The Guyana government is weighing legislative updates to its landmark Local Content Act, including a potentially stricter definition of a “Guyanese company.” This move follows growing concerns about firms exploiting loopholes in the current law to appear compliant on paper while failing to deliver the intended benefits to local businesses and citizens.
Under the existing law, passed in 2021, a company must be at least 51% beneficially owned by Guyanese nationals and have a substantial number of Guyanese in its management structure to be certified as a “Guyanese company” by the Local Content Secretariat. This certification is critical, as it entitles companies to preferential treatment in acquiring contracts in the oil and gas sector.
However, as the law stands, there are signs that shady practices are diluting its intended impact. “One of the critical areas that we have been looking at with considerable thought is the issue of who is a Guyanese… and who is a Guyanese company,” said Michael Munroe, Legal Officer at the Ministry of Natural Resources, during his address at the 2025 Local Content Summit in April 2025.
“Our experience [has shown] that there are persons who are engaged in the practice of renting or leveraging their Guyanese nationality…to allow foreigners who should be the minority shareholder…to more or less beneficially own the company.”
Munroe said the government is now exploring additional criteria for certification, including whether Guyanese owners should meet residency requirements or demonstrate that they are participating taxpayers. These measures aim to curb the practice of locals fronting for foreign companies in joint ventures.
He emphasized that such practices undermine a fundamental goal of the Act, which is to ensure that Guyanese citizens and companies can actively participate in and benefit from the rapid growth of the oil and gas industry. “We want to ensure that the true spirit and the true intent of the Act is achieved,” Munroe said. “We don’t want Guyanese just lending their passport… but in actuality, they’re just the face of the company and the true benefits are going to the minority shareholder.”
The Local Content Act aims to optimize opportunities for Guyanese nationals and companies as the country undergoes one of the fastest economic transformations in the world, spurred by offshore oil production.
While international investors play a vital role, the law ensures that locals are not left behind in the race for oil wealth but have avenues to earn, build capacity, and generate long-term wealth for future generations.
A key feature of the Act is the First Schedule, which outlines 40 categories of services, including catering, transportation, engineering, and legal services, specified proportions of which must be supplied by Guyanese companies.
The government has said it intends to expand the number of these categories, but has not indicated a timeline or the number of additional categories. Foreign companies are allowed to participate.
The law allows for joint ventures, provided the local partner holds majority ownership. This provision creates space for knowledge transfer and builds local capacity while ensuring foreign firms can continue to operate within a structured framework.
Munroe also discussed another potential move: transforming the Local Content Secretariat bid evaluation guidelines into enforceable regulations. “We want to elevate the legal status of these guidelines to make them into regulations…to ensure that there is parity in how we deploy legal tools available to us,” he said.
These guidelines have been instrumental in shaping how oil companies score bids for contracts, with certified Guyanese companies automatically receiving a local content score: 5% up to 2024, and 10% from mid-2024 onward.
While there is no timeline for the proposed amendments, Munroe said that the government will implement updates carefully to ensure consistency and predictability for all stakeholders, especially the international companies that must navigate the investment environment.
“We want to do it in a way that allows these core principles to continue to characterize [the Act],” he said, referring to the balance between local empowerment and foreign investor confidence. “Overall, I think we’ve had considerable success.” The Local Content Summit was organised by MBW Inc. and Prestige Management Consultants in collaboration with the Local Content Secretariat through the Ministry of Natural Resources.
