Trinidad and Tobago

Bureau of Economic and Business Affairs
July 19, 2018

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Executive SummaryShare    

The two islands of Trinidad and Tobago (TT) are located in the Lesser Antilles, between the Atlantic Ocean and the Caribbean Sea. TT is a high-income developed country with a GDP per capita of over USD 15,300 and an annual GDP of USD 21 billion. It has the largest economy in the English-speaking Caribbean Community (CARICOM) and is the third most populous country with 1.4 million inhabitants.

Energy exploration and production drive TT’s economy. This sector has historically attracted the most foreign direct investment. The energy sector usually accounts for approximately almost half of GDP and 80 percent of export earnings, but these figures have fallen dramatically since 2015, the result of an ongoing decrease in energy production and a continuing decline in energy prices. TT entered a recession in 2015, and economic growth deteriorated during the first three quarters of 2017. In March 2018, the Trinidad and Tobago Central Bank noted that “growth prospects for the T&T economy have improved over the short to medium term owing to an upturn . . . in natural gas production from several new projects.”

Despite its challenges, TT is buffered by significant foreign reserves providing approximately 10 months of import cover and a sovereign wealth fund. It is also the world’s largest exporter of ammonia and methanol and is the sixth largest exporter of liquefied natural gas (LNG).

TT’s investment climate is generally open and most investment barriers have been eliminated. Major issues affecting companies are an ongoing foreign exchange shortage, inefficient government bureaucracy, crime, poor work ethic in the labor force, and corruption. Some foreign investors have seen the decision-making process for tenders and the subsequent awarding of contracts turn opaque without warning, especially when their company’s interests compete with those of well-connected local firms. TT has an undiversified economy and lacks economies of scale, so it depends on imports.

Positive aspects of TT’s investment climate:

  • Stable and democratic political system;
  • Educated and English-speaking workforce;
  • Well-capitalized and profitable commercial banking system and insurance industry;
  • Established rule of law and respect for contracts;
  • Independent judicial system that is substantively fair;
  • In certain sectors, lack of domestic competition;
  • High per-capita GDP.

Negative aspects of TT’s investment climate:

  • Foreign exchange shortages that delay payments to foreign firms;
  • Widespread perception of corruption among public officials;
  • Lack of transparency in public procurement;
  • Inefficient and complicated government bureaucracy;
  • Time-consuming resolution of legal conflicts;
  • Violent crime;
  • Full employment.

Women have equal access under the law to investment, development, and protections. However, women are still under represented in certain sectors. Various civil society organizations are working towards female empowerment in non-traditional sectors.

Table 1

Measure

Year

Index/Rank

Website Address

TI Corruption Perceptions Index

2017

77 of 175

http://www.transparency.org/
research/cpi/overview

World Bank’s Doing Business Report “Ease of Doing Business”

2017

102 of 190

http://www.doingbusiness.org/rankings

Global Innovation Index

2017

91 of 128

https://www.globalinnovationindex.org/
analysis-indicator

U.S. FDI in partner country (M USD, stock positions)

2016

USD 5,252

http://www.bea.gov/
international/factsheet/

World Bank GNI per capita

2016

USD 16,240

http://data.worldbank.org/
indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign InvestmentShare    

Policies Toward Foreign Direct Investment

The Government of Trinidad and Tobago (GOTT) desires foreign direct investment and has traditionally welcomed U.S. investors. Foreign ownership of companies is permitted under the Foreign Investment Act, and there are no laws that discriminate against foreign investors by prohibiting, limiting, nor conditioning foreign investment in any economic sectors. TT has an Investment Promotion Agency, known as InvesTT, whose role is to attract and facilitate business investment through the start-up phase. Post is not aware of any formal investment retention strategies.

The Embassy is familiar with cases where the GOTT did not follow through as expected on assurances made to U.S. firms, either because of a lack of capacity or because of allegations of corruption. Despite the challenges, TT’s wealth creates opportunities that U.S. companies enjoy in many economic sectors including finance, aviation, energy, manufacturing, and retail food franchises.

Limits on Foreign Control and Right to Private Ownership and Establishment

Both foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity. Under the Foreign Investment Act of 1990, a foreign investor is permitted to own 100 percent of the share capital in a private company but a license is required to own more than a 30 percent of a public company. The Foreign Investment Act limits foreign ownership of land to one acre for residential purposes and five acres for trade purposes without a license. In the past, the government generally granted waivers on corporate equity and land ownership restrictions. License applications are subject to review and approval/denial by the Ministry of Finance (in Trinidad) or Tobago House of Assembly (in Tobago).

Under the Companies Ordinance and the Foreign Investment Act, a foreign investor may purchase shares in a local corporation, incorporate, set up a branch office in TT, or form a joint venture or partnership with a local entity. Businesses may be freely purchased or disposed of. Private enterprises and public enterprises are treated equally with respect to access to markets, credit, and other business operations. The Companies Act, based on the Canadian Corporations Act, came into force in 1997 and was updated in the Companies (Amendment) Act, 1999.

TT maintains an investment screening mechanism for specific projects that have been submitted for the purpose of accessing sector-specific incentives, for example in the tourism industry.

