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Antigua and Barbuda

Executive Summary

Antigua and Barbuda is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU). According to Eastern Caribbean Central Bank (ECCB), as of December 31, 2019, Antigua and Barbuda had an estimated Gross Domestic Product (GDP) in market prices of $1.72 billion in 2019, with forecast growth of 6.75 percent in 2020. The economy of Antigua and Barbuda remained buoyant, driven mainly by increased tourist arrivals and ongoing public and commercial construction projects. However, due to the coronavirus pandemic, these projections have been revised downwards significantly, with expected declines in revenues and increased spending on imports such as medicine, medical equipment, and food. The government has stated it remains committed to improving the business climate to attract more foreign investment and stimulate growth.

In the World Bank’s 2020 Doing Business Report, Antigua and Barbuda ranks 113th out of 190 countries rated. The scores remained relatively unchanged from the previous year, but highlighted some improvements in starting a business.

The government strongly encourages foreign direct investment (FDI), particularly in industries that create jobs and earn foreign exchange. Through the Antigua and Barbuda Investment Authority (ABIA), the government facilitates and supports FDI in the country and maintains an open dialogue with current and potential investors. All potential investors are afforded the same level of business facilitation services.

While the government welcomes all FDI, tourism and related services, manufacturing, agriculture and fisheries, information and communication technologies, business process outsourcing, financial services, health and wellness services, creative industries, education, yachting and marine services, real estate, and renewable energy have been identified by the government as priority investment areas.

There are no limits on foreign control of investment and ownership in Antigua and Barbuda. Foreign investors may hold up to 100 percent of an investment.

Antigua and Barbuda’s legal system is based on British common law. There is currently an unresolved dispute regarding expropriation of an American-owned property. For this reason, the U.S. government recommends continued caution when investing in real estate in Antigua and Barbuda.

In 2017, the government signed an intergovernmental agreement in observance of the U.S. Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Antigua and Barbuda to report the banking information of U.S. citizens.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 Not ranked http://www.transparency.org/
research/cpi/overview
World Bank’s Doing Business Report 2019 113 of 190 http://www.doingbusiness.org/
en/rankings
Global Innovation Index 2019 Not ranked https://www.globalinnovationindex.org/
analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2018 7.0 http://apps.bea.gov/international/
factsheet/
World Bank GNI per capita 2018 15,890 http://data.worldbank.org/indicator/
NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The government of Antigua and Barbuda strongly encourages FDI, particularly in industries that create jobs, enhance economic activity, earn foreign currency, and have a positive impact on its citizens. Diversification of the economy remains a priority.

Through the ABIA, the government facilitates and supports FDI in the country and maintains an open dialogue with current and potential investors. While the government welcomes all FDI, it has identified tourism and related services, manufacturing, agriculture and fisheries, information and communication technologies, business process outsourcing, financial services, health and wellness services, creative industries, education, yachting and marine services, real estate, and renewable energy as priority investment areas.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign control of investment and ownership in Antigua and Barbuda. Foreign investors may hold up to 100 percent of an investment, and a local or foreign entrepreneur needs about 40 days from start to finish to transfer the title on a piece of property. In 1995, the government established a permanent residency program to encourage high-net-worth individuals to establish residency in Antigua and Barbuda for up to three years. As residents, their income is free of local taxation. This program is separate from the Citizenship by Investment (CBI) program.

The ABIA evaluates all FDI proposals and provides intelligence, business facilitation, and investment promotion to establish and expand profitable business enterprises. The ABIA also advises the government on issues that are important to the private sector and potential investors to increase the international competitiveness of the local economy.

The government of Antigua and Barbuda treats foreign and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

Other Investment Policy Reviews

The OECS, of which Antigua and Barbuda is a member, has not conducted a trade policy review in the last three years.

Business Facilitation

Established in 2006, the ABIA facilitates foreign direct investment in the aforementioned priority sectors and advises the government on the formation and implementation of policies and programs to attract investment. The ABIA provides business support services and market intelligence to all investors. Its website is: http://investantiguabarbuda.org/ . It also offers an online guide that is useful for navigating the laws, rules, procedures, and registration requirements for foreign investors. The guide is available at http://www.theiguides.org/public-docs/guides/antiguabarbuda .

All potential investors applying for government incentives must submit their proposals for review by the ABIA to ensure the project is consistent with national interests and provides economic benefits to the country.

In the World Bank’s 2020 Doing Business Report, Antigua and Barbuda ranks 130th out of 190 in the ease of starting a business. The establishment of a new business takes nine procedures and 19 days to complete. This time was reduced by three days because the government made improvements to the exchange of information between public entities involved in company incorporation. The general practice is to retain a local attorney who prepares all the relevant incorporation documents. A business must register with the Intellectual Property and Commerce Office (IPCO), the Inland Revenue Department, the Medical Benefits Scheme, the Social Security Scheme, and the Board of Education. The government continues to explore ways to further expedite the process.

The government of Antigua and Barbuda continues to advance the work of the Antigua and Barbuda Business Innovation Center (ABBIC), a two-year project to assist small business and entrepreneurs. The ABBIC includes a business incubator and provides education, training, and investment opportunities to new and existing businesses. The Innovation Center focuses on businesses in the healthcare, tourism, agriculture and environment sectors, as well as projects submitted by women.

Through the Prime Minister’s Entrepreneurial Development Program (EDP), people with disabilities can apply for a special incentive grant. The EDP will also provide opportunities for female and young entrepreneurs in keeping with government’s mandate to support the growth of niche markets, innovation, the intellectual capital and ingenuity of its citizens, and the development of micro-, small- and medium-sized enterprises.

Outward Investment

Although the government of Antigua and Barbuda prioritizes investment retention as a key component of its overall economic strategy, there are no formal mechanisms in place to achieve this. In order to sustain future economic growth, Antigua and Barbuda’s economy depends on significant FDI.

There is no restriction on domestic investors seeking to do business abroad. Local companies in Antigua and Barbuda are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS Economic Union and the Caribbean Community Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

3. Legal Regime

Transparency of the Regulatory System

Antigua and Barbuda seeks to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety. The government of Antigua and Barbuda publishes laws, regulations, administrative practices, and procedures of general application and judicial decisions that affect or pertain to investments or investors in Antigua and Barbuda. Where the national government establishes policies that affect or pertain to investments or investors that are not expressed in laws and regulations or by other means, the national government will make them publicly available.

Rulemaking and regulatory authority lies with the bicameral parliament of the government of Antigua and Barbuda. The House of Representatives has 19 members, 17 members elected for a five-year term in single-seat constituencies, one ex-officio member, and one Speaker. The Senate has 17 appointed members.

Respective line ministries develop the relevant national laws and regulations, which are then drafted by the Ministry of Legal Affairs. Laws relating to the ABIA and the CBI program are the main laws relevant to FDI. The laws of Antigua and Barbuda are available online at http://laws.gov.ag/new/index.php . This website contains the full text of laws already in force, as well as those parliament is currently considering.

Although, some draft bills are not subject to public consultation, input from various stakeholder groups may be considered. The process is detailed at: http://www.laws.gov.ag/makinglaws.htm  . The government encourages stakeholder organizations to support and contribute to the legal development process by participating in technical committees and commenting on drafts.

Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms. The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession.

The constitution provides for the independent Office of the Ombudsman to guard against abuses of power by government officials. The Ombudsman is responsible for investigating complaints about acts or omissions by government officials that violate the rights of members of the public.

The ABIA has the main responsibility for investment supervision, and the Ministry of Finance and Corporate Governance monitors investments to collect information for national statistics and reporting purposes.

Antigua and Barbuda’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to implement all appropriate measures to fulfill its various treaty obligations. Therefore, the eight member states and territories of the ECCU tend to enact laws uniformly, although there may be some minor differences in implementation. The enforcement mechanisms of these regulations include penalties and other sanctions. The ABIA can revoke an issued Investment Certificate if the holder fails to comply with certain stipulations detailed in the Investment Authority Act and its regulations.

The government of Antigua and Barbuda has stated its commitment to achieving better development outcomes through improved transparency and accountability in the management of public finances. As a member of the ECCU Monetary Council, the government of Antigua and Barbuda is committed to reaching the debt ratio target of 60 percent by 2030. The government hopes to achieve this by minimizing debt servicing, budgetary costs, and risk exposure to government while making every effort to maintain debt at a sustainable level.

The government enacted the Miscellaneous Amendments Act at the end of 2018, which ensured a number of important international standards were reflected in national legislation. The government has also reduced the proportion of revenue required to pay the interest on government debt. The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Antigua and Barbuda to be largely compliant.

The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.

International Regulatory Considerations

As a member of the OECS and the ECCU, Antigua and Barbuda subscribes to principles and policies outlined in the Revised Treaty of Basseterre. The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region. Thus, Antigua and Barbuda is obligated to implement regionally developed regulations, such as legislation passed under the authority of the OECS, unless it seeks specific concessions to do otherwise.

The Antigua and Barbuda Bureau of Standards is a statutory body that prepares and promulgates standards in relation to goods, services, processes, and practices. Antigua and Barbuda is a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade and is obligated to notify the Committee of any draft new and updated technical regulations

Antigua and Barbuda ratified the WTO Trade Facilitation Agreement (TFA) in November 2017. Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade. The TFA is intended to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain. Antigua and Barbuda has already implemented a number of TFA requirements. A full list is available at: https://www.tfadatabase.org/members/antigua-and-barbuda/measure-breakdown  .

The Advanced Cargo Information System is a CARICOM project that seeks to improve the capability to track cargo efficiently. Antigua and Barbuda is one of three regional pilot countries who have already enacted the enabling legislation. Antigua and Barbuda has fully implemented the Automated System for Customs Data. Importers are no longer required to produce a Certificate of Good Standing (Tax Compliance Certificate) for the importation of goods. This has reduced the time needed to clear goods. Legislative changes to the Customs Control and Management Act enabled the electronic processing of manifests. The government will soon introduce a Maritime Single Window System and an Authorized Economic Operators Programme to improve trade facilitation. These two programs will allow pre-approved businesses and importers to fast-track the clearance of their goods.

Legal System and Judicial Independence

Antigua and Barbuda bases its legal system on the British common law system. The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice. The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal. The High Court hears criminal and civil (commercial) matters and makes determinations on the interpretation of the Constitution. Parties may appeal first to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members. The final appellate authority is the Judicial Committee of the Privy Council of the United Kingdom.

The Caribbean Court of Justice (CCJ) has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. Currently, Antigua and Barbuda is subject only to the original jurisdiction of the CCJ.

Antigua and Barbuda is a party to the WTO. The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes. Antigua and Barbuda brought a case against the United States before the WTO concerning the cross-border supply of gambling and betting services. The WTO ruled in favor of Antigua and Barbuda, but agreement on settlement terms remains outstanding.

Laws and Regulations on Foreign Direct Investment

The ABIA provides guidance on the relevant laws, rules, procedures, and reporting requirements for investors. These are available at http://www.theiguides.org/public-docs/guides/antiguabarbuda  and http://investantiguabarbuda.org/ .

The government discontinued concessions provided under the Tourism and Business Special Incentives Act (2013) in 2018. The government is currently reviewing its concessions regime.

