Policies Towards Foreign Direct Investment

The Government of Jamaica (GOJ) is open to foreign investment in all sectors of its economy, and is currently in the process of developing a National Investment Policy to guide future foreign direct investment (FDI) reform.  The GOJ has also made significant structural changes to its economy, under International Monetary Fund (IMF) guidance over the past six years, resulting in an improved investment environment. Since 2013, Jamaica’s Parliament passed numerous pieces of legislation to improve the business environment and support economic growth through a simplified tax system and broadened tax base.  The establishment of credit bureaus and a Collateral Registry under the Secured Interest in Personal Property (SIPP) legislation are improving access to credit. Jamaica made starting a business easier by consolidating forms and made electricity less expensive by reducing the cost of external connection works. The GOJ implemented an electronic platform for tax payments and established a 90-day window for development approvals.

The GOJ’s public procurement regime was amended, with effect from April 2019, to include provisions for domestic margins of preference, affording preferential treatment to Jamaican suppliers in public contracts in some circumstances, and setting aside a portion of the government’s procurement budget for local micro, small, and medium enterprises.  Notwithstanding, U.S. businesses are encouraged to participate in GOJ open procurements, many of which are published in media and via the government’s electronic procurement website: https://www.gojep.gov.jm/  .

With Jamaica’s debt to GDP ratio having decreased to approximately 96 percent, the government used the attendant fiscal space to reduce and/or abolish a number of distortionary taxes effective April 2019.

Jamaica’s commitment to regulatory reform is an intentional effort to become a more attractive destination for foreign investment.  According to the World Bank’s “Doing Business 2019” report, Jamaica ranked 75 out of 190 economies, above average compared to Latin American and Caribbean countries.  The country made significant improvement in resolving insolvency, following the passage of new bankruptcy legislation and now ranks 6th in starting a business and a much improved 12th in getting credit.  Jamaica ranked 79 out of 140 countries in the World Economic Forum’s 2018 Global Competitiveness Index.  Some report that bureaucracy remains a major impediment, with the country continuing to underperform in the areas of trading across borders, registering property, paying taxes, and enforcing contracts.

Jamaica’s trade and investment promotion agency (JAMPRO) is the GOJ agency responsible for promoting business opportunities to local and foreign investors.  While JAMPRO does not institute general criteria for FDI, the institution targets specific sectors for investment and promotes Jamaican exports (see http://www.jamaicatradeandinvest.org/  ).

JAMPRO and the Jamaica Business Development Corporation assist micro, small, and medium-sized enterprises (MSME) primarily through business facilitation and capacity building.  MSMEs tend to consist of less than 10 employees. Such fee-based services are made available to foreign-owned MSMEs (see https://www.jbdc.net/  ).

Limits on Foreign Control and Right to Private Ownership and Establishment

All private entities, foreign and domestic, are entitled to establish and own business enterprises, as well as to engage in all forms of remunerative activity subject to inter alia, labor, registration, and environmental requirements.  Jamaica does not impose limits on foreign ownership or control and local laws do not distinguish between local and foreign investors. There are no sector-specific restrictions that impede market access. An amendment to the Companies Act, passed in 2017, requires companies to disclose beneficial owners to the Companies Office of Jamaica (ORC).  The law mandates that the company retain records of legal and beneficial owners for seven years.  The GOJ has proposed new legislation on the incorporation and operation of International Business Companies (IBC), which is designed to attract and facilitate a wide variety of international business activities to include: (1) holding companies providing asset protection for intellectual property rights, real property, and the shares of other companies; (2) serving as vehicles for licensing and franchising; (3) conducting international trade, and investment activities; (4) acting as special purpose vehicles in international financial transactions; and, (5) serving as the international headquarters for global companies.

The U.S. government is not aware of any discrimination against foreign investors at the time of initial investment or after the investment is made.  However, under the Companies Act, investors are required to either establish a local company or register a branch office of a foreign-owned enterprise.  Branches of companies incorporated abroad must register with the Registrar of Companies if they intend to operate in Jamaica. There are no laws or regulations requiring firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control.  Incentives are available to local and foreign investors alike, including various levels of tax relief.

Other Investment Policy Reviews

Jamaica concluded a third party trade policy review through the WTO in September 2017.  The WTO Secretariat’s recommendations are listed here: https://www.wto.org/english/tratop_e/tpr_e/tp459_e.htm  

Jamaica has not undertaken any investment policy reviews within the last three years in conjunction with the Organization for Economic Cooperation and Development (OECD) or United Nations Conference on Trade and Development (UNCTAD).  The GOJ’s previous WTO review took place in 2011 and an OECD review took place in 2004.