Post is not aware of any sector-specific restrictions to U.S. investors. However, U.S. companies occasionally complain that corruption and nepotism results in obstacles to completion of contracts or steers contracts to local competitors.

Other Investment Policy Reviews

The Ministry of Trade and Industry and the Arthur Lok Jack Graduate School of Business collaborate with the World Bank's Ease of Doing Business annual report: http://www.doingbusiness.org/data/exploreeconomies/trinidad-and-tobago.

The WTO conducted a review of T&T’s trade policy in 2012. The report can be viewed here: https://www.wto.org/english/tratop_e/tpr_e/tp360_e.htm.

The OECD and UNCTAD have not conducted investment policy reviews.

Business Facilitation

The Government’s business facilitation efforts focus primarily on investor services (helping deal with rules and procedures) through its investment promotion agency and trying to make the rules more transparent and predictable. However, more work needs to be done to achieve efficient administrative procures, and dispute resolution. TT is ranked 151 out of 190 countries for registering property, 173 out of 190 countries for enforcing contracts and 162 out of 190 for payment of taxes.

The business registration website is: https://www.ttbizlink.gov.tt/tntcmn/faces/pnu/PnuIndex.jsf.

The Global Enterprise Registration Network (GER) gives the TT business websites a below average score of 3 out of 10 for its single electronic window and 4.5 out of 10 for providing on information on how to register a business. (http://ger.co/). The inability to make online payments, submit certificates online, and engage in simultaneous requests are the three main reasons for the low score. A feedback mechanism allowing users to communicate with authorities is a strength of the TT business websites. According to GER, two areas for improvement are:

  • Development of an online payment portal;
  • Provision of online certificates.

Trinidad and Tobago’s business facilitation mechanism does not explicitly provide for the equitable treatment of women and underrepresented minorities in the economy.

Outward Investment

The host government does not promote nor incentivize outward investment, nor does it restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation TreatiesShare    

A Bilateral Investment Treaty (BIT) between the United States and TT came into force in 1996. The BIT requires that foreign investments in most sectors receive treatment no less favorable than that accorded to domestic investments (national treatment). Apart from the U.S., TT has 12 bilateral investment agreements with the following countries:

  • Canada;
  • China;
  • Cuba;
  • France;
  • United Kingdom;
  • Germany;
  • Korea;
  • Spain;
  • Mexico;
  • India;
  • Switzerland;
  • Guatemala (signed but not in effect).

A Bilateral Taxation Treaty came into force in 1970: https://www.irs.gov/pub/irs-trty/trinidad.pdf.

3. Legal RegimeShare    

Transparency of the Regulatory System

The Companies Ordinance and the Foreign Investment Act, in general, govern foreign investments. An investment proposal can only be denied if it is illegal, contrary to public morals, or environmentally unsound. Government inaction on a proposal, however, may have the same effect as outright denial. Foreign investors have complained about a lack of transparency and delays in the investment approval process. Complaints focus on a perceived lack of delineation of authority for final investment approvals among the various ministries and agencies that may be involved in a project. Some prospective investors have abandoned their efforts in TT as a result of long delays.

Legal, regulatory, and accounting systems are consistent with international norms.

Rule-making and regulatory authority exist within the Ministries and regulatory agencies at the national level. The process for development of regulations involves the establishment of a committee comprised of stakeholders from public sector agencies, private sector firms and civil society. The committee is responsible for developing proposed regulations and may sometimes use independent studies as the basis for proposals.

Post is not aware of any informal regulatory processes managed by non-governmental organizations or private sector associations.

Proposed laws and regulations are often published in draft form for public comment, though there is no legal obligation to do so. The government solicits private sector and business community comments on proposed legislation. The government and private sector do not seek to restrict foreign participation in industry standards-setting organizations. Draft bills and regulations are often made public via a unified website managed by the government or printed in an official gazette/journal:

Affected parties can request reconsideration or appeal adopted regulations to the relevant administrative agency.

TT not a member of UNCTAD’s international network of transparent investment procedures.

International Regulatory Considerations

TT is not part of a regional economic block. Legal, regulatory, and accounting systems are consistent with international norms. Proposed laws and regulations are often published in draft form for public comment, though there is no legal obligation to do so; the government solicits private sector and business community comments on proposed legislation.

The government and private sector do not seek to restrict foreign participation in industry standards-setting organizations. Trinidad and Tobago is not a member of UNCTAD’s international network of transparent investment procedures, though it is a member of the WTO. The Government notifies all draft technical regulations to the WTO committee on Technical Barriers to Trade (TBT). Trinidad and Tobago is a signatory to the Trade Facilitation Agreement since 2015.

Legal System and Judicial Independence

TT has a parliamentary democracy modeled on the English Westminster System and has an independent judicial system that is competent and procedurally and substantively fair. However, it is backlogged and generally lacks specialized courts, making the resolution of legal claims time consuming.