Citizenship by Investment

Under the CBI program, foreign individuals can obtain citizenship in accordance with the Citizenship by Investment Act of 2013, which grants citizenship (without voting rights) to qualified investors. Applicants are required to undergo a due diligence process before citizenship can be granted. The minimum contribution for investors under the CBI is a contribution of $100,000 to the National Development Fund for a family of up to four people and $125,000 for a family of five, with additional contributions of $15,000 per person for up to four additional family members. Individual applicants can also qualify for the program by buying real estate valued at $400,000 or more or making a business investment of $1.5 million. Alternatively, at least two applicants can propose to make a joint investment in an approved business with a total investment of at least $5 million. Each investor must contribute at least $400,000 to the joint investment. CBI investors must own property for a minimum of five years before selling it. A newer fourth option is a contribution of $150,000 to the University of the West Indies (UWI) Fund for a family of up to four people, which entitles one member of the family to a one year tuition-only scholarship at UWI’s Five Islands campus. All applicants must also pay relevant government and due diligence fees, as well as providing a full medical certificate, a police certificate, and evidence of the source of funds. The government announced changes to the fee structure in March 2020, reducing fees for the addition of dependent children under six on approved applications to $10,000 and for dependent children ages six to 17 to $20,000, effective until October 31, 2020. Further information is available at: http://www.cip.gov.ag/ .

Competition and Anti-Trust Laws

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM states. Member states are required to establish and maintain a national competition authority for implementing the rules of competition. CARICOM established a Caribbean Competition Commission (CCC) to rule on complaints of anti-competitive cross-border business conduct. CARICOM competition policy addresses anti-competitive business conduct such as collusion between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within the Community, and actions by which an enterprise abuses its dominant position within the Community. Antigua and Barbuda does not have any legislation regulating competition. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill is with the Ministry of Legal Affairs for review.

In March 2019, the CCC preliminarily ruled that parts of a proposed sale of the Bank of Nova Scotia’s banking assets in nine countries in the Caribbean, including OECS member countries, to Republic Financial Holdings and life insurance operations in two other Caribbean countries to Sagicor Financial Corporation could have an anti-competitive impact in at least three member states, including Antigua and Barbuda which raised numerous objections to the sale. In November 2019, the Bank of Nova Scotia announced that it had suspended the sale of its Antigua and Barbuda operations and would continue to run its operations in the jurisdiction.

Expropriation and Compensation

According to the Investment Authority Act of 2006, investments in Antigua and Barbuda will not be nationalized, expropriated, or subject to indirect measures having an equivalent effect, except as necessary for the public good, in accordance with due process of law, on a non-discriminatory basis, and accompanied by prompt, adequate, and effective compensation. Compensation in such cases is the fair market value of the expropriated investment immediately before the expropriation or the impending expropriation became public knowledge, whichever is earlier. Compensation shall include interest from the date of dispossession of the expropriated property until the date of payment. Compensation is required to be paid without delay in convertible currency, and be effectively realizable and freely transferable.

There is an unresolved dispute regarding the expropriation of an American-owned property. Although the government of Antigua and Barbuda paid the former property owner a total of $39.8 million in compensation, it still owes interest payments of $20 million. In March 2019, a judge dismissed a case bought by the former property owners against the government for payment of the outstanding balance. However, the owners intend to appeal. For this reason, the U.S. government recommends continued caution when investing in real estate in Antigua and Barbuda.

Dispute Settlement

ICSID Convention and New York Convention

Antigua and Barbuda is not a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. However, it is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Arbitration Convention. Private parties may use international or national arbitration if specified in contracts. The Arbitration Act Cap. 33 (1975) is the main legislation which governs arbitration in Antigua and Barbuda. It adheres to the New York Arbitration Convention.

Investor-State Dispute Settlement

Investors may use national or international arbitration to resolve contractual disputes with the state. Antigua and Barbuda also has bilateral investment treaties with Germany and the UK that recognize binding international arbitration of investment disputes. Antigua and Barbuda does not have a bilateral investment treaty or a free trade agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in Antigua and Barbuda.

Antigua and Barbuda ranks 36th out of 190 countries in enforcing contracts in the 2020 World Bank Doing Business Report. According to the report, dispute resolution in Antigua and Barbuda generally takes an average of 476 days. The slow court system and bureaucracy are widely seen as the main hindrances to timely resolutions to commercial disputes. Through the Arbitration Act, the local courts recognize and enforce foreign arbitral awards issued against the government.

International Commercial Arbitration and Foreign Courts

As mandated by the Arbitration Act, alternative dispute mechanisms are available as a means for settling disputes between two private parties. Parties may also use voluntary mediation or conciliation. The Arbitration Act mandates the legal recognition and enforcement of judgments of foreign courts by local courts. Thus, the High Court of Antigua and Barbuda recognizes and enforces foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal provides meditation on commercial contracts.

Bankruptcy Regulations

Under the Bankruptcy Act (1975), Antigua and Barbuda has a bankruptcy framework that grants certain rights to debtors and creditors. The World Bank’s 2020 Doing Business Report addresses the strength of the framework and its limitations in resolving insolvency in Antigua and Barbuda. Antigua and Barbuda ranks 132nd of 190 countries in this area.

4. Industrial Policies

Investment Incentives

In 2018, the government of Antigua and Barbuda made a policy decision to stop granting waivers for property taxes. Foreign investors can still access other concessions, including the manufacturers’ incentive that grants exemption from the payment of import duties, revenue recovery charge, and sales tax on raw materials, packaging materials, tools, equipment, and machinery.

The government of Antigua and Barbuda has been proactively pursuing public-private partnerships (PPPs) through the National Asset Management Company (NAMCO). NAMCO is a wholly owned government entity that holds the government’s stake in joint ventures and manages the investment proceeds that accrue.

Foreign Trade Zones/Free Ports/Trade Facilitation

The government established the Antigua and Barbuda Free Trade and Processing Zone (Free Zone) in 1994. A commission, acting as a private enterprise, administers the Free Zone. The Free Zone is part of a government initiative to diversify the economy. The commission is mandated to attract investment in priority areas.

Performance and Data Localization Requirements

The government does not mandate employment of its citizens by foreign investors. However, the provisions of the Labor Code outline requirements for acquiring a work permit and prohibit anyone who is not a citizen of Antigua and Barbuda (or the OECS) to work without a work permit. In practice, work permits may be granted to senior managers if no qualified Antiguan nationals are available for the post. There are no excessively onerous visa or residency requirements.

As a member of the WTO, Antigua and Barbuda is party to the Agreement to the Trade Related Investment Measures. While there are no formal performance requirements, the government encourages investments that will create jobs and increase exports and foreign exchange earnings. There are no requirements for participation either by nationals or by the government in foreign investment projects. There is no requirement that enterprises must purchase a fixed percentage of goods or technology from local sources, but the government encourages local sourcing. Foreign investors receive the same treatment as citizens. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (for example, backdoors into hardware and software or keys for encryption).

5. Protection of Property Rights

Real Property

The government owns 55 percent of the country’s land, and the remaining 45 percent is privately owned. The Lands Division in the Ministry of Agriculture, Lands, Fisheries and Barbuda Affairs is the custodian of Crown lands on behalf of the government.

By custom, the residents of Barbuda owned all land on Barbuda communally. In 2018, the government amended the Barbuda Land Act to allow Barbudans to have private ownership of land on Barbuda. The government then announced plans to repeal the Barbuda Land Act, replacing it with a new Crown Land Regulation Act that would allow private ownership of land in Barbuda by non-Barbudans. Many Barbudans are opposed to this legislation, which would allow the government to sell land on Barbuda for the commercial development of tourism facilities. Barbudan representatives have filed a legal challenge to the constitutionality of the new legislation in the Eastern Caribbean Supreme Court and continue to oppose the government’s actions.

Both citizens and non-citizens can lease or buy land on the island of Antigua from the government or the private sector. Land sold to non-citizens is subject to the Non-Citizen Land Holding Regulation Act that requires the buyer to obtain a license to purchase land. Buyers are advised to consult with a local attorney. All land titles and purchases must be registered at the Land Registry.

The Town and Country Planning office of the Development Control Authority designates land use areas, including for commercial, agricultural, industrial, or tourism use. The government’s Free Trade and Processing Zone manages lands and facilities which are geared towards attracting foreign direct investment in export sectors.

Because Antigua and Barbuda is a member of the ECCU, lending institutions in Antigua and Barbuda generally follow the guidelines published by the ECCB. However, the lack of capital market depth in the sub-region makes the use of securitization difficult. The country could potentially benefit from initiatives to expand the range of financial products offered by the Eastern Caribbean Securities Exchange (ECSE) and the Eastern Caribbean Home Mortgage Bank.

In the World Bank’s 2020 Doing Business Report, Antigua and Barbuda ranks 124th out of 190 countries for ease of registering property. It takes about 32 days to complete seven necessary procedures, and the cost is about 10.8 percent of the property value.

Intellectual Property Rights

Antigua and Barbuda has an extensive legislative framework supporting the protection of intellectual property rights (IPR). However, enforcement efforts are inconsistent. Antigua and Barbuda is a member of the United Nations World Intellectual Property Organization (WIPO). It is a signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, and the Berne Convention for the Protection of Literary and Artistic Works.

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the CSME commits all 15 members to implement stronger intellectual property protection and enforcement. The CARIFORUM-EU EPA contains the most detailed obligations regarding intellectual property in any trade agreement to which Antigua and Barbuda is a party. The EPA recognizes the protection and enforcement of IPR.. Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties, and of the WTO Agreement on Trade Related Aspects of Intellectual Property (TRIPS).” As a member of the WTO, Antigua and Barbuda recognizes the WTO TRIPS Agreement.

The Comptroller of Customs leads enforcement and prevention efforts against counterfeit goods, which include detention, seizure, and forfeiture. The Royal Police Force of Antigua and Barbuda has extensive powers of search and seizure in the investigation of alleged infringements, and has the power to confiscate suspected infringing copies.

Antigua and Barbuda is not included in the United States Trade Representative Special 301 Report or the Notorious Markets List. For additional information about treaty obligations and points of contact at local intellectual property offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en  .

6. Financial Sector

Capital Markets and Portfolio Investment

As a member of the ECCU, Antigua and Barbuda is also a member of the ECSE and the Regional Government Securities Market. The ECSE is a regional securities market established by the ECCB and licensed under the Securities Act of 2001, a uniform regional body of legislation governing securities market activities. As of March 31, 2019, there were 149 securities listed on the ECSE, comprising 128 sovereign debt instruments, 13 equities, and eight corporate bonds. Market capitalization stood at $1.8 billion. This represents a significant decrease compared to the previous year and is attributed mainly to the delisting of CIBC First Caribbean International Bank Ltd, whose market capitalization previously accounted for 79.2 percent of total capitalization. Antigua and Barbuda is open to portfolio investment.

Antigua and Barbuda accepted the obligations of Article VIII of the International Monetary Fund Agreement. Sections 2, 3 and 4, and maintains an exchange system free of restrictions on making international payments and transfers. The government normally does not grant foreign tax credits except in cases where taxes are paid in a Commonwealth country that grants similar relief for Antigua and Barbuda taxes, or where an applicable tax treaty provides a credit. The private sector has access to credit on the local market through loans, purchases of non-equity securities, and trade credits, as well as other accounts receivable that establish a claim for repayment.

Money and Banking System

Antigua and Barbuda is a signatory to the 1983 agreement establishing the ECCB. The ECCB controls Antigua and Barbuda’s currency and regulates its domestic banks.

The Banking Act 2015 is a harmonized piece of legislation across the ECCU member states. The ECCB and the Ministers of Finance of member states jointly carry out banking supervision under the Act. The Ministers of Finance usually act in consultation with the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.

Domestic and foreign banks can establish operations in Antigua and Barbuda. The Banking Act requires all commercial banks and other institutions to be licensed. The ECCB regulates financial institutions. As part of supervision, licensed financial institutions are required to submit monthly, quarterly, and annual performance reports to the ECCB. In its latest annual report, the ECCB listed the commercial banking sector in Antigua and Barbuda as stable. Assets of commercial banks totaled $2.07 billion at the end of December 2019 and remained relatively consistent during the previous year. The reserve requirement for commercial banks was 6 percent of deposit liabilities.