Business Facilitation

Businesses can register using the “Super Form,” a single Business Registration Form for New Companies and Business Names.  The ORC acts as a “one-stop-shop,” effectively reducing the registration time to between one and three days.  Foreign companies can register using these forms, with or without the assistance of an attorney or notary. The “Super Form” is available under Forms at the ORC’s website (https://www.orcjamaica.com  ).

Outward Investment

While the GOJ does not actively promote an outward investment program, it does not restrict domestic investors from investing abroad.

Capital Markets and Portfolio Investment

Credit is available on market terms, and foreigners are allowed to borrow freely on the local market at market-determined rates of interest.  A relatively effective regulatory system was established to encourage and facilitate portfolio investment. Jamaica has had its own stock exchange, the Jamaica Stock Exchange (JSE), since 1969.  The JSE was rated the best performing stock exchange in the world, by Bloomberg, in 2015 and again in 2018. The Financial Services Commission and the Bank of Jamaica (BOJ), the central bank, regulate these activities.  Jamaica respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions.

Money and Banking System

At the end of 2018 there were 11 supervised deposit-taking institutions consisting of eight commercial banks, one merchant bank (Licensed under the Financial Institutions Act) and two building societies.  The number of credit unions shrank from 47 at the end of 2009 to 26 at the end of 2018. In the BOJ’s January 2019 report, commercial banks held assets of almost USD 11 billion at the end of September 2018.  Non-performing loans (NPL) of USD 155 million at end December 2018, were 2.5 percent of total loans. Three of the country’s eight commercial banks are foreign-owned. After a financial sector crisis in the mid-1990s led to consolidations, the sector has remained largely stable.

In October 2018, the GOJ took legislative steps to modernize and make the central bank operationally independent through the tabling of amendments to the Bank of Jamaica (BOJ) Act. The modernization program includes, inter alia, the institutionalization of the central bank independence, improved governance, and the transitioning of monetary policy towards inflation targeting.  These developments follow previous strengthening of the BOJ, in 2015, when it undertook independent responsibility for banking supervision. Jamaica’s financial governance framework is in line with international standards and legislative amendments continue to enhance the BOJ’s regulatory powers.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions on holding funds or on converting, transferring, or repatriating funds associated with an investment.  In 2017, the BOJ implemented a new system called the BOJ Foreign Exchange Intervention & Trading Tool (B-FXITT) for the sale and purchase of foreign exchange (FX) to market players.  The new system is a more efficient and transparent way of intervening in the FX market to smooth out demand and supply conditions.

Investment-related funds are freely convertible to regularly traded currencies, particularly into United States and Canadian dollars and British pounds.  However, foreign exchange transactions must be conducted through authorized foreign exchange dealers, “cambios,” and bureau de change. Foreign exchange is generally available and investors are free to remit their investment returns.

Remittance Policies

The country’s financial system is fully liberalized and subject to market conditions.  There is no required waiting period for the remittance of investment returns. Any person or company can purchase instruments denominated in foreign currency.  There are no restrictions or limitations on the inflow or outflow of funds for the remittance of profits or revenue. The country does not possess the financial muscle to engage in currency manipulation.     

Jamaica was listed among the Major Money Laundering Jurisdictions in the U.S. Department of State’s 2018 International Narcotics Control Strategy Report (INCSR).

The Caribbean Financial Action Task Force made public Jamaica’s fourth round Mutual Evaluation Report (MER) in January 2017 (https://www.cfatf-gafic.org/index.php/documents/4th-round-meval-reports  ).  Jamaica entered into an Observation Period until October 2019 to address deficiencies addressed in the MER.  Should Jamaica not address deficiencies listed in the MER, it will enter a formal monitoring period by the Financial Action Task Force.

Sovereign Wealth Funds

Jamaica does not have a sovereign wealth fund or an asset management bureau.

As a condition of Jamaica’s Stand-By Agreement with the IMF, the GOJ is reforming the public sector to include State-Owned Enterprises (SOEs).  Jamaican SOEs are most active in the agriculture, mining, energy, and transport sectors of the economy. Of 162 public bodies, 56 are self-financing and are therefore considered SOEs as either limited liability entities established under the Companies Act of Jamaica or statutory bodies created by individual enabling legislation.  SOEs generally do not receive preferential access to government contracts. SOEs must adhere to the provisions of the GOJ (Revised) Handbook of Public Sector Procurement Procedures and are expected to participate in a bidding process to provide goods and services to the government. SOEs also provide services to private sector firms.  SOEs must report quarterly on all contracts above a prescribed limit to the Integrity Commission. Since 2002, SOEs have been subject to the same tax requirements as private enterprises and are required to purchase government-owned land and raw material and execute these transactions on similar terms as private entities.