Ownership of property is enforced through the court system. Civil cases of less than USD 7,000 are heard by the Magistrate’s Court. Matters exceeding that amount are heard in the High Court of Justice, which can grant equitable relief. Decisions may be appealed to the TT Court of Appeal. The United Kingdom Privy Council Judicial Committee is the final court of appeal. Criminal acts are first heard by the Magistrates’ Court and may also be appealed as high as the Privy Council. Domestic courts are able to refer parties to mediation. A Mediation Board was created in 2004 with responsibility for certifying mediators and accrediting training programs.

The World Bank ranks TT 173 out of 190 countries for enforcing contracts due to the length of time required to resolve a dispute. There is no court or division of a court dedicated solely to hearing commercial cases. An Industrial Court exclusively handles cases relating to labor practices but also suffers from severe backlogs. Regulations and enforcement actions are appealable.

Laws and Regulations on Foreign Direct Investment

TT’s judicial system respects the sanctity of contracts and generally provides a level playing field for foreign investors involved in court matters. Due to the backlog of cases, however, there can be major delays in the process. It is imperative that foreign investors seek competent local legal counsel. Some U.S. companies are hesitant to pursue legal remedies, preferring to attempt good faith negotiations in order to avoid an acrimonious relationship that could harm their interests in the country’s small, tight-knit business community.

The major laws/regulations, and judicial decisions affecting incoming foreign investment are:

  • Foreign Investment Act;
  • Occupational Safety and Health Act;
  • Minimum Wage Act;
  • Retrenchment and Severance Benefits Act.

Useful websites to help navigate foreign investment laws, rules, and procedures are:

Competition and Anti-Trust Laws

The Intellectual Property Act of 2000 covers unfair competition, misleading the public, discrediting another's enterprise and activities, and disclosure of secret information. The Act identifies which agencies review transactions for competition-related concerns. Enforcement of the law is a concern as the procedure for reviewing competition related concerns is lengthy.

The Fair Trading Commission, established in 2014, has the responsibility for promoting and maintaining fair competition in the domestic market. It investigates the various forms of anti-competitive business conduct set out in the Fair Trading Act.

Expropriation and Compensation

The government can legally expropriate property based on the internal needs of the country and only after due process including adequate compensation, generally based on market value.

The Embassy is not aware of any direct or indirect expropriation actions since the 1980s. All prior expropriations were compensated to the satisfaction of the parties involved. There is no indication of policy shifts that might lead to the implementation of expropriations in the near future.

Dispute Settlement

ICSID Convention and New York Convention

TT is a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention).

TT ratified the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York convention). Local courts recognize and can enforce foreign arbitral awards according to chapter 20 of the Arbitration (Foreign Arbitral Awards) Act 1996.

The 1958 New York convention allows the enforcement of arbitral awards in international arbitration proceedings. TT’s Judgments Extension Act Chap 5:02 grants the reciprocal enforcement in TT of Judgments of the United Kingdom and other Commonwealth countries. It provides a system of registration to facilitate the direct enforcement of money judgments. A foreign judgment that emanates from a jurisdiction which does not fall within the schedule of countries listed in the Judgments Extension Act will be enforceable in Trinidad and Tobago once the following criteria are satisfied:

  • The courts of TT recognize the jurisdictional competence of the foreign Court;
  • The foreign judgment is for a definite sum of money;
  • The foreign judgment is final and conclusive; and
  • There is no defense to the recognition of the foreign judgment.

Investor-State Dispute Settlement

The Bilateral Investment Treaty between the United States and TT allows for alternative dispute resolution measures, including binding arbitration.

Investment disputes are not common in TT. Post is only aware of one investment dispute involving a U.S. company in the past ten years. Trinidad and Tobago follows English common law, widely considered efficient in response to foreign arbitral awards. There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

The Bilateral Investment Treaty between the United States and TT allows for alternative dispute resolution measures, including binding arbitration. There is a domestic dispute resolution center that offers arbitration services. Judgments of foreign courts are recognized and enforceable under the local courts. The Highest Court of appeal is the Privy Council in London.

Lack of court automation, delays in case management, and a lack of capacity have caused tremendous backlogs. Dispute resolution for investment/commercial issues takes approximately 1,340 days (3.6 years), according to the World Bank. This includes filing, trial, judgment, and enforcement. Alternative Dispute Resolution is often a preferred route because of shorter timeframes.

Bankruptcy Regulations

The Bankruptcy and Insolvency Act of 2006 was proclaimed by the President in 2014. A dramatic improvement. It introduces a formal mechanism for rehabilitation, establishes a public office responsible for the general administration of insolvency proceedings, and clarifies the rules on appointment of trustees.

In 2017 the World Bank ranked TT at 72 of 190 countries for resolving insolvency in their Ease of Doing Business Index. This reflects TT’s recovery rate (cents on the dollar) which is worse than the regional average and cost as a percentage of estate. In terms of the insolvency framework index, TT is ranked well above the regional average, almost on par with OECD high income countries. Bankruptcy is not criminalized in TT. Creditors, equity shareholders, and holders of other financial contracts (including foreign contract holders) can present a bankruptcy petition to the High Court. Secured creditors are given first preference to liquidated assets.