Antigua and Barbuda remains well served by bank and non-bank financial institutions. There are minimal alternative financial services offered. Some people still participate in informal community group lending, but the practice is declining.

The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S. and European banks. CARICOM remains committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to continue to monitor the issue.

The government of Antigua and Barbuda has announced plans to introduce legislation to operate and regulate blockchain technology as an integral part of aspirations to develop Antigua and Barbuda as a regional center for blockchain and cryptocurrency. The government intends to collaborate with global oversight bodies in the implementation of international best practices that will make the jurisdiction attractive to international business.

Foreign Exchange and Remittances

Foreign Exchange

Antigua and Barbuda is a member of the ECCU and the ECCB. The currency of exchange is the Eastern Caribbean dollar (XCD). As a member of the OECS, Antigua and Barbuda has a foreign exchange system that is fully liberalized. The Eastern Caribbean dollar has been pegged to the United States dollar at a rate of XCD 2.70 to USD $1.00 since 1976. As a result, the Eastern Caribbean dollar does not fluctuate, creating a stable currency environment for trade and investment in Antigua and Barbuda.

Remittance Policies

Companies registered in Antigua and Barbuda have the right to repatriate all capital, royalties, dividends, and profits free of all taxes or any other charges on foreign exchange transactions. The government levies withholding taxes on non-resident corporations and individuals receiving income in the form of dividends, preferred share dividends, interest and rentals, management fees, and royalties, as well as on interest on bank deposits to non-resident corporations. A person must be present on the island for no less than four years without interruption to be considered a resident. Antigua and Barbuda is a member of the CFATF.

In February 2017, the government of Antigua and Barbuda signed an intergovernmental agreement in observance of the FATCA, making it mandatory for banks in Antigua and Barbuda to report the banking information of U.S. citizens.

Sovereign Wealth Funds

Neither the government of Antigua and Barbuda nor the ECCB, which Antigua and Barbuda is a member, maintains a sovereign wealth fund.

7. State-Owned Enterprises

State-owned enterprises (SOEs) in Antigua and Barbuda are governed by their respective legislation and do not generally pose a threat to investors, as they are not designed for competition. The government established many SOEs to create economic activity in areas where the private sector is perceived to have very little interest. A list of SOEs can be found at: http://ab.gov.ag/detail_page.php?page=1  .

SOEs are headed by boards of directors to which senior managers report. In 2016, parliament passed the Statutory Corporations (General Provisions) Act, which specifies the ministerial responsibilities in the appointment and termination of board members, decisions of the board, and employment in these SOEs. In order to promote diversity and independence on SOE boards, professional associations, non-governmental organizations (NGOs), and civil society may nominate directors for boards.

Privatization Program

Antigua and Barbuda does not have a targeted privatization program.

8. Responsible Business Conduct

Responsible business conduct by producers and consumers is positively regarded in Antigua and Barbuda. The private sector is involved in projects that benefit society, including in support of environmental, social, and cultural causes. Individuals benefit from business-sponsored initiatives when local and foreign-owned enterprises pursue volunteer opportunities and make monetary or in-kind donations to local causes.

The NGO community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental, and community projects. The government at times partners with NGOs in their activities and encourages philanthropy.

9. Corruption

The law provides criminal penalties for corruption by officials, and the government generally implements these laws if corruption is proven. Allegations of corruption against government officials in Antigua and Barbuda are fairly common. Both major political parties frequently accused the other of corruption, but investigations yielded few, if any results. Antigua and Barbuda is party to the Inter-American Convention against Corruption and the United Nations Anti-Corruption Convention.

The Integrity in Public Life Act requires all public officials to disclose all income, assets (including those of spouses and children), and personal gifts received while in public office. An Integrity Commission, established by the Act and appointed by the Governor General, receives and investigates complaints regarding noncompliance with or violations of this law or of the Prevention of Corruption Act. As the only agency charged with combating corruption, the Commission was independent but understaffed and under-resourced. Critics stated the legislation was inadequately enforced and the act should be strengthened.

The Freedom of Information Act gives citizens the statutory right to access official documents from public authorities and agencies, and it created a commissioner to oversee the process. In practice, citizens found it difficult to obtain documents, possibly due to government funding constraints rather than obstruction. The Act created a special unit mandated to monitor and verify disclosures. By law, the disclosures are not public. There are criminal and administrative sanctions for noncompliance.

Resources to Report Corruption

Radford Hill
Chairman, Integrity Commission
R.I.O.A. (Francis Trading) Building,
Ground Floor, High Street
St. John’s, Antigua (268) 462-5939
(268) 462-5939
clients@lawhillandhill.com

The Office of National Drug and Money Laundering Control Policy is the independent law enforcement agency with specific authority to investigate reports of suspicious activity concerning specified offences and the proceeds of crime. http://ondcp.gov.ag/laws/regulation/ 
http://ondcp.gov.ag/about/overview-of-ondcp/ 

Lt Col Edward Croft
Director, Office of National Drug and Money Laundering Control Policy
Camp Blizzard, St. George’s, Antigua
(268) 562-3255/6
ondcp@candw.ag

10. Political and Security Environment

Antigua and Barbuda does not have a recent history of politically-motivated violence or civil disturbance. Elections are peaceful and regarded as being free and fair. The next general elections are constitutionally due by March 2023.

11. Labor Policies and Practices

Antigua and Barbuda had an employed labor force of about 43,535 in 2019 with a literacy rate of approximately 90 percent. The minimum working age is 16 years. People under 18 must have a medical clearance to work and may not work later than 10 p.m. The Ministry of Labor, which conducts periodic workplace inspections, effectively enforces this law. The labor commissioner’s office also has an inspectorate that investigates child labor allegations.

Workers have the right to associate freely and to form labor unions. Approximately 60 percent of formal sector workers belong to a union. Unions are free to conduct activities without government interference. Labor unions form an important part of the membership of both political parties. The law provides for the right of public and private sector workers to organize and bargain collectively without interference.

The labor code provides for the right to strike, but the Industrial Relations Court may limit this right in a given dispute. Workers who provide essential services (including bus, telephone, port, petroleum, health, and safety workers) must give 21 days’ notice of intent to strike. Once either party to a dispute requests that the court mediate, strikes are prohibited under penalty of imprisonment. Because of the delays associated with this process, unions often resolve labor disputes before calling a strike. In addition, courts may issue an injunction against a legal strike when the national interest is threatened or affected. Labor law prohibits retaliation against strikers, and the government effectively enforces those laws. The labor code provides that the minister of labor may issue orders, which have the force of law, to establish a minimum wage. The minimum wage is $3.03 an hour for all categories of labor. In practice, the great majority of workers earn substantially more than the minimum wage.

The customary standard workweek was 40 hours in five days. The law provides that employers may not require workers to work more than a 48-hour, six-day workweek, and provides for 12 paid annual holidays. The law requires that employees be paid one and a half times the employees’ basic wage per hour for overtime work in excess of the standard workweek. The Ministry of Labor put few limitations on overtime, allowing it in temporary or occasional cases, but did not allow employers to make regular overtime compulsory.

Investors in Antigua and Barbuda are required to maintain workers’ rights and safeguard the environment. While there are no specific health and safety regulations, the Labor Code provides general health and safety guidance to Labor Ministry inspectors. The Labor Commission settles disputes over labor abuses, health, and safety conditions. The law gives the Labor Ministry the authority to require special safety measures, not otherwise defined in the law, to be put into place for worker safety. Antigua and Barbuda is party to the International Labor Convention on Occupational Safety and Health No. 155 of 1981.

The labor inspectorate enforced standards in all sectors, including the informal sector. The government enforced labor laws, including levying remedies and penalties of up to $1,850 (5,000 Eastern Caribbean dollars) for nonpayment of work. The government penalized overtime violations, but this was not always effective at deterring labor violations.

Workers have the right to report unsafe work environments without jeopardy to continued employment. Inspectors then investigate such claims, and workers may leave such locations without jeopardy to their continued employment.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

As a high-income country under World Bank criteria, Antigua and Barbuda does not qualify for DFC financing.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Please note that the following tables include FDI statistics from three different sources, and therefore will not be identical. Table 2 uses U.S. Department of Economic Affairs (BEA) data when available, which measures the stock of FDI by the market value of the investment in the year the investment was made (often referred to as historical value). This approach tends to undervalue the present value of FDI stock because it does not account for inflation. BEA data is not available for all countries, particularly if only a few U.S. firms have direct investments in a country. In such cases, Table 2 uses other sources that typically measure FDI stock in current value (or historical values adjusted for inflation). Even when Table 2 uses BEA data, Table 3 uses the IMF’s Coordinated Direct Investment Survey (CDIS) to determine the top five sources of FDI in the country. The CDIS measures FDI stock in current value, which means that if the United States is one of the top five sources of inward investment, U.S. FDI into the country will be listed in this table. That value will come from the CDIS and therefore will not match the BEA data.

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) ($M USD) 2019 1,727 2018 1,611 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A 2018 7 BEA data available at
https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
 
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2018 3 BEA data available at
https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
 
Total inbound stock of FDI as % host GDP N/A N/A 2018 59.6% UNCTAD data available at
https://unctad.org/en/Pages/DIAE/
World%20Investment%20Report/
Country-Fact-Sheets.aspx
 

* Source for Host Country Data: Eastern Caribbean Central Bank https://www.eccb-centralbank.org/statistics/dashboard-datas/ . All ECCB GDP figures for 2019 are estimates.

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

14. Contact for More Information

Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
Telephone Number: 246-227-4000
Email: BridgetownPolEcon@state.gov

Barbados

Executive Summary

Barbados is the largest economy in the Eastern Caribbean.  Barbados’ Gross Domestic Product (GDP) was USD 5.03 billion in 2018.  The government of Barbados entered into a standby arrangement with the International Monetary Fund (IMF) in late 2018.  The USD 290 million Barbados Economic Recovery and Transformation (BERT) program aims to decrease the debt to GDP ratio, strengthen the balance of payments, and stimulate growth in the economy.  While the government met its IMF targets, the program dampened income and spending power due to public sector layoffs, the introduction of new indirect taxes, and a decline in the construction sector.  The coronavirus pandemic has reduced the gains that were expected to strengthen Barbados’ economic position in the near term.  The impact of the pandemic on tourism, a mainstay of Barbados’ economy which generates almost 40 percent of GDP, has had ripple effects across the economy.  The IMF agreed to reduce Barbados’ primary surplus targets and to augment its Extended Fund Facility.

Barbados ranks 128th out of 190 countries rated in the 2020 World Bank Doing Business Report.  The report highlights some positive changes in getting electricity, trading across borders, and enforcing contracts but highlights that registering property has become more difficult.

The services sector continues to hold the largest potential for growth, especially in the areas of international financial services, information technology, global education services, health, and cultural services.  The gradual decline of the sugar industry has opened up land for other agricultural uses.  Investment opportunities exist in the areas of agroprocessing and alternative and renewable energy.  Uncertainty about the recovery prospects of the tourism, commercial aviation, and the cruise industry impacts the potential for projects in those sectors.

Barbados recently revised its tax regime to harmonize its domestic and international tax rates.  This was in response to an Organization for Economic Cooperation and Development (OECD) initiative that addressed harmful tax practices.  Some acts were repealed or amended, and some new measures were introduced.  For further details, see https://investbarbados.org/revisedtaxregime.php.

Barbados bases its legal system on the British common law system.  It does not have a bilateral investment agreement with the United States, but it does have a double taxation treaty and tax information exchange agreement.

