidence of confidence in the local market. Data indicated a rise in entrepreneurship.
This year, sole proprietorship tops business license applications from January to June, which showed a total of 343 new business license issuances.
The business licensing office also processed 1,959 renewals from Saipan, Tinian, and Rota. Of 343 applications, 191 are sole proprietorships that provide among others personal or professional services, online commerce and housing rentals.
In 2021, the business license office issued 695 new business licenses and renewed 3,296 from January to December. Of 695 new business licenses issued, 430 are sole proprietorships.
The annual average of new business license issuances was consistent with data from the last decade, which showed an annual average of 625.5 new licenses from 2010 to 2019.
On Aug. 10, the Governor’s Council of Economic Advisers, the CNMI Small Business Development Center Network and the Saipan Chamber of Commerce hosted business owners and managers from 60 local businesses at the Marianas Business Pride 2022 Friends of Business Summit held at the Saipan World Resort.
On Aug. 18, the CNMI government opened the application for financial assistance through the Building Optimism Opportunities and Stability Together or BOOST grant, which is available to CNMI businesses and non-profit organizations.
Funded through the American Rescue Plan Act, BOOST was launched by the Office of the Governor and the Department of Commerce. The program aims to support the viability of businesses and the employment opportunities they offer CNMI residents.
Finance Secretary David Atalig announced the launch of BOOST grant at the Marianas Business Pride Friends of Business Summit.
Administered by the Bank of Saipan, BOOST is designed to diversify the CNMI’s economy and raise the commonwealth’s tax revenue.
The funds can be used for new businesses, existing businesses and new industry diversification grants. New businesses can use the funds for working capital, furniture, fixtures, equipment, inventory, architecture and engineering, environmental impact assessments, regulatory permits and operational costs.
Through the BOOST program, new businesses will also be counseled by the Small Business Development Center and other qualified consultants. For existing businesses, the program will support expansion.
The new industry diversification grants are for research and development, feasibility studies, equipment and start-up costs. To be eligible, applicants must be registered businesses or nonprofit organizations in the CNMI with a valid business license, tax clearance, and certificate of good standing. The applicant must have less than 250 employees and generate no more than $10 million in average annual receipts.
Gaming and casinos, adult entertainment establishments and businesses with 50 percent gross income derived from marijuana are not eligible for the BOOST grants.
But despite confidence in the market, the local business sector continues to be nagged by the perennial labor shortage, which was raised by the Saipan Chamber of Commerce at the business summit.
Joe Guerrero, chamber president, clarified that the business group is not necessarily lobbying for foreign workers, but for access to the workforce.
In March, the U.S. Citizenship and Immigration Services announced it has received enough petitions to meet the congressionally mandated H-2B cap for the second half of fiscal 2022.
Under the Immigration and Nationality Act, Congress has set the H-2B cap at 66,000 per fiscal year, with 33,000 for workers who begin employment in the first half of the fiscal year and 33,000 for workers who begin employment in the second half of the fiscal year.
The CNMI has been dependent on foreign workers to fill up local jobs.
Guerrero said because of its small population, the CNMI will continue to rely, “in some form or fashion,” on foreign workforce.”
The chamber, he added, will continue to support any program that helps U.S. qualified workforce and businesses.
“In an ideal world, we would want all workers to be U.S. qualified workers,” Guerrero said. “Again, it’s a tough situation that we’re in, but we’re not alone; we’re not the only jurisdiction in the world that relies on other people’s workforce. We are a global community.”