4. Industrial PoliciesShare    

Investment Incentives

The GOTT desires foreign direct investment in almost all sectors, with specific focus on non-energy targeted sectors. Foreign and local investors are generally treated equally with respect to incentives like exemption from duties, tax breaks, and tax credits. TT offers cash rebates for specific projects within certain sectors to encourage sector development and/or local service and supply sourcing where relevant. Additional information is available on the www.investt.com website.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Free Zones Act of 1988 (last amended in 1997) established the TT Free Zones Company (TTFZ) to promote export development and encourage both foreign and local investment projects in a relatively bureaucracy-free, duty-free, and tax-free environment. There are currently 17 approved enterprises located in eight free zones. The majority are located within a multiple-user site in D'Abadie, Trinidad, but any suitable area in TT can be designated as a free zone by the Minister of Trade and Industry.

Free zone enterprises are exempt from: customs duties on capital goods, parts, and raw materials for use in the construction and equipping of premises and in connection with the approved activity; import and export licensing requirements; land and building taxes; work permit fees; foreign currency and property ownership restrictions; capital gains and taxes; withholding taxes on distribution of profits and corporation taxes or levies on sales or profits; VAT on goods supplied to a free zone; and duty on vehicles for use only within the free zone.

A corporation tax exemption for entities that qualify for free zone status is also in force. Application to carry out an approved activity in an existing free zone area is made on specified forms to the TTFZ.

If the project requires designation of a new free zone area, a separate application form for designation is made to the TTFZ, which recommends designation to the Minister of Trade and Industry. Designation is effected by order of the Minister. Applications for work permit waivers are recommended by the TTFZ through the work permit secretariat of the Ministry of National Security. Free Zone activities that qualify for approval include manufacturing for export, international trading in products, services for export, and development and management of free zones. Activities that may be carried on in a Free Zone but do not qualify as approved activities include exploration and production activities involving petroleum, natural gas, or petrochemicals.

Performance and Data Localization Requirements

The GOTT does not mandate—although it strongly encourages, through negotiable incentives—projects that generate employment and foreign exchange; provide training and/or technology transfer; boost exports or reduce imports; have local content; and generally contribute to the welfare of the country. However, foreign investment is screened for potential environmental impact. The government encourages joint ventures between foreign and local corporations. Corporate partners in a joint venture are governed by a joint-venture partnership agreement.

Foreigners entering TT to engage in legitimate trade or occupation may do so without a work permit for a single period not to exceed thirty days within a twelve consecutive month period. To engage in legitimate work for any period in excess of thirty days, a work permit must be obtained from the Ministry of National Security through the proposed employer. This system has created logistical challenges for companies involved in large industrial and energy projects that frequently need technicians for periods longer than thirty days. TT’s Bilateral Investment Treaty with the United States specifies that a company making an investment may engage top managerial personnel of its choice, regardless of nationality.

Several foreign firms have alleged that there are inconsistencies in the issuance of long-term work permits beyond top management. These generally fall into three categories:

  • A permit is not granted to an official of a company that is competing with a local firm;
  • A permit is not granted because TT officials believe the firm should instead hire a TT national;
  • TT authorities threaten not to renew a permit because a foreign firm has not done enough to train and promote a TT national into the position.

Some companies report employee shortages due to the inability to find qualified job applicants who are TT citizens. Some executives of smaller companies have found that their work permits are only approved if they form joint ventures with local firms or set up formal training programs.

There are no forced localization requirements, so foreign firms are not obligated to purchase locally sourced materials. Data storage legislation is in the drafting stage. There are no enforcement procedures for performance requirements.

5. Protection of Property RightsShare    

Real Property

Property rights are protected under the constitution and common-law practice. Secured interests in property are recognized and enforced; however, TT has a dual system of land titles, the old Common Law title system and the registered land title system governed by the Real Property Act of 1946. 75-80 percent of land in TT remains under the more complicated Common Law System, which is not reliable for recording secured interests. The Government does not make a defined effort to identify property owners and register land titles. Individuals use law firms to conduct identification of property owners. The Registration of Titles to Land Bill was amended in November 2017 but it is not clear that the changes will result in a substantive improvement to the title registration system.

TT ranks 151 out of 190 countries in the 2017 World Bank’s rankings for Ease of Registering Property reflecting a greater number of procedures, time required and costs when compared to the regional average. As a result of inefficiencies in the TT system, it is not clear what proportion of land does not have clear title. TT has initiated the process of digitizing property records in order to make their property registration system quicker and more efficient. Property ownership can revert to squatters if they can prove ‘exclusive’ possession of another’s land, without permission, for at least 16 years in the case of private lands and 30 years on State lands.

Intellectual Property Rights

The GOTT is supportive of intellectual property rights (IPR) internationally, is a signatory to several international agreements on IPR, and has specific legislation that protects many forms of IPR. TT’s legal framework, though strong, is of limited consequence due to weak enforcement. The police service does not focus on IPR, instead focusing on the drugs and gangs that give TT among the highest homicide rates in the world. Customs has employees in only fifty percent of its job positions and seldom makes IPR seizures. The Director of Public Prosecutions and the Judiciary are hampered by a cumbersome legal system and the requirement that rights holders, who are often not interested in pursuing claims in such a small jurisdiction, be physically present for trial.