In 2015, Barbados signed an intergovernmental agreement in observance of the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Barbados to report the banking information of U.S. citizens.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 30 of 175 http://www.transparency.org/
research/cpi/overview
World Bank’s Doing Business Report 2019 128 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2019  N/A https://www.globalinnovationindex.org/
analysis-indicator
U.S. FDI in partner country (M USD, historical stock positions) 2018 20,368 http://apps.bea.gov/international/factsheet/
World Bank GNI per capita (M USD) 2018 15,410 http://data.worldbank.org/
indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The government of Barbados, through Invest Barbados, welcomes foreign direct investment with the stated goals of creating jobs, earning foreign exchange, transferring technology, enhancing skills, and contributing to economic growth.

Barbados encourages investment in the following key sectors: international financial services, manufacturing, information technology, and ship registration, as well as developing areas like financial technology, creative industries, agro processing, medical schools, medical tourism and renewable energy.  In the international financial services sector, the government maintains its regulatory oversight to prevent money laundering and tax evasion.

Through Invest Barbados, the government facilitates domestic and foreign private investment.  Invest Barbados’ mandate is to actively promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors.  Invest Barbados also provides customized support for investors to ensure the expansion and sustainability of the initial investment.  It also serves as the primary liaison for existing investors.  As part of the government’s plans to mitigate the impact of the coronavirus pandemic, the government announced the establishment of a Jobs and Investment Council which seeks to mobilize investments and create jobs during and after the pandemic.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign control in Barbados.  Nationals and non-nationals may establish and own private enterprises and private property in Barbados.  These rights extend to the acquisition and disposition of interests in private enterprises.

No industries are closed to private enterprise, although the government reserves the right not to allow certain investments.  Some activities, such as telecommunications, utilities, broadcasting, franchises, banking, and insurance require a government license.  There are no quotas or other restrictions on foreign ownership of a local enterprise or participation in a joint venture.

Other Investment Policy Reviews

Barbados has not conducted a trade policy review in the last three years.

Business Facilitation

Invest Barbados is the main investment promotion agency that attracts and facilitates foreign investment.  All potential investors must submit their proposals for review by Invest Barbados to ensure the projects are consistent with national interests and provide economic benefits to the country.

Invest Barbados offers guidance and direction to new and established investors seeking to pursue investment opportunities in Barbados.  The process is transparent and takes into account the size of capital investment as well as the economic impact of a proposed project.

Invest Barbados offers a website that is useful for navigating applicable laws, rules, procedures, and registration requirements for foreign investors.  This is available at http://www.investbarbados.org .  In February 2020, Invest Barbados launched the Barbados iGuide website, an online guide which provides both local and foreign investors with up-to-date information required to make certain investment decisions, including steps to setting up a business, opportunities for investment, labor and other business costs, and legal requirements, among other data.  This is available at https://www.theiguides.org/public-docs/guides/barbados .

The Corporate Affairs and Intellectual Property Office (CAIPO) maintains an online e-registry filing service for matters pertaining to the Corporate Registry.  It is available to registered agents (usually attorneys).  Information is available at www.caipo.gov.bb .

Barbados ranks 102nd out of 190 countries in the indicator of the ease of starting a business, which takes seven procedures and approximately 16 days to complete at the cost of 7.35 percent of income per capita, according to the 2020 World Bank Doing Business report.  The general practice is to retain an attorney to prepare relevant incorporation documents.  The business must register with the CAIPO, the Barbados Revenue Authority, the Customs and Excise Department, and the National Insurance Scheme.

The government of Barbados continues to facilitate programs and partnerships to assist women entrepreneurs and people with disabilities.  The government of Barbados remains committed to working with civil society and other organizations to meet the UN Sustainable Development Goals by 2030.

Outward Investment

While no incentives are offered, Barbados generally encourages local companies to invest in other countries, particularly within the region.  Local companies in Barbados are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the Caribbean Community (CARICOM) and the Caribbean Single Market and Economy (CSME).  The Barbados Investment Development Corporation (BIDC) provides market development support for domestic companies seeking to enhance their export potential.

2. Bilateral Investment Agreements and Taxation Treaties

Barbados does not have a bilateral investment treaty with the United States, but it does have a double taxation treaty and a tax information exchange agreement.  Barbados has bilateral investment treaties with Canada, China, Cuba, Germany, Italy, Mauritius, Switzerland, the United Kingdom, and Venezuela.  In addition to the United States, Barbados also has tax information exchange agreements with Denmark, the Faroe Islands, Greenland, and South Africa.  Bilateral investment treaties with Belgium-Luxembourg and Ghana are awaiting ratification.  Barbados has a vast double taxation agreement network of 40 countries including Spain, Italy, the United Kingdom, Bahrain, Qatar, the United Arab Emirates, Singapore, China, Austria, Iceland, San Marino, Mexico, Panama, and Canada, with others awaiting ratification or signature.  Additional information is available from Invest Barbados.  Barbados is also party to the following:

Caribbean Community (CARICOM)

The Treaty of Chaguaramas established the CARICOM in 1973.  Its purpose is to promote economic integration among its 15 member states.  Investors operating in Barbados have preferential access to the entire CARICOM market.  The Revised Treaty of Chaguaramas (RTC) establishes the CSME, which permits the free movement of goods, capital, and labor among CARICOM states.  CARICOM has bilateral agreements with Cuba, Colombia, Costa Rica, the Dominican Republic, and Venezuela.  In 2013, CARICOM entered into a Trade and Investment Framework Agreement with the United States.

CARIFORUM-EU Economic Partnership Agreement (EPA)

The Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) and the European Community signed an EPA in 2008.  The overarching objectives of the EPA are to alleviate poverty, promote regional integration and economic cooperation, and foster the gradual integration of the CARIFORUM states into the world economy by improving trade capacity and creating an investment-conducive environment.  The Agreement promotes trade-related developments in areas such as competition, intellectual property, public procurement, the environment, and the protection of personal data.

Caribbean Basin Initiative

The Caribbean Basin Initiative facilitates the economic development and export diversification of the Caribbean Basin economies.  It promotes economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying country economies, and expanding their exports.  The Caribbean Basin Initiative provides beneficiary countries with duty-free access to the U.S. market for most goods.  It permits duty-free entry of products manufactured or assembled in Barbados into the United States.

Caribbean/Canada Trade Agreement (CARIBCAN)

CARIBCAN is an economic and trade development assistance program for Commonwealth Caribbean countries in which Canada provides duty-free access to its national market for the majority of products originating in Commonwealth Caribbean countries.

3. Legal Regime

Transparency of the Regulatory System

Barbados’ legal framework fosters competition and establishes clear rules for foreign and domestic investors regarding tax, labor, environmental, health, and safety concerns.  These regulations are in keeping with international standards.  The Ministry of Finance and Economic Affairs and Invest Barbados provide oversight aimed at ensuring the transparency of investment.

Rulemaking and regulatory authority rest with the bicameral parliament of the government of Barbados.  The House of Assembly consists of 30 members who are elected in single seat constituencies.  The Senate consists of 21 members who are appointed by the Governor General.

Foreign investment into Barbados is governed by a series of laws and their implementing regulations.  These laws and regulations are developed with the participation of relevant ministries, drafted by the Office of the Attorney General, and enforced by the relevant ministry or ministries.  Additional compliance supervision is delegated to specific agencies, by sector, as follows:

  • Banking and financial services – The Central Bank of Barbados (CBB)
  • Insurance and non-banking financial services – Financial Services Commission (FSC)
  • International business – International Business Unit, Ministry of International Business
  • Business incorporation and intellectual property – CAIPO

The Ministry of Finance and Economic Affairs monitors investments to collect information for national statistics and reporting purposes.

All foreign businesses must be registered or incorporated through CAIPO and will be regulated by one of the other aforementioned agencies depending on the nature of the business.

Although Barbados does not have legislation that guarantees access to information or freedom of expression, access to information is generally available in practice.  The government maintains a website and an information service to facilitate the dissemination of information such as government office directories and press releases.  The Government Information Service (BGIS) website is available at: http://gisbarbados.gov.bb/ .  The government also maintains a parliamentary website where it posts legislation prior to parliamentary debate and live streams House sittings.  The government budget is also available on this website, http://www.barbadosparliament.com/ .

Although some bills are not subject to public consultation, input from various stakeholder groups and agencies is enlisted during the initial drafting of legislation.  Public awareness campaigns, through print and electronic media, are used to inform the general public.  Copies of regulations are circulated to stakeholders, and government ministries and departments, and are published in the Official Gazette after passage in parliament.  The Official Gazette is also available on the BGIS website.

Accounting, legal, and regulatory procedures are transparent.  Publicly listed companies publish annual financial statements and changes in portfolio shareholdings, including share values.  Service providers are required to adhere to international best practice standards including International Financial Reporting Standards, International Standards on Auditing, and International Public Sector Accounting Standards for government and public sector bodies.  They must also comply with the provisions of the Money Laundering and Financing of Terrorism Prevention and Control Act.  Accounting professionals must engage in continuous professional development.  The Corporate and Trust Service Providers Act regulates Barbadian financial service providers.  Failure to adhere to these laws and regulations may result in revocation of the business license and/or cancellation of work permit(s).  The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Barbados to be largely compliant.

The Office of the Ombudsman is established by the constitution to guard against abuses of power by government officers in the performance of their duties.  The Office of the Ombudsman aims to provide quality service in an impartial and expeditious manner when investigating complaints by Barbadian nationals or residents who consider the conduct of a government body or official unreasonable, improper, inadequate, or unjust.

The Office of the Auditor General is also established by the constitution and is regulated by the Financial Administration and Audit Act.  The Auditor General is responsible for the audit and inspection of all public accounts of the Supreme Court, the Senate, the House of Assembly, all government ministries, government departments, government-controlled entities, and statutory bodies.  The Office of the Auditor General’s annual reports can be found on the parliament of Barbados website.

International Regulatory Considerations

The OECD recognized Barbados as largely compliant with international regulatory standards.   Barbados is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the Multilateral Competent Authority Agreement, and the Multilateral Convention to Implement Tax Treaty Related Matters to Prevent Base Erosion and Profit Shifting.

The Barbados National Standards Institution (BNSI) oversees a laboratory complex housing metrology, textile, engineering, and chemistry/microbiology laboratories.  The primary functions of the BNSI include the preparation, promotion, and implementation of standards in all sectors of the economy, including the promotion of quality systems, quality control, and certification.  The Standards Act (2006) and the Weights and Measures Act (1977) and Regulations (1985) govern the work of the BNSI.  In November 2019, the government revealed plans to upgrade its governance structure and laboratory systems to bring it in line with international testing and certification standards.  As a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, Barbados, through the BNSI, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Barbados ratified the WTO Trade Facilitation Agreement in 2018.  With full implementation, the Agreement improves the speed and efficiency of border procedures, facilitates trade costs reduction, and enhances participation in the global value chain.  In 2019, Barbados implemented the Automated System for Customs Data which streamlined document compliance and inspections by port authorities.  However, the government increased the issuance fees for certificates of origin which has made trade more expensive.  In the 2020 World Bank Doing Business report, Barbados is ranked 132nd out of 190 countries for trading across borders.

Legal System and Judicial Independence

Barbados’ legal system is based on the British common law.  Modern corporate law is modeled on the Canada Business Corporations Act.  The Attorney General, the Chief Justice, junior judges, and magistrates administer justice in Barbados.  The Supreme Court consists of the Court of Appeal and the High Court.  Parties may appeal to the Court of Appeal.  The High Court hears criminal and civil (commercial) matters and makes determinations on the interpretation of the constitution.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramus (RTC).  In 2005, Barbados became a full member of the CCJ, making the body its final court of appeal and original jurisdiction of the RTC.

