How to Create Jobs on St. Maarten

By Terrance Rey

What does the recently passed American Jobs Act, Crowdfunding and St. Maarten have to do with each other? And how can they improve the investment climate and generate jobs on St. Maarten? Before I answer those questions, let me first explain what the American Jobs Act and Crowdfunding is all about.


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The American Jobs Act is a recently passed bill proposed and signed into law on April 5th 2012, by US President, Barack Obama, and is designed to get Americans back to work. An important element of this bill is the loosening of regulations on small businesses that wish to raise capital, including through Crowdfunding, while retaining investor protections. Why is this key provision of this bill so important? Up until now, small businesses and entrepreneurs are only allowed to offer shares in their companies to investors if they are raising less than 1 million dollars and the investors are people they know, like family and friends, who are considered ‘unaccredited’ investors, meaning they have a net worth less than 1 million dollars. The Jobs Act now offers the US Securities Exchange Commission, the SEC, a legal basis to adopt new regulations making it possible for small businesses to raise capital from a wider pool without the aforementioned limitations, thereby giving Crowdfunding a legal basis as a community funding model allowing entrepreneurs to reach out to their own communities for funding in an efficient and legally compliant way. So what exactly is Crowdfunding? Crowdfunding or crowd funding (alternately crowd financing, equity crowdfunding, or hyper funding) according to Wikipedia describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the internet, to support efforts initiated by other people or organizations. Crowdfunding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company, movie or small business or creating free software. What does all of this have to do with St. Maarten? Well, as a relatively small community, St. Maarten has the perfect size for Crowdfunding. Most people are friends or related to each other. So it should be relatively easy for an entrepreneur or small business to raise funding using the Crowdfunding model. The news gets even better when we realize a legal framework already exists that allows entrepreneurs and small businesses the ability to raise up to a maximum of 500,000 guilders for their ventures. This can be done using the investment club model. Participants in an investment club, up to a maximum of 25 natural persons, can each invest a maximum of 20,000 guilders, thus a total of 500,000 guilders, in an investment opportunity without a license or supervision from the Central Bank of Curacao and St. Maarten (CBCS). In anticipation of legitimate and legally compliant crowdfunding platforms, I suggest St. Maarteners pool their resources and form investment clubs. Theoretically speaking, 20 investment clubs can effectively raise 10 million guilders to offer entrepreneurs and small businesses capital in exchange for equity. I am thinking big of course, but small investment clubs are also possible. Each participant can choose to put in 100 to a 1000 guilders and pool from any amount up to 25,000 guilders to invest in start-ups or provide micro-financing to small businesses. If banks are only offering 1 to 2% interest on savings, pouring some of your savings into an investment club can do more than just raise capital for investments, but potentially offer you a significantly higher return on your investment than a savings account ever will. But most importantly, you will create jobs in the process as well. Research in the USA proves that more net jobs creation is generated by small businesses than any other sector of the economy. If President Obama believes in this, then you should too. Think about it!

Terrance Rey
Internet Entrepreneur

Terrance Rey is an Internet Entrepreneur and Policy Advisor in the Parliament of St. Maarten and can be reached for more information about Crowdfunding and Investment Clubs via te******@an************.com.