Since rights holders seldom pursue claims in TT and the country doesn't track seizures, it is very difficult to accurately assess the prevalence of counterfeit goods in the local market. Customs officers have ex officio authority to detain counterfeit goods but need input from the rights holder to pursue a case. If discovered, the importer would be responsible for paying for the storage and destruction of the counterfeit goods.

TT was on the United States Trade Representative’s (USTR) Watch List for having intellectual property rights deficiencies from 2013 to 2015. TT is not listed in the notorious market report.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

Resources for Rights Holders

The contact for intellectual property issues at U.S. Embassy Port of Spain is:

Matt Ciesielski, Economic and Commercial Officer
+1 868-622-6371
CiesielskiMM@state.gov

The TT legal authority for IP issues is:

Intellectual Property Office
Ministry of Legal Affairs
http://www.ipo.gov.tt/
868-625-1907; 868-627-0706
info@ipo.gov.tt

Public list of local lawyers: https://tt.usembassy.gov/wp-content/uploads/sites/114/2016/12/list-of-attorneys_nov-2016.pdf.

6. Financial SectorShare    

Capital Markets and Portfolio Investment

In general, the government welcomes foreign portfolio investment and has an established regulatory framework to encourage and facilitate portfolio investment. TT has well-developed capital markets.

A full range of credit instruments is available to the private sector, including a small but well-developed stock market. There are no restrictions on borrowing by foreign investors, nor are there intentional restrictions on payments and transfers for international transactions. (However, shortages of foreign exchange can cause delays in obtaining funds for transfer).

Local credit is expensive by U.S. standards due to high commercial bank reserve requirements, but businesses can negotiate for low rates.

Money and Banking System

Banking services enjoy a high level of penetration within urban areas while rural areas have significantly lower levels. The banking sector is considered healthy, as it is well capitalized and liquid. Despite cutbacks in both the public and private sector arising from TT’s recession, lending growth has increased steadily.

The estimated total assets of TT’s banks in 2017 are approximately USD 20.2 billion, the five largest banks’ assets are estimated at USD 8.4 Billion.

In 2017, the Central Bank estimated non-performing loans at 2.9 percent, down from a high of 6.3 percent in 2011. The legal, regulatory, and accounting systems governing credit markets are, on the whole, effective and transparent, although TT needs stricter regulation of the insurance industry. In 2012, the GOTT amended its Securities Act in hopes of supporting fair and efficient capital markets.

TT's Financial Institutions Act of 2008 provides penalties up to USD 800,000 and five years in jail for operating without a license from the Central Bank. Directors and Officers of a company violating the Act can be held liable.

Foreign banks are allowed to establish operations in TT provided they obtain a license from the Central Bank. At present, there are foreign banks from the United States, Canada, Jamaica and India operating in TT. The country has not lost any correspondent banking relationships over the past three years.

There are no restrictions on a foreigner’s ability to establish a bank account.

TT has not announced that it intends to implement or allow the implementation of block chain technologies in its banking transactions.

Foreign Exchange and Remittances

Foreign Exchange Policies

Despite TT having substantial foreign exchange reserves, businesses continue to report a cumbersome bureaucratic process and a minimum three-month delay in accessing foreign exchange. Some companies claim exchanging TT for U.S. dollars can take up to 180 days. While there are no formal exchange controls, TT’s Central Bank manages the exchange rate, and has pursued a policy of maintaining a large stock of foreign reserves, which has resulted in shortages. Funds associated with any form of investment can be freely converted into any world currency pending availability. The exchange rate depreciated to 6.8 at the end of 2016 after many years fluctuating between TTD 6.2 and 6.5. It remained at 6.8 throughout 2017 into 2018.

TT’s financial system is well-organized and regulated. The Central Bank determines monetary policy and regulates operations of the commercial banks and other financial institutions. The Automated Banking Machine (ABM) banking system offers access to advance cash withdrawals for VISA, MasterCard, and VISA Plus. Internet banking is available at all commercial banks. The regulated financial institutions consist of eight commercial banks, 17 non-bank financial institutions, and three financial holding companies. TT is a member of the International Monetary Fund, the World Bank, the Inter-American Development Bank, and subscribes to the General Agreement on Tariffs and Trade. The repatriation of capital, dividends, interest, and other distributions and gains on investment may be freely transacted without limits.

There is no requirement for withholding on interest paid to resident individuals with respect to loans secured by bonds or other similar investment instruments. When the individual is a non-resident, the withholding tax is 20 percent, except in cases where treaty relief is available.

Remittance Policies

Where the remittance is in the form of dividends paid to a U.S. individual, the tax rate is 15 percent of the gross dividend. In the case of a U.S. company owning more than 10 percent of the voting control of a TT company, the rate is 10 percent of the gross dividend. For dividends paid to a U.S. company with less than 10 percent ownership, the tax rate is 15 percent. In the case of a U.S. resident company having a branch or permanent establishment in TT, branch profit tax would be applicable on a deemed remittance made by the branch. The rate of branch profit tax is 10 percent, levied on the after-tax profits of the branch, minus any reinvestment of such profits (other than in the replacement of fixed assets). There are no options for remittance through legal parallel markets including those utilizing convertible, negotiable instruments.