The United States and Barbados are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

Laws and Regulations on Foreign Direct Investment

Invest Barbados’ foreign direct investment policy is to promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors.  The main laws concerning investment in Barbados are the Barbados International Business Promotion Act (2005), the Tourism Development Act (2005), and the Companies Act.  There is also a framework of legislation that supports the jurisdiction as a global hub for business including insurance, ships’ registration, and wealth management.

All proposals for investment concessions are reviewed by Invest Barbados to ensure proposed projects are consistent with the national interest and provide economic benefits to the country.

Invest Barbados provides complimentary “one-stop shop” facilitation services to investors to guide them through the investment process.  It offers a website useful for navigating the laws, rules, procedures, and registration requirements for foreign investors: http://www.investbarbados.org .

Competition and Anti-Trust Laws

Chapter 8 of the RTC outlines the competition policy applicable to CARICOM states.  Member states are required to establish and maintain a national competition authority for facilitating the implementation of the rules of competition.  At the CARICOM level, a regional Caribbean Competition Commission (CCC) applies the rules of competition.  The CARICOM competition policy addresses anticompetitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within the Community and actions by which an enterprise abuses its dominant position within the Community.  The Fair Competition Act codified the establishment of the Barbados Fair Trading Commission (FTC) in 2001.  The FTC is responsible for the promotion and maintenance of fair competition and participates in the CCC.  The FTC regulates the principles, rates, and standards of service for public utilities and other regulated service providers.  The Telecommunications Act regulates competition in the telecommunications field.

Expropriation and Compensation

The Barbados constitution and the Companies Act (Chap. 308) contain provisions permitting the government to acquire property for public use upon prompt payment of compensation at fair market value.  U.S. Embassy Bridgetown is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in Barbados.

Dispute Settlement

ICSID Convention and New York Convention

The government of Barbados wrote the New York Convention’s provisions into domestic law but did not ratify the convention.  The Arbitration Act (1976) and the Foreign Arbitral Awards Act (1980), which recognizes the 1958 New York Convention on the Negotiation and Enforcement of Foreign Arbitral Awards, are the main laws governing dispute settlement in Barbados.

Barbados is also a member of the International Center for the Settlement of Investment Disputes (ICSID), also known as the Washington Convention.  Individual agreements between Barbados and multilateral lending agencies also have provisions calling on Barbados officials to accept recourse to binding international arbitration to resolve investment disputes between foreign investors and the state.

Investor-State Dispute Settlement

The Barbados Arbitration Act (1976) and the Foreign Arbitral Awards Act (1980) provide for arbitration of investment disputes.  Barbados does not have a bilateral trade treaty or a free trade agreement with an investment chapter with the United States.  U.S. Embassy Bridgetown is not aware of any current investment disputes in Barbados.

Barbados ranks 170th out of 190 countries in enforcing contracts according to the 2020 World Bank Doing Business Report.  Dispute resolution in Barbados generally takes an average of 1,340 days.  The slow court system and bureaucracy are widely seen as the main hindrances to timely resolution of commercial disputes.  Through the Arbitration Act of 1976, local courts recognize and enforce foreign arbitral awards issued against the government.  In 2019, the Supreme Court of Judicature Act was amended to include the establishment of a commercial division in the High Court which will oversee proceedings regarding arbitration.  Barbados does not have recent cases of investment disputes involving either U.S. or foreign investors.

International Commercial Arbitration and Foreign Courts

The Supreme Court of Barbados is the domestic arbitration body.  Local courts enforce foreign arbitral awards.  In 2019, two new court protocols in the Supreme and Magistrate courts were introduced for alternative dispute mechanisms in mediation and arbitration to be available to judges and attorneys to remedy civil matters.  The law courts also increased the number of mediators and mandatory training.

Bankruptcy Regulations

Under the Bankruptcy and Insolvency Act (2002), Barbados has a bankruptcy framework that recognizes certain debtor and creditor rights.  The Act gives a potentially bankrupt company three options: bankruptcy (voluntary or involuntary), receivership, or reorganization of the company.  The Companies Act provides for the insolvency and/or liquidation of a company incorporated under this Act.  In 2019, the Supreme Court of Judicature Act was amended to include the establishment of a commercial division in the High Court which will oversee proceedings connected to bankruptcy and insolvency.  Barbados ranked 35th out of 190 countries in resolving insolvency in the 2019 World Bank Doing Business Report.  The bankruptcy resolution process takes about 15 percent of the estate costs within 1.8 years.

4. Industrial Policies

Investment Incentives

In 2019, Barbados repealed its Fiscal Incentives Act, bringing the country into conformity with its obligations under the WTO and, in particular, the Agreement on Subsidies and Countervailing Measures.  Manufacturers may still benefit from some concessions.  For further information, please contact Invest Barbados.

The Small Business Development Act (1999) defines a small business as having no more than 25 employees.  Small businesses must be registered under the Companies Act, which applies to domestic and foreign-owned micro- and small enterprises.  Small businesses are not eligible for incentives under the Tourism Development Act, the Special Development Areas Act, or the Shipping Incentives Act.

Enterprises generating export profits (other than from exports within CARICOM) may receive an export allowance expressed as a rebate of corporate tax on those profits.  The maximum rebate of 93 percent applies if more than 81 percent of an enterprise’s profits result from extra-regional exports.  The export development allowance permits a company to deduct from taxable income an additional 50 percent of what the company spends in developing export markets outside CARICOM.

Initial allowances or investment allowances of up to 40 percent on capital expenditure are available for businesses making capital expenditures on machinery and plants or on an industrial building or structure.  The government also allows annual depreciation allowances on such expenditures.

In the tourism sector, the government’s market development allowance permits a company to deduct an additional 50 percent of what it spends to encourage tourists to visit Barbados.  Under the Tourism Development Act of 2002, businesses and individuals that invest in the tourism sector can write off capital expenditure and 150 percent of interest.  These entities are also exempt from import duties and environmental levies on furniture, fixtures and equipment, building materials, supplies, and equity financing.  The Act expands the definition of tourist sector beyond accommodation to include restaurants, tourist recreational facilities, and tourism-related services.  The Act encourages the development of attractions that emphasize the country’s natural, historic, and cultural heritage, and encourages construction of properties in non-coastal areas.

In response to concerns by the OECD and the European Union’s Tax Code of Conduct Group, the government of Barbados has reformed its international business sector regime by harmonizing the legislative and tax frameworks for domestic and international companies.  Companies conducting international business may operate with a tax rate from 1 to 5.50 percent.  Companies exporting 100 percent of their services or products can apply for a foreign currency permit, affording them similar benefits previously enjoyed by international business companies and international societies with restricted responsibility.  For fiscal years commencing on or after January 1, 2019, all corporate entities will be taxed on the sliding scale shown:

Taxable Income USD Rate %
Up to USD 500,000 5.50
Above USD 500,000 to USD 10 million 3.00
Above USD 10 million to USD 15 million 2.50
Above USD 15 million 1.00

There are no withholding taxes on dividends, interest, royalties, or management fees paid to non-residents.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are currently no foreign trade zones or free ports in Barbados.

Performance and Data Localization Requirements

Foreign investors must finance their investments from external sources or from income that the investment generates.  When a foreign investment generates significant employment or other tangible benefits for the country, the authorities may allow the company to borrow locally for working capital.  Invest Barbados may provide a training grant to qualifying manufacturing and information and communication technology enterprises during the initial operating period.

Barbados does not require that locals own shares of a foreign investor’s enterprise, but some restrictions may apply to share transfers.  The Companies Act does not permit bearer shares.  Foreign investors do not need to establish facilities in any specific location, although there are some zoning restrictions on residential and commercial construction for environmental reasons.  There is no requirement that enterprises must purchase a fixed percentage of goods from local sources.  However, investors, particularly within the hospitality industry, are encouraged to use local products wherever possible.

Non-nationals, including all managerial and technical staff (but not nationals of CARICOM member states) seeking to work in Barbados must apply for work permits.  The work permit is specific to the job and employer and the permit may be granted for a period of up to five years.  Short-term permits of up to six months are also available.  To grant a work permit, the government requires that the expatriate must bring to the job special skills or knowledge not readily available in Barbados.  While work permits are generally granted to senior management, the government may restrict the number of permits approved depending on the number of people employed by the local company.  There are no restrictions regarding foreign directors of boards.  More information is available at: www.immigration.gov.bb/pages/WorkPermit.aspx .

There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (for example, backdoors into hardware and software turn over keys for encryption).

As a member of the WTO, Barbados is party to the Agreement to the Trade Related Investment Measures.  The government strongly encourages investments that will create jobs and increase exports and foreign exchange earnings.  Barbados does not require participation by nationals or by the government in foreign investment projects.  Barbados encourages local sourcing but does not require enterprises to purchase a fixed percentage of goods from local sources.  Foreign investors receive the same treatment as Barbadians.

5. Protection of Property Rights

Real Property

There are no restrictions on foreign ownership of property in Barbados.  Foreign investors and locals are treated equally regarding property taxes.  Civil law protects physical property and mortgage claims.  The CBB must verify real property purchases for non-residents.  If a non-resident uses foreign funds and pays for the property in Barbados, the CBB will normally endorse the transaction.  The sale of property is subject to a 2.5 percent property transfer tax in addition to a 1 percent stamp duty.  Brokerage and legal fees are not included in those levies.  Buyers should seek the advice of a local attorney when purchasing property.

With respect to commercial, industrial, hotel and villa properties, the applicable rate of land tax is 0.65 percent on the improved value of the property.  Holders of a certificate from the Barbados Tourism Authority enjoy rebate of 50 percent for hotels and 25 percent for villas.  The Commissioner of Land Tax charges an annual fee based on the assessed property value on residential property as follows:

  • 0% on the first USD 75,000
  • 10% on amounts between USD 75,001 and USD 225,000
  • 70% on amounts between USD 225,000 and USD 425,000
  • 1% on excess of USD 425,000
  • 8% on vacant land under 4,000 sq. ft.
  • 0% on vacant land over 4,000 sq. ft.

Barbados ranks 118th of 190 countries in ease of registering property in the 2020 World Bank Doing Business Report.  It takes approximately 50 days to complete seven procedures and the cost is about 4.5 percent of the property value.  The government has included an additional procedure that has increased the time to record the conveyance at the Land Registry and to pay transfer fees and stamp duties.  This has made transferring property more onerous.

Intellectual Property Rights

Barbados has a good legislative framework governing intellectual property rights (IPR), but enforcement need improvement.  Barbados is a member of the World Intellectual Property Organization (WIPO) and  is party to the Berne Convention,  the Paris Convention,   the Nice Agreementand others.a The government of Barbados adopted a new Copyright Act in 1998 and amended it in 2004 to provide tougher penalties.  In the early 2000s, Barbados also approved legislation covering integrated circuits topography, geographical indications, and protection against unfair competition.  In addition, Barbados revised its Trademark and Industrial Designs Acts to meet international standards.

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the CSME commits all 15 members to implement stronger intellectual property rights protection and enforcement.  The CARIFORUM-EU EPA contains the most detailed obligations regarding intellectual property in any trade agreement to which Barbados is a party. The EPA provides for the protection and enforcement of IPR.  Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties and of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS).”

Barbados remains on the Office of the United States Trade Representative (USTR) Special 301 Report Watch List in 2020.  Barbados acceded to the WIPO Internet Treaties in December 2019 but has not proposed IPR legislation to implement its treaty obligations.  It is also not clear that there is a strong commitment to enforce existing legislation.  In the realm of copyright and related rights, continuing concerns include the unauthorized retransmission of U.S. broadcasts and cable programming by local cable operators in Barbados, including state-owned broadcasters, without adequate compensation to U.S. right holders, and  the refusal of Barbadian TV and radio broadcasters and cable and satellite operators to pay for public performances of music.   The longstanding failure to enforce judgments and other successful outcomes for right holders and the resulting lack of deterrence are additional sources of concern.