Jamaica’s Public Bodies Management and Accountability Act (PBMA) requires SOEs to prepare annual corporate plans and budgets, which must be debated and approved by Parliament.  As part of the GOJ’s economic reform agenda, SOE performance is monitored against agreed targets and goals, with oversight provided by stakeholders including representatives of civil society.  The GOJ prioritized divestment of SOEs, particularly the most inefficient, as part of its IMF reform commitments. Private firms compete with SOEs on fair terms and SOEs generally lack the same profitability motives as private enterprises, leading to the GOJ’s absorbing the debt of loss-making public sector enterprises.

In 2012, the GOJ approved a Corporate Governance Framework (CGF) to promote improved performance by SOEs.  While Jamaican SOEs are not required to adhere to Organization of Economic Co-operation and Development (OECD) Guidelines on Corporate Governance, the CGF is based on international best practices and principles of corporate governance.

Jamaica’s public bodies report to their respective Board of Directors appointed by the responsible portfolio minister and while no general rules guide the allocation of SOE board positions, some entities allocate seats to specific stakeholders.  Under the CGF, persons appointed to boards should possess the skills and competencies required for the effective functioning of the entity. However, some board members are selected on the basis of their political affiliation. The Jamaican court system, while allegedly slow, is respected for being fair and balanced and in many cases has ruled against the GOJ and its agents.

Privatization Program

As a condition of Jamaica’s Stand-By Agreement with the IMF, the GOJ identified a number of public assets to be privatized from various sectors.  Jamaica actively courts foreign investors as part of its divestment strategy. In certain instances, the government encourages local participation.  Restrictions may be placed on certain assets due to national security considerations. Privatization can occur through sale, lease, or concession. Transactions are generally executed through public tenders but the GOJ reserves the right to accept unsolicited proposals for projects deemed to be strategic.  The Development Bank of Jamaica, which oversees the privatization program, is mandated to ensure that the process is fair and transparent. When some entities are being privatized, advertisements are placed locally and through international publications, such as the Financial Times, New York Times, and Wall Street Journal, to attract foreign investors.  Foreign investors won most of the privatization bids in the last decade.

While the time taken to divest assets depends on state of readiness and complexity, on average transactions take between 18 and 24 months.  The process involves pre-feasibility and due diligence assessments; feasibility studies; pre-qualification of bidders; and a public tender. In 2018, the GOJ signed a 25-year concession for the management and development of the Norman Manley International Airport in Kingston.  Other large privatizations include the 2003 privatization of Sangster International Airport in Montego Bay and the 2015 privatization of the Kingston Container Terminal port facility. The GOJ is in process of privatizing the Wigton Wind Farm, a 62-megawatt wind farm, through a public offering, and is developing a pipeline of additional privatization projects.  The GOJ also seeks to divest stagnant assets owned by large government entities such as the Urban Development Corporation and Factories Corporation of Jamaica.

List of current privatization transactions can be found at http://dbankjm.com/current-transactions/  

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

Source for Host Country Data: *Statistical Institute of Jamaica
http://statinja.gov.jm/NationalAccounting/Annual/NewAnnualGDP.aspx  

**Jamaica Promotions Corporation (JAMPRO)

Table 3: Sources and Destination of FDI

Source: Jamaica Promotions Corporation (JAMPRO)

Table 4: Sources of Portfolio Investment

Data not available.

Economic and Commercial Section
142 Old Hope Road
Kingston 6, Jamaica
Telephone: +1 876-702-6000
Email: kingstoncommercial@state.gov

Policies Toward Foreign Direct Investment

The Government of Trinidad and Tobago (GOTT) desires foreign direct investment and has traditionally welcomed U.S. investors. The Embassy is familiar with cases where the GOTT did not follow through as expected on assurances made to U.S. firms, due to either a lack of capacity or  allegations of corruption.

Foreign ownership of companies is permitted under the Foreign Investment Act and there are no laws that discriminate against foreign investors by prohibiting, limiting, or conditioning foreign investment in any economic sectors. Approval of a Foreign Investment Application by the Ministry of Finance is required in certain cases. Some U.S. firms have encountered difficulty at this stage.

TT has an Investment Promotion Agency, known as InvesTT, whose role is to attract and facilitate business investment throughout the decision-making process, easing the process of setting up a business and providing after-care services once the business is established. The U.S. Embassy of TT is not aware of any formal investment retention strategies.

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 by the Ministry of Finance (in Trinidad) or the Tobago House of Assembly (in Tobago).