TT is a member of the Caribbean Financial Action Task Force. In November 2017, TT was added to the FATF list of jurisdictions with strategic anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies.

Sovereign Wealth Funds

TT established its Heritage and Stabilization Fund (HSF) in 2007 as the country’s sole sovereign wealth fund. Its stated purpose is to save and invest surplus petroleum revenues (in excess of 60 percent of estimated revenues) in order to both sustain public expenditure capacity during periods of revenue downturn and provide a heritage for future generations of citizens. At present, the value of the fund is approximately USD5.76 Billion. The 2007 legislation mandates that the Fund be maintained in U.S. dollars and prohibits domestic or petroleum-related investments. The fund invests in U.S. short duration fixed income, U.S. Core Domestic Fixed Income, U.S. Core Domestic Equities and Non-U.S. Core International Equities.

The Fund’s day-to-day operations are managed by the Central Bank and governed by a five member Board, including one representative from the Central Bank and one representative from the Ministry of Finance. They adopt a passive role as portfolio investors and manage the fund largely in accordance with the Santiago Principles. TT participates in the IMF hosted International Working Group on Sovereign Wealth Funds.

7. State-Owned EnterprisesShare    

TT has 117 State Owned Enterprises (SOEs) in sectors like energy, manufacturing, agriculture, tourism, financial services, transportation, and communication. According to TT’s Constitution, the Government is entitled to:

  • exercise control directly or indirectly over the affairs of the enterprise;
  • appoint a majority of directors of the board of directors of the enterprise;
  • hold at least 50 percent of the ordinary share capital of the enterprise.

The Investments Division of the Ministry of Finance is responsible for conducting management and performance audits of State Enterprises, which includes 47 wholly-owned companies, seven majority-owned companies, five minority-owned companies (i.e. less than fifty percent holdings), and 51 companies held indirectly as subsidiaries of wholly-owned companies. There are also seven statutory corporations.

The Investments Division also has the responsibility to appoint directors to the board of state enterprises. The Division submits the Annual Audited Accounts of State Enterprises to the Public Accounts Committee, and the Audited Annual Reports are available to the public. State-owned companies are required to disclose the financial interests and decision making processes of their executives. SOEs are often informally or explicitly obligated to consult with government officials before making major business decisions. In sectors that are open to both the private sector and foreign competition, SOEs are sometimes favored for government contracts.

SOEs frequently undertake commercial activities as well as their public function mandates. They also purchase goods from the private sector including foreign firms. Some prominent SOEs include the Urban Development Company of Trinidad and Tobago (UDECOTT) and the National Infrastructure Development Company (NIDCO), both of which are responsible for large-scale construction projects. In the energy sector, Trinidad and Tobago has three fully state-owned companies, the Petroleum Company of Trinidad and Tobago, the National Gas Company, and the National Petroleum Marketing Company; it also holds an interest in several joint ventures.

No information is available concerning the percentage of expenditures allocated to Research and Development (R&D). TT is not party to the Government Procurement Agreement within the framework of the WTO.

Private enterprises have the same access to financing as SOE’s. SOE’s are subject to the same tax burden and tax rebate policies as their private sector competitors. SOE’s are subject to hard budget constraints under the law and these are enforced through the allocations they are disbursed on a quarterly basis.

Privatization Program

TT does not have a privatization program in place though the government has issued Initial Public Offerings on various state owned companies in order to obtain revenue, primarily in the finance and energy sectors. The purchase of IPO shares was open to the public.

8. Responsible Business ConductShare    

There is general awareness of responsible business conduct (RBC) among large and mid-size businesses in TT, particularly with regard to governance and social issues. The government has not put forward a clear definition of responsible business conduct nor does it have specific policies to promote and encourage it. Despite this, efforts by civil society have encouraged the Government to consider legislation relating to public procurement (in which the private sector participates fully) and whistleblowing. TT is in the process of operationalizing legislation related to new public procurement. There have not been any high-profile, controversial instances of corporate impact on human rights. TT has laws to ensure protection of labor rights, consumer protection, and environmental protection. Enforcement, however, is lacking due to staffing shortages, capacity issues, and a bureaucratic judiciary.

There is no TT National Contact Point for the OECD Multinational Enterprises Guidelines. GOTT updated legislation for the financial sector that would encourage responsible business conduct. The Government in collaboration with civil society created the TT Corporate Governance Code that incorporates governance, accounting, and executive compensation standards to protect shareholders. The Code is not mandatory. The Caribbean Corporate Governance Institute is not-for-profit organization headquartered in Trinidad and Tobago, that freely advocates for responsible business conduct and improved corporate governance practices in the Caribbean.

As a member of the EITI, GOTT agreed to publicly declare annually all revenues received from companies engaged in the extractive industries (oil and gas upstream activities, initially) and the companies, in turn, agreed to publicly declare monies paid to GOTT.