It is the responsibility of the importer to pay for and destroy counterfeit goods.  Failure to observe certain standards regarding the importation of goods may result in a recommendation to the Comptroller of Barbados’ Customs and Excise Department to have the goods destroyed.  If the goods fall under Ministry of Health’s jurisdiction, they are destroyed under that ministry’s guidance.  If the goods are prohibited and do not pertain to the Ministry of Health, the Customs and Excise Department will destroy them as appropriate.  Information on the prevalence of counterfeit goods in the local market is not readily available, as there is no tracking method in place to collect data.  Barbados is not on the Notorious Markets List.

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

6. Financial Sector

Capital Markets and Portfolio Investment

Barbados has a small stock exchange, an active banking sector, and opportunities for portfolio investment.  Local policies seek to facilitate the free flow of financial resources, although some restrictions may be imposed during exceptional periods of low liquidity.  Historically, the CBB independently raised or lowered interest rates without government intervention.  There are a variety of credit instruments in the commercial and public sectors that local and foreign investors may access.

Barbados continues to review legislation in the financial sector to strengthen and improve the regulatory regime and attract and facilitate retention of foreign portfolio investments.  The government continues to improve its legal, regulatory, and supervisory frameworks to strengthen the banking system.  The Anti-Money Laundering Authority and its operating arm, the government’s Financial Intelligence Unit, review anti-money laundering policy documents and analyze prudential returns.

The Securities Exchange Act of 1982 established the Securities Exchange of Barbados, which was reincorporated as the Barbados Stock Exchange (BSE) in 2001.  The BSE operates a two-tier electronic trading system comprised of a regular market and an innovation and growth market (formerly the junior market).  Companies applying for listing on the regular market must observe and comply with certain requirements.  Specifically, they must have assets at least USD 500,000 and adequate working capital, based on the last three years of their financial performance, as well as three-year performance projections.  Companies must also demonstrate competent management and be incorporated under the laws of Barbados or another regulated jurisdiction approved by the Financial Services Commission.  Applications for listing on the innovation and growth market are less onerous, requiring minimum equity of one million shares at a stated minimum value of USD 100,000.  Reporting and disclosure requirements for all listed companies include interim financial statements and an annual report and questionnaire.  Non-nationals must obtain exchange control approval from the CBB to trade securities on the BSE.

The BSE publicized its intent to fully immobilize traditional share certificates and to computerize clearance and settlement through the Barbados Central Securities Depository Inc., a wholly owned subsidiary of the BSE.  The FSC under the Property Transfer Tax Act, can accommodate investors requiring a traditional certificate for a small fee.  The Financial Services Commission also regulates mutual funds in accordance with the Mutual Funds Act.

The BSE adheres to rules in accordance with International Organization of Securities Commissions guidelines designed to protect investors, ensure a fair, efficient, and transparent market, and reduce systemic risk.  Public companies must file audited financial statements with the BSE no later than 90 days after the close of their financial year.  The authorities may impose a fine not exceeding USD 5,000 for any person under the jurisdiction of the BSE who contravenes or is not in compliance with any regulatory requirements.

The BSE launched the International Securities Market (ISM) in 2016.  It is designed to operate as a separate market, allowing issuers from Barbados and other international markets.  The ISM is founded on a strong regulatory framework.  To date, the ISM has five listing sponsors.

The BSE collaborates with its regional partners, the Jamaica Stock Exchange and the Trinidad and Tobago Stock Exchange, through shared trading software.  The capacity for this inter-exchange connectivity provides a wealth of potential investment opportunities for local and regional investors.  The BSE obtained designated recognized stock exchange status from the United Kingdom in 2019.  It is also a member of the World Federation of Exchanges.

Barbados has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement and maintains an exchange system free of restrictions on current account transactions.

Money and Banking System

The government established the Central Bank of Barbados in 1972.  The CBB manages Barbados’ currency and regulates its domestic banks.

The Barbados Deposit Insurance Corporation (BDIC) provides protection for depositors.  Oversight of the entire financial system is conducted by the Financial Oversight Management Committee, which consists of the CBB, the BDIC, and the FSC.  The private sector has access to financing on the local market through short-term borrowing and credit, asset financing, project financing, and mortgage financing.

Commercial banks and other deposit-taking institutions set their own interest rates.  The CBB requires banks to hold 17.5 percent of their domestic deposits in stipulated securities.

Bitt, a Barbadian company, introduced a blockchain-based digital mobile wallet service for consumers.  Bitt offers a digital asset exchange, remittance channel, and merchant-processing gateway available via a mobile application.  The CBB and the FSC established a regulatory sandbox in 2018 where financial technology entities can do live testing of their products and services.  This allowed regulators to gain a better understanding of the product or service and to determine what, if any, regulation is necessary to protect consumers.  Bitt completed its participation and formally exited the sandbox in July 2019.  The CBB concluded that the company’s digital wallet service is a good candidate for regulation under legislation that is currently being drafted.

International banks domiciled in the United States, Canada, and Europe are reviewing their correspondent banking relationships in regions they deem high-risk for financial services.  The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S. and European banks.  CARICOM remains committed to engaging with key stakeholders on the issue.

Foreign Exchange and Remittances

Foreign Exchange

Barbados’ currency of exchange is the Barbadian dollar (BBD).  It is issued by the CBB.  Barbados’ foreign exchange operates under a liberal system.  The Barbadian dollar has been pegged to the United States dollar at a rate of BBD 2.00: USD 1.00 since 1975.  This creates a stable currency environment for trade and investment in Barbados.

Remittance Policies

Companies can freely repatriate profits and capital from foreign direct investment if they are registered with the CBB at the time of investment.  The CBB has the right to stagger these conversions depending on the level of international reserves available to the CBB at the time capital repatriation is requested.

The Ministry of Finance, Economic Affairs and Investment controls the flow of foreign exchange and the Exchange Control Division of the CBB executes foreign exchange policy under the Exchange Control Act.  Individuals may apply through a local bank to convert the equivalent of USD 10,000 per year (effective July 1, 2019) for personal travel and up to a maximum of USD 25,000 for business travel.  The CBB must approve conversion of any amount over these limits.  International businesses, including insurance companies, are exempt from these exchange control regulations.

Barbados is a member of the CFATF.  In 2014, the government of Barbados signed an Intergovernmental Agreement in observance of FATCA, making it mandatory for banks in Barbados to report the banking information of U.S. citizens.

Sovereign Wealth Funds

Currently, the CBB does not maintain a sovereign wealth fund.  In the past, the government announced plans to create a sovereign wealth fund to ensure national wealth is available for present and future generations of Barbadians.  Barbadians 18 years and older are expected to gain a stake in the fund after it is established.  It is envisioned that the fund will hold government assets, including on- and offshore real property, revenues from oil and gas products, and non-tangible assets such as trademarks, patents, and intellectual property.  As part of the government’s pandemic response, the prime minister has signaled plans to reengage on this issue.

7. State-Owned Enterprises

State-owned enterprises (SOEs) in Barbados work in partnership with ministries, or under their remit, and carry out certain specific ministerial responsibilities.  There are currently about 70 SOEs in Barbados operating in areas such as tourism, investment services, broadcasting and media, sanitation services, sports, and culture.

SOEs in Barbados are not found in the key areas earmarked for investment.  They are all wholly owned government entities.  They are headed by boards of directors to which their senior management reports.

As part of the ongoing BERT Program, the government of Barbados is addressing the expenditure position of the SOEs by defining clear objectives for SOE reform, reducing the wage bill of these entities, and implementing other necessary reform measures.

Privatization Program

Barbados does not have a targeted privatization program.  However, the government has announced plans for public-private partnerships in airport and broadcasting services which will still see government retaining ownership of these entities.  The process remains open to foreign investors and is transparent.  More information can be obtained from www.gisbarbados.gov.bb  .

8. Responsible Business Conduct

The private sector is involved in projects that benefit society, including in support of environmental, social, and cultural causes.  The non-governmental organization (NGO) community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental, and community projects.  The government at times partners with NGOs and encourages philanthropy.

9. Corruption

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively.  Barbados signed but did not yet ratify the UN Convention on Corruption and the Inter-American Convention against Corruption.

In 2012, Barbados enacted the Prevention of Corruption Act, which includes standards of integrity in public life.  However, it has not been proclaimed by the governor-general and consequently was not in force.  The Integrity in Public Life Bill 2018 remains pending in parliament.  This Bill seeks to establish an integrity commission, to promote the integrity of government officials, and strengthen measures for the prevention, detection, investigation, and prosecution of acts of corruption.  The law also requires public officials to declare income and assets and makes provisions for whistleblower protection.  Upon assuming power in 2018, the prime minister required all high-level public officials to disclose income and assets to the government.  While the government claimed officials complied with this directive, the disclosures were not published.

A government minister with the previous administration was arrested in the United States on charges of laundering proceeds from bribes paid in Barbados.  He was found guilty of two counts of money laundering and one count of conspiracy to commit money laundering.  He intends appeal the conviction.

Barbados is a member of the regional Association of Integrity Commissions and Anti-Corruption Bodies in the Commonwealth Caribbean.

Resources to Report Corruption

The Director
Financial Intelligence Unit
P.O. Box 1372, Bridgetown
246-436-4734
director@barbadosfiu.gov.bb

The Chairman
Anti-Money Laundering Authority
P.O. Box 1372, Bridgetown
246-436-4734
amla@sunbeach.net

10. Political and Security Environment

Barbados does not have a recent history of politically motivated violence or civil unrest.

11. Labor Policies and Practices

Barbados’ labor force was approximately 138,300 people at the end of December 2019.  The total average unemployment rate was approximately 12.3 percent.  In April 2020, the government disclosed that it had received 29,000 new unemployment claims as the result of the coronavirus pandemic which caused closures in the retail, construction, and tourism sectors.  More layoffs and business closures are expected.

Labor regulations in Barbados are guided by a framework of laws including the Holidays with Pay Act, the Sick Leave Act, the Public Holidays Act, and the Protection of Wages Act, as well as policies regarding maternity leave, national insurance (social security) contributions, unemployment benefits, and severance pay.  Barbados has ratified the eight core conventions of the International Labor Organization (ILO).  Barbados upholds the ratified conventions and is guided by the ILO’s other conventions.

Wages in Barbados are some of the highest in the Caribbean.  Minimum wages are administratively established for only a few categories of workers and are enforced by the Ministry of Labor’s Labor Department.  The minimum wage for shop assistants is USD 3.13 per hour.  The Ministry of Labor recommended that companies recognize this as the de facto minimum wage, though most employees earn more than this.

The standard legal workweek is 40 hours in five days, and the law provides employees with three weeks of paid holiday for persons with less than five years of service and four weeks of paid holiday after five years of service.  The law requires overtime payment of time and a half for hours worked in excess of the legal standard and prescribes all overtime must be voluntary.  The law does not set a maximum number of overtime hours.  Workers are covered by unemployment benefits legislation and national insurance legislation after 52 weeks of continuous employment.  The government set occupational safety and health standards that were current and appropriate for its industries.