The U.S. Embassy of TT 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. 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.

Other Investment Policy Reviews

The government has not undergone any third-party investment policy reviews in the past three years.

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 overall. However, more work needs to be done to achieve efficient administrative procedures and dispute resolution. Trinidad and Tobago is ranked 158 out of 190 countries for registering property, 174 out of 190 countries for enforcing contracts, and 166 out of 190 for payment of taxes, representing a deterioration of indicators that reflect a difficulty of doing business.

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 information on how to register a business. 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 registration website. According to GER, two areas for improvement are:

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

Business registration requires completion of seven procedures over a period of 10 days. The agencies with which a company must typically register include:

• Companies registry
• The OfficeWorks Limited
• Board of Inland Revenue
• National Insurance Board
• Value Added Tax (VAT Office, Board of Inland Revenue

Outward Investment

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

Capital Markets and Portfolio Investment

In general, the government welcomes foreign portfolio investment.TT has its own stock market, and has an established regulatory framework to encourage and facilitate portfolio investment. There is sufficient liquidity in the markets to enter and exit sizable positions. Existing policies facilitate the free flow of financial resources into the product and factor markets.

The government and central bank respect IMF article VIII by refraining from restrictions on payment and transfers for current international transactions; however, shortages of foreign exchange can cause delays in obtaining funds for transfer. A full range of credit instruments is available to the private sector. There are no restrictions on borrowing by foreign investors. 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.

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 government amended its Securities Act in hopes of supporting fair and efficient capital markets. The estimated total assets of TT’s banks in 2018 is approximately USD20.7 billion. The five largest banks’ assets are estimated at USD8.4 billion.

TT has a central bank system. 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 lost correspondent banking relationships over the past three years. There are no restrictions on a foreigner’s ability to establish a bank account.

Foreign Exchange and Remittances

Foreign Exchange

While there are no formal restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment, 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 three to nine months.

Funds associated with any form of investment can be freely converted into any world currency pending availability.

Trinidad and Tobago adopted a floating exchange rate regime in 1993, which means the value of the TT dollar appreciates or depreciates in response to changes in supply and demand conditions in the foreign exchange market and the intervention policy of the central bank. The currency is unofficially pegged to the U.S. dollar.

Remittance Policies

There are no recent changes or plans to change investment remittance policies that tighten or relax access to foreign exchange for investment remittances.

While there are no official time limitations on remittances, timeliness of remittances will depend on foreign currency availability.

Sovereign Wealth Funds

TT established its sovereign wealth fund (SWF), also known as the Heritage and Stabilization Fund (HSF) in 2007 as the country’s sole sovereign wealth fund. At present, the value of the fund is approximately USD5.8 billion. 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 SWF follows the voluntary code of good practices known as the Santiago Principles. TT participates in the IMF-hosted International Working Group on Sovereign Wealth Funds. The 2007 legislation prohibits domestic or petroleum-related investments.

TT has 55 state-owned enterprises (SOEs), comprised of 43 wholly owned companies, eight majority-owned, and four in which the government has a minority share. SOEs are active in sectors like energy, manufacturing, agriculture, tourism, financial services, transportation, and communication. Information on the total assets of SOE’s, total net income of SOE’s and number of people employed by SOE’s is not available. The Investments Division of the Ministry of Finance also has the responsibility to appoint directors to the board of state enterprises. SOEs are often informally or explicitly obligated to consult with government officials before making major business decisions. According to TT’s constitution, the government is entitled to:

1. exercise control directly or indirectly over the affairs of the enterprise
2. appoint a majority of directors of the board of directors of the enterprise
3. hold at least 50 per cent of the ordinary share capital of the enterprise

A published list of SOEs for 2019 can be found here: https://www.finance.gov.tt/state-enterprises-investment-programme-2019/  . In sectors that are open to both the private sector and foreign competition, SOEs are sometimes favored for government contracts.

Privatization Program

TT does not have a privatization program in place, but the government has issued initial public offerings on various state-owned companies in order to obtain revenue, primarily in the finance and energy sectors. Foreign investors can participate in the initial public offerings.

The purchase of initial public offering shares on past occasions was open to the public, easy to understand, non-discriminatory and transparent. Please consult https://ngc.co.tt/media/news/ngl-initial-public-offering-brokerage-details/   for additional information.

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

* Source for Host Country Data: Central Bank of Trinidad and Tobago; Central Statistical Office D Suppressed to avoid disclosure of data on individual companies.

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.

Matt Ciesielski
Economic and Commercial Officer
15 Queen’s Park West
Port of Spain, Trinidad
Telephone: +1 (868) 622-6371
Email: poscommercial@state.gov