9. CorruptionShare    

Bribes are not regularly required to facilitate routine operations; however, reports of corruption are common. Allegations seldom work through the legal system, resulting in a scarcity of cases with legal outcomes.

Various items of legislation address corruption of public officials:

  • The Integrity in Public Life Act requires public officials to disclose assets upon taking office and at the end of tenure;
  • The Freedom of Information Act gives members of the public a general right (with specified exceptions) of access to official documents of public authorities. The intention of the Act was to address the public’s concerns of corruption and to promote a system of open and good governance. In compliance with the Act, designated officers have been appointed in each Ministry and statutory authority to process the applications for information;
  • The Police Complaints Authority Act establishes a mechanism for complaints against police officers in relation to, among other things, police misconduct and police corruption;
  • The Prevention of Corruption Act provides for certain offences and punishment of corruption in public office.

The laws are non-discriminatory in their infrequent application. The laws do not extend to family members of officials or to political parties. TT’s rank in the Corruption perception index has trended downward since 2001. The local press actively reports on allegations of waste, fraud, or abuse of public resources. Successive governments have been elected on mandates to stop corruption. The current government says it will pursue whistleblower legislation, procurement reform, and campaign finance reform.

In recent years, the GOTT has established a number of commissions of inquiry into inappropriate conduct in public contracting, but no one has been found guilty. The fine for non-appearance at the commission of inquiry is USD 300.

The Government has been a party to the development of Corporate Governance standards (non-binding) that encourage private companies to establish internal codes of conduct that, among other things, prohibits bribery of public officials. Some private companies, particularly the larger ones, use internal controls and compliance programs to detect and prevent bribery of government officials, though this is not a requirement by the Government.

There are no protections for NGO’s involved in investigating corruption, but investigations are not feared since corrupt actors are not punished.

TT’s procurement processes are not fully transparent. U.S. firms have identified corruption as an obstacle to FDI, specifically in government procurement. Government ministries and special purpose public companies have, on occasion, manipulated or bypassed established procurement procedures to favor specific vendors, raising questions about the government’s commitment to transparency. Nevertheless, a number of U.S. companies have secured government service contracts in recent years. TT is not a party to the WTO Government Procurement Agreement.

No local industry or non-profit groups offer services for vetting potential local investment partners.

Resources to Report Corruption

Contact at government agency responsible for combating corruption:

The Integrity Commission
P.O. Box 1253, Port of Spain
The Integrity Commission of Trinidad and Tobago Level 14,
Tower D, International Waterfront Centre
1 A Wrightson Road, Port of Spain.
registrar@integritycommission.org.tt
868-623-8305

Contact at "watchdog" organization:

Trinidad and Tobago Transparency Institute (local chapter of Transparency International)
Unit 4-12, Building 7
Fernandes Industrial Centre, Laventille
admin@transparency.org.tt
868-626-5756

10. Political and Security EnvironmentShare    

There have been no serious incidents of political violence since an unsuccessful coup attempt in 1990. While non-violent demonstrations occur on occasion, widespread civil disorder is not typical.

11. Labor Policies and PracticesShare    

TT is a net importer of expatriate labor including doctors, nurses, construction workers, and extractive industry specialists. In September 2017 the unemployment rate was 4.9 percent, but it is artificially low due to government make-work programs that absorb excess labor. TT’s recession has resulted in a number of layoffs and plant closures that will be reflected in future labor reports. The labor market offers a high proportion of skilled and experienced workers, and the educational level of the population is among the top 10 in North America, according to the Human Development Index, though there is a gap between official literacy statistics and functional literacy. The youth unemployment rate (20-24 years of age) is above the national average at 7.3 percent. Agricultural employment accounts for four percent of total employment while employment in services accounts for over 60 percent of total employment.

There are surpluses of accountants and attorneys, while there are shortages of unskilled workers for the hospitality, retail and agriculture sectors. Government subsidizes tertiary level education for citizens whose income falls within a minimum range.

There is no government policy requiring hiring of nationals, though it is encouraged. There are no restrictions on employers adjusting employment to respond to fluctuating market conditions, via severance. Labor laws differentiate between layoffs and firing. The Retrenchment and Severance Benefits Act is the legislation providing guidance on who is entitled to receive what based on specific circumstances. Severance pay is usually only paid to workers who have been made redundant or retirees. An employer is not required to pay severance to workers if everyone is severed, owing to the fact that the business is being closed down; however, the employer must pay severance if only a portion of the workforce is being made redundant. Unemployment insurance does not exist for workers who have been laid off for economic reasons, but programs designed to help job seekers get employed as quickly as possible are available.

The government has been employing a number of temporary workers for jobs that are not temporary, but the reasons for this are unclear. It is not common for labor laws to be waived in order to attract or retain investment. There are no different labor law provisions for special economic zones, trade zones, free ports, or the economy as a whole.