The Ministry of Labour is charged with enforcing the minimum wage as well as work hours, and it did so effectively.  The ministry also enforced health and safety standards and, in most cases, followed up to ensure management corrected problems, but the number of labor inspectors was insufficient to effectively enforce compliance.  The ministry used routine inspections, accident investigations, and union membership surveys to prevent labor violations and to verify that wages and working conditions met national standards.  Penalties include fines of up to USD 250 per offense, imprisonment of up to three months, or both.  These penalties were inadequate to ensure compliance.  The ministry reported that it historically relied on education, consensus building, and moral persuasion rather than penalties to correct labor law violations.  The ministry delivered presentations to workers to inform them of their rights, and it provided education and awareness workshops for employers.  The ministry’s Health and Safety Inspection Unit conducted several routine annual inspections of government-operated corporations and manufacturing plants, with no serious problems noted.

Office environments received additional attention from the Ministry of Labour due to concerns about indoor air quality.  Trade unions monitored safety problems to verify the enforcement of safety and health regulations as well as the correction of problems by management.

The law provides for the right of workers to refuse dangerous work without jeopardy to their employment, and authorities generally protected employees in this situation.

Trade unions enjoy a strong voice in the labor and economic affairs of the country through their representation in Barbados’ Social Partnership, a tripartite consultative mechanism.  Approximately 36 percent of the labor force belongs to trade unions, but despite this small percentage, unions in Barbados are influential.  All key sectors are unionized, with all private and public employees in agriculture, tourism, the airport, and seaport belonging to a single union confederation.

The major unions recognize the advantages accruing to Barbados from foreign investment and foreign expertise and are generally flexible and accommodating in their dealings with employers.  However, local labor leadership is sensitive when it perceives a lack of respect for Barbadian laws and customs by large, visible foreign employers.  It is generally cooperative with management in unionized shops.

The law, including related regulations and statutes, provides for the right of workers to form and join unions and conduct legal strikes but does not specifically recognize the right to bargain collectively.  The law does not require companies to recognize unions or to accept collective bargaining, and no specific law prohibits anti-union discrimination or requires reinstatement of workers fired for union activity.  Although employers were under no legal obligation to recognize unions, most major employers did so when more than 50 percent of the employees made a request.  A tribunal may order reinstatement, re-engagement, or compensation under the Employment Rights Act.  All private sector employees are permitted to strike, but the law prohibits workers in essential services, such as police, firefighters, and electricity and water company employees, from engaging in strikes.  With a few exceptions, workers’ rights were generally respected.  Unions received complaints of collective bargaining agreement violations, but most were resolved through established mechanisms.

In general, Barbados effectively enforced the law in the formal sector, but there was no information as to the adequacy of resources or inspections.  Penalties for violations include fines up to USD 500, imprisonment up to six months, or both.  The Employment Rights Act of 2013 grants the right to have allegations of unfair dismissal tried before the Employment Rights Tribunal.

The law provides for a minimum working age of 16 and this provision is generally observed.  Compulsory primary and secondary education policies reinforced minimum age requirements.  The Labour Department has a small cadre of labor inspectors who conduct spot investigations of enterprises and check records to verify compliance with the law.  These inspectors may take legal action against an employer who is found to have underage workers.

Under the Severance Payments Act, an employer is obligated to pay an employee a severance payment where the employee is terminated on account of redundancy.  However, the Employment Rights Act, section 31, provides that dismissal of an employee on account of redundancy does not contravene the right not to be unfairly dismissed.  Qualifying workers who are laid off for economic reasons are generally entitled to receive a severance payment on a graduating scale that starts at 2.5 weeks’ pay for every completed year of employment.  All unemployed workers are eligible for unemployment benefits upon meeting the qualifying contribution periods established by the National Insurance and Social Security scheme.

The Occupational Health at Work Act governs the general health and safety of workers in all workplaces except the armed forces and private household domestic service.  The law requires firms employing more than 50 workers (fewer in certain sectors) to create a safety committee that may challenge the decisions of management concerning occupational safety and health.  The Labor Department also enforces health and safety standards and follows up to ensure that management corrects problems.  Trade union monitors can identify safety problems for government factory inspectors.  The Labor Department’s Inspections Unit conducts routine annual inspections of government-operated corporations and manufacturing plants.  Workers have the right to remove themselves from dangerous or hazardous job situations without jeopardizing their continued employment.

The Shops Act of 2016 expanded permitted opening hours for retail businesses and removed mandatory closure requirements on most public holidays.

The government is currently adapting labor policies and requirements in light of the ongoing coronavirus pandemic.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

As a high-income country under World Bank criteria, Barbados does not qualify for DFC financing.  However, under DFC’s predecessor, the Overseas Private Investment Corporation, Barbados has one active project which provides risk insurance for a blue bond for marine conservation project.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Barbados
Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data
Economic Data Year Amount Year Amount
Host Country GDP (M USD) 2018 5036 2018 5,145 https://data.worldbank.org/
country/barbados
 
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data
U.S. FDI in partner country (M USD, stock positions) N/A N/A 2018 33,276 https://apps.bea.gov/international/
factsheet/factsheet.cfm
 
Host country’s FDI in the United States (M USD, stock positions) N/A N/A 2018 6,225 https://apps.bea.gov/international/
factsheet/factsheet.cfm
 
Total inbound stock of FDI as % host GDP N/A N/A 2018 141.4% https://unctad.org/en/Pages/DIAE/
World%20Investment%20Report/
Country-Fact-Sheets.aspx
 
 

* Source for Host Country Data: Central Bank of Barbados (CBB) hhttp://data.centralbank.org.bb/GeneralStatistics.aspx  . All CBB GDP figures for 2018 are estimates.

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

14. Contact for More Information

Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
Phone number: 246-227-4000
Email: BridgetownPolEcon@state.gov

Guyana

Executive Summary

Guyana is located on South America’s North Atlantic coast, bordering Venezuela, Suriname, and Brazil. Guyana is an upper middle-income country according to the World Bank. In 2019, estimated inflation was below 2.5 percent with a 4.4 percent growth Gross Domestic Product (GDP). With the advent of first oil, the Guyanese economy is poised to become one of the best performing economies in the Western Hemisphere with an optimistic projected GDP growth rate in 2020 exceeding 50 percent. In response to COVID-19, the Bank of Guyana anticipated a 10 percent contraction in non-oil sectors for 2020. Guyana’s economy is driven primarily by commodities such as gold, bauxite, rice, and sugar. The United States was Guyana’s largest trading partner in 2019.

Guyana’s medium-term prospects remain positive with the discovery of vast oil reserves in Guyana’s waters that will provide decades of substantial oil revenues. The Government of Guyana (GoG) created a sovereign wealth fund for the oil revenues and plans to spend most of the near-term revenue on education, health, and infrastructure.

Outside the oil industry, Guyana’s economy has been hampered by political uncertainty that started in December of 2018 when the ruling administration fell to a no-confidence vote. Elections were finally held on March 2, but due to various legal and political delays, results were delayed, leaving many foreign investors in a holding pattern. In addition to the political uncertainty, the COVID-19 pandemic resulted in the government closing the airport to international flights, closing non-essential businesses, and implementing a curfew from 6 a.m. until 6 p.m. that resulted in a further contraction of the economy. Despite these challenges, Guyana is still projected to lead the Caribbean in GDP growth for 2020.

The Government of Guyana (GoG) actively encourages foreign direct investment (FDI) and offers tax concessions for priority projects through its Guyana Office for Investment (GO-INVEST). According to the Bank of Guyana’s Half -Year Report for 2019, Guyana’s FDI increased from $514.8M to $826.4M, an increase of 60.5 percent. This growth in FDI was fuelled mainly by developments within the oil and gas sector and all the industries that support it. Guyana recently developed a local content policy to help local companies take advantage of this business sector. Legislation to enforce the preliminary local content policy is still forthcoming, so the impact on oil and gas companies investing in Guyana is unknown.

Guyana offers both foreign and domestic potential investors a broad spectrum of investment choices, including agriculture, petroleum, construction, wholesale and retail, health, transportation, and agro-processing. Furthermore, opportunities exist within the services sector such as renewable energy, business process outsourcing (BPO), call centers, information technology services, hospitality, and tourism. Guyana is the only English-speaking country in South America and has a sizeable labor market, creating unique potential for call centers and other industries. The construction, wholesale and retail, transportation, and storage sectors experienced notable growth in 2019.

In 2015, ExxonMobil began exploratory drilling off Guyana’s coast, investing nearly $4 billion into the project thus far. ExxonMobil found recoverable oil in 16 out of 18 attempts and increased its estimate of recoverable oil to 8 billion barrels of -equivalent, with ongoing exploration from several international oil companies.

Guyana’s Green State Development Strategy, which was finalized in May 2019, serves as the guiding document for government priorities under the administration of President David Granger. These priorities include a focus on agriculture, supporting emerging and value-added industries, improving business climate, investing in sea defence, and transitioning to nearly 100 percent renewable energy.

Perceptions of corruption persist in Guyana. Transparency International’s 2019 report scored Guyana at 85 out of 180 ranked economies. One key concern was the insufficient response to a high crime rate. Guyana also ranked 134 out of 190 countries in the World Bank’s 2019 report on Ease of Doing Business. The major shortcomings included a weak judicial system, lack of intellectual property protection, corruption, and bureaucracy.

Guyana continues to benefit from official development assistance from multiple donors with projects focused on health care, education, economic development, climate change adaptation, disaster mitigation, and citizen security.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 85 of 180 https://www.transparency.org/cpi2019
World Bank’s Doing Business Report 2019 134 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index N/A N/A https://www.globalinnovationindex.org/
analysis-indicator
U.S. FDI in partner country ($M USD, stock positions) N/A N/A http://apps.bea.gov/
international/factsheet/
World Bank GNI per capita 2018 USD 4,770 https://data.worldbank.org/
country/guyana?view=chart

1. Openness To, and Restrictions Upon, Foreign Investment

Policies toward Foreign Direct Investment

The Government of Guyana (GoG) recognizes foreign direct investment (FDI) as a critical part of growing the economy. In 2019, the GoG published its Green State Development Strategy (GSDS) which highlights the priority areas over the next 20 years. These priorities include investment in agriculture, agro-processing, light manufacturing, renewable energy, tourism, and Information and Communications Technology (ICT).

The Government of Guyana promotes FDI through its Guyana Office for Investment (GO-INVEST). There are no laws and practices that discriminate against foreign investors. Companies willing to invest in Guyana may negotiate tax concessions with the GoG through its investment facilitation agency GO-INVEST.

GO-INVEST focuses primarily on agriculture and agro-processing, tourism, manufacturing, ICT, seafood and aquaculture, and wood processing. Potential investors should note that GO-INVEST is the first point of contact to obtain necessary permits and tax concessions upon which an investment agreement is prepared by GO-INVEST and sent to the Guyana Revenue Authority (GRA). GO-INVEST has been targeted by Guyana’s Ministry of Business for capacity-building assistance to help improve its operations in support of interested investors.

In January of 2020, the GoG released its local content policy framework which is intended to provide a guideline for future legislation on the subject. Criticism of the policy within Guyana’s business community emphasizes the absence of first preference to local companies. Presently, the policy focuses on upstream oil and gas activities. The GoG intends to develop the policy further to include skills development of Guyanese nationals and supplier development of Guyanese companies.

Limits on Foreign Control and Right to Private Ownership and Establishment

Guyana’s constitution specifically protects the rights of foreigners to own property or land in Guyana. Foreign and domestic firms possess the right to establish and own business enterprises and engage in all forms of remunerative activity. Private entities are governed by the Companies Act and are free to acquire or dispose of interest in accordance with the law.

Foreign and domestic firms have the right to establish and own business enterprises and engage in all forms of remunerative activity. Some key sectors like aviation, forestry, banking, and tourism are heavily regulated and require licensing. The process to obtain licenses can be time consuming and may in some instances require approval by subject minister.

According to GO-INVEST’s “Investor’s Roadmap,” the estimated processing time to obtain the approvals to lease state or government-owned lands is about one year. Some investors report much longer processing times. Restrictions on foreign ownership of property exist in the mining sector for small-and-medium-scale mining concessions. Foreign investors interested in participating in the industry at those levels may establish joint ventures with Guyanese nationals, under which the two parties agree to jointly develop a mining property. This type of relationship can carry a high level of risk because arrangements are governed only by private contracts and the sector’s regulatory agency, Guyana Geology and Mines Commission, does not oversee them. The U.S. Embassy strongly encourages investors to exercise due diligence when exploring their options.

Other Investment Policy Reviews

Guyana’s macro-economic fundamentals have remained stable over the past decade. The current administration has articulated its policy focus through the Green State Development Strategy. The developmental policies include incentives for priority areas including renewable energy, agriculture, and agro-processing. The Ministry of Finance published its Public Private Partnership framework to finance such priority areas.

Guyana remains of key economic significance to the Caribbean region with its exceptional growth rate attributed to its oil discoveries. Government policy focuses on attracting inward FDI. The GoG applies national treatment to all economic activities, except for certain mining operations, though some foreign-owned companies conduct large-scale mining operations in the country. During the past year, the GoG took actions to improve the business environment, such as lowering corporate income tax rates. Incentives for FDI include income tax holidays, and tariff and value-added tax (VAT) exemptions.

The World Trade Organization (WTO) published a trade policy review in 2015.

  • WTO –

Business Facilitation

All companies operating in Guyana must register with the Registrar of Companies.  Registration fees are lower for companies incorporated in Guyana than those incorporated abroad.  Locally incorporated companies are subjected to a flat fee of approximately $300 and a company incorporated abroad is subject to a fee of approximately $400. Businesses in the sectors requiring specific licenses, such as mining, telecommunications, forestry, and banking must obtain operation licenses from the relevant competent authorities before commencing operations.

GO-INVEST also advises the GoG on the formulation and implementation of national investment policies and provides facilitation services to foreign investors, particularly in completing administrative formalities, such as commercial registration and applications for land purchases or leases.  Under the Status of Aliens Act, foreign and domestic investors have the same rights to purchase and lease land. However, the process to access licensing can be complex and many foreign companies have opted to partner with local companies which may assist with acquiring a license. The Investment Act specifies that there should be no discrimination between private foreign and domestic investors, or among foreign investors from different countries. The authorities maintain that foreign investors have equal access to opportunities arising from privatization of state-owned companies.

Outward Investment

The GoG is focused on attracting inward investment into Guyana.  GO-INVEST also supports Guyanese investors and exporters looking to operate overseas.  In 2019, the Natural Resource Fund act was passed for the creation of a sovereign wealth fund. The act provides the Minister of Finance with the responsibility and overall management of the fund.  The act provides for the minister to enter into an agreement with the Bank of Guyana for the operational management of the fund.  This fund is currently held at the Federal Reserve Bank of New York and received its first US $55M deposit from oil revenue in March, along with the country’s first 2% royalty payment from the total sale of the oil.

3. Legal Regime

Transparency of the Regulatory System

Legal, regulatory, and accounting systems are consistent with international norms. Guyana is a democratic state and a separation of powers exists among the executive, legislative, and judiciary.

As captured in the World Bank’s Doing Business Report, bureaucratic procedures are cumbersome, often requiring the involvement of multiple ministries. Investors report having received conflicting messages from various officials, and difficulty determining where the authority for decision-making lies.  In the absence of adequate legislation, much decision-making remains centralized. An extraordinary number of issues continue to be resolved in the presidential cabinet, a process that is commonly perceived as opaque and slow. Attempts to reform Guyana’s many bureaucratic procedures have not succeeded in reducing red tape.

Draft pieces of legislation are available in the Parliament Library and on the National Assembly website (http://parliament.gov.gy/ ) for public review.

International Regulatory Considerations 

Guyana has been a World Trade Organization (WTO) member since 1995 and adheres to Trade-Related Investment Measures (TRIMs) guidelines. Guyana is a member of the Caribbean Community (CARICOM) and seeks to harmonize its regulatory systems with the rest of the members. The Forest Stewardship Council, Verification and Legal Origin, Reduce Emissions from Deforestation and Forest Degradation (REDD+), are some of the norms incorporated in the regulations.

Guyana has laws on intellectual property rights and patents. However, the lack of enforcement allows for the spread of illegally obtained content.

Laws and Regulations on Foreign Direct Investment 

Legislation exists in Guyana to support foreign investment in the country, but the implementation of relevant legislation continues to be inadequate. The objectives of the Investment Act of 2004 and Industries and Aid and Encouragement act 1951 are to stimulate socio-economic development by attracting and facilitating foreign investment. Other relevant laws include: the Income Tax Act, the Customs Act, the Procurement Act of 2003, the Companies Act of 1991, the Securities Act of 1998, and the Small Business Act. Regulatory actions are still required for much of this legislation to be effectively implemented. The Companies Act provides special provisions for companies incorporated outside of Guyana called “external companies.”

Guyana has no known examples of executive interference in the court system that have adversely affected foreign investors. The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The 2020 World Bank’s Doing Business Report, states that it takes 581 days to enforce a contract in Guyana.

Competition and Anti-Trust Laws 

The Competition Commission of Guyana was established under the Competition and Fair Trading Act of 2006. The Competition and Fair Trading act seeks to promote, maintain, and encourage competition; to prohibit the prevention, restriction, or distortion of competition and the abuse of dominant positions in trade; and, to promote the welfare and interests of consumers. The Competition Commission and Consumer Affairs Commission (CCAC) is responsible for investigating complaints by agencies and consumers, eliminating anti-competitive agreements, and may institute or participate in proceedings before a Court of Law.

Expropriation and Compensation 

The government can expropriate property in the public interest under the Acquisition of Land for Public Purposes Act 2001. There is adequate legislation to promote and protect foreign investment. However, the effectiveness of implementation remains cumbersome. Many reports view the judicial system as being slow and ineffective in enforcing legal contracts. There have been no recent cases of expropriation.  All companies are encouraged to conduct due diligence and seek appropriate legal counsel for any potential questions prior to doing business in Guyana.

Dispute Settlement 

Guyana is a party to the International Centre for Settlement of Investment Disputes (ICSID Convention). Additionally, Guyana has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), which went into force in December of 2014.

Investor-State Dispute Settlement 

Guyana does not have a bilateral investment treaty with the United States. Negotiations began in 1993 but broke down in 1995. Since then, the two countries have not conducted subsequent negotiations.

Double taxation treaties are in force with Canada (1987), the United Kingdom (1992), and CARICOM (1995). Other double taxation agreements remain under negotiation with India, Kuwait, and the Seychelles. The CARICOM-Dominican Republic Free Trade Agreement provides for the negotiation of a double taxation agreement, but no significant developments have occurred since March 2009.

There are two ongoing investment disputes involving U.S. interests in Guyana. U.S. company Atlantic Tele-Networks owns 80 percent of Guyana Telephone and Telegraph (GTT). The current administration would like to end GTT’s monopoly on international data transmissions and increase competition. GTT’s competitor, Digicel, is allegedly sending data to a satellite facility in Suriname, illegally bypassing GTT’s international data link. Despite GTT’s protests to the government, Digicel has continued to operate, apparently in violation of the monopoly agreement. GTT is also accused of owing $44 million in outstanding taxes since 1991, which could be used to negotiate out the monopoly. All three issues are linked, and negotiations between the government and GTT are proceeding. U.S. company Caribbean Telecommunications Ltd. has filed a lawsuit against Guyana Telephone and Telegraph (GTT), alleging that GTT engaged in unfair trade practices to cancel the company’s license to provide cellular services in Guyana.

International Commercial Arbitration and Foreign Courts 

International arbitration decisions are enforceable under the Arbitration Act of British Guiana of 1931, as amended in 1998. The Act is based on the Geneva Convention for the Execution of Foreign Arbitral Awards of 1927. The GoG enforces foreign awards by way of judicial decisions or action, and such awards must be in line with the policies and laws of Guyana.

According to the 2020 World Bank’s Doing Business Report, resolving disputes in Guyana takes 581 days, and costs 27 percent of the value of the claim on average. According to many businesses, suspected corrupt practices and long delays make the courts an unattractive option for settling investment or contractual disputes, particularly for foreign investors unfamiliar with Guyana.

The GoG has set up the Commercial Court has been set up to expedite commercial disputes, but this court only has one judge presiding, and companies have reported that it is overwhelmed by a backlog of cases.  The Caribbean Court of Justice, based in Trinidad and Tobago, is Guyana’s court of final instance.

Bankruptcy Regulations 

The 1998 Guyana Insolvency Act provides for the facilitation of insolvency proceedings.  The Financial Institutions Act of 2004, gives the Central Bank power to take temporary control of financial institutions in trouble.  This Act provides legal authority for the Central Bank to take a more proactive role in helping insolvent local banks.

According to data collected by the World Bank Doing Business Report, resolving insolvency in Guyana takes three years on average and costs 28.5 percent of the debtor’s estate, with the most likely outcome being that the company will be sold piecemeal.  The average recovery rate is 18 cents on the dollar. Globally, Guyana stands at 163 in the ranking of 190 economies on the Ease of Resolving Insolvency Report.

4. Industrial Policies

Investment Incentives 

Investment Incentives are designed to advance broader policy goals, such as boosting research and development or promoting regional economies. Guyana’s economy is undergoing economic transformation. The current administration identified a green agenda through its Green State Development Strategy which seeks to develop a “green economy” through supporting sustainable sectors such as renewable energy, agriculture, and manufacturing. The GoG provides tax concessions for these priority sectors.

Guyana offers an array of incentives to foreign and domestic investors alike in the form of exemption from various taxes, accelerated depreciation rates, full and unrestricted repatriation of capital, profits, and dividends. The first point of contact in applying for tax concessions is the Guyana Office for Investment (GO-INVEST). The purpose of GO-INVEST is to promote and encourage investment in Guyana. The GoG encourages investment in the following industries: agriculture and agro-processing, light manufacturing, and services.   Guyana was awarded the “Best Eco-Tourism Award at the ITB global travel fair in Berlin, Germany. Conde Nast Traveller magazine listed Guyana as one of its suggested 20 destinations to visit in 2020.  Research and Development

Research and Development

The GoG’s research and development is decentralized. For the rice industry, the Guyana Rice Development Board creates new variants of rice and the Guyana Sugar Corporation has an extensive program to create various variations of sugar cane. The Ministry of business has a business incubator program which supports the development of new entrepreneurs. University of Guyana is widely viewed as a major stakeholder in research and development. Foreign firms are encouraged to initiate research and development initiatives. ExxonMobil has developed partnerships with the University of Guyana and Conservation International for research and development.

Opportunities can be found on the following websites:

Guyana Office for Investment:  http://goinvest.gov.gy/investment/investment-guide/

The National Procurement & Tender Administration (NPTA):  http://www.npta.gov.gy/

National Industrial & Commercial Investment Limited: http://www.privatisation.gov.gy/

Ministry of Finance : https://finance.gov.gy/procurements/

Foreign Trade Zones/Free Ports/Trade Facilitation

Guyana does not operate free trade zones. However, consideration is ongoing for establishing such zones in Lethem, a Guyanese town on the Brazilian border that relies heavily on commerce in both countries. The GoG announced plans to build a road from Lethem to Georgetown to provide a cheaper and faster method for transporting goods from Brazil to the Guyanese coast.

Guyana became the 53rd WTO member and first South American country to ratify the new Trade Facilitation Agreement (TFA).  The WTO Secretariat received the country’s instrument of acceptance on November 30, 2015. 

Performance and Data