The law provides for the right of most workers, including those in state-owned enterprises, to form and join independent unions of their choosing without prior authorization. Employees listed in essential services, such as hospital, fire, and communication services do not have the right to strike, and walkouts can bring punishment of up to 18 months in prison. Employees in these sectors may instead hold “sickouts” or “work to rule”. Employees negotiate with the government’s chief personnel officer to resolve labor disputes. The law stipulates that only strikes over unresolved interest disputes may take place and that authorities may prohibit strikes at the request of one party if not called by a majority union. The Ministry of Labor offers conciliation services through a dedicated unit established to help resolve disputes between employers and unions (www.ttconnect.gov.tt/).

The Industrial Relations Act (IRA) is the main piece of legislation governing labor relations in TT. It provides for dispute resolution through an industrial court in instances where the issue cannot be resolved at the collective bargaining table or through conciliation efforts by the Ministry of Labor. Additional legislation affecting the labor force in TT includes the Minimum Wage Act, the Occupational Health and Safety Act, the Workmen’s Compensation Act, and the Maternity Protection Act.

The IRA provides for the following:

  • free collective bargaining between employer and workers through their representative associations;
  • the development of a peaceful and expeditious procedure for the settlement of disputes;
  • the establishment of the Industrial Court;
  • the recognition and registration of trade unions;
  • the freedom to be represented by a trade union and the right not to associate; and
  • industrial action which may be taken by both employer and employee.

The law also provides for mandatory recognition of a trade union when it represents 51 percent or more of the workers in a specified bargaining unit. The law allows unions to participate in collective bargaining and mandates reinstatement of workers illegally dismissed for union activities. The government enforces labor laws effectively, including with effective remedies and penalties. Worker organizations are independent of government and political parties. The law sets the minimum age for employment in public and private industries at 16. Children ages 14 to 16 may work in activities in which only family members are employed or that the Ministry of Education has approved as vocational or technical training. The law prohibits children under age 18 from working between the hours of 10 p.m. and 5 a.m., except in a family enterprise or within other limited exceptions.

The national minimum wage is TTD 15.00 (USD 2.37) per hour. The law establishes a 40-hour workweek, a daily period for lunch or rest, and premium pay for overtime. The law does not prohibit excessive or compulsory overtime. The law provides for paid leave, with the amount of leave varying according to length of service.

The law sets occupational health and safety standards that the Occupational Safety and Health Agency (OSHA) enforced. The government’s occupational health and safety regulations apply to all workers, regardless of citizenship. Local labor laws generally protected foreign laborers brought into the country, a stipulation usually contained in their labor contract.

There are close to 30 active labor unions in TT and they are independent both legally and in practice. Collective bargaining is common with approximately 15 percent of the population covered by collective bargaining agreements. Government workers including civil servants, policemen, firemen, military personnel, and staff in several State Owned Enterprises are covered by collective bargaining agreements. Unions are also quite active in the energy, steel and telecommunications industries. In TT collective bargaining takes place between company and recognized majority union rather than on an industry wide basis. The Government as an employer also bargains collectively. The process of collective bargaining is regulated by the Industrial Relations Act.

In 2017 there was one major strike involving the only refinery that employs 5000 workers. The unions achieved increased wages for the employees.

The ILO has not identified any compliance gaps in law or practice regarding international labor standards that may pose a reputational risk to investors. The government does not have a labor inspectorate system to identify and remediate labor violations; however, the labor relations court investigates and prosecutes unfair labor practices, such as harassment and/or dismissal of union members. Trinidad and Tobago has ratified most key international conventions concerning child labor. There are no new labor related laws or regulations enacted in 2017. TT has a trade relationship with the U.S. and all companies operating in TT must adhere to the labor laws.

12. OPIC and Other Investment Insurance ProgramsShare    

The Overseas Private Investment Corporation (OPIC) provides financial products like loans and guaranties, political risk insurance, and support for investment funds to help American businesses expand into emerging markets like TT. OPIC has a bilateral agreement with Trinidad and Tobago.

13. Foreign Direct Investment and Foreign Portfolio Investment StatisticsShare    

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

 

Host Country Statistical source*

USG or international statistical source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data

Year

Amount

Year

Amount

 

Host Country Gross Domestic Product (GDP) (M USD)

2016

USD 21,939

2016

USD 21,895

www.worldbank.org/en/country

Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country (M USD, stock positions)

2016

USD 309.4

2016

USD 5,252

BEA data available at
http://bea.gov/international/direct_
investment_multinational_
companies_comprehensive_data.htm

Host country’s FDI in the United States (M USD, stock positions)

**N/A

2016

USD 115

BEA data available at
http://bea.gov/international/direct_
investment_multinational_
companies_comprehensive_data.htm

Total inbound stock of FDI as % host GDP

2016

1.4%

2016

24%

N/A

*Source: Central Bank of Trinidad and Tobago: https://www.central-bank.org.tt/statistics/data-centre.
**Data unavailable


Table 3: Sources and Destination of FDI

Foreign direct investment position data are not available for Trinidad and Tobago.


Table 4: Sources of Portfolio Investment

Portfolio investment data are not available for Trinidad and Tobago.

14. Contact for More InformationShare    

Matt Ciesielski, Economic and Commercial Officer, CiesielskiMM@state.gov
Marissa Nicholas, Commercial Assistant
Embassy of the United States of America
15 Queen’s Park West
Port of Spain, Trinidad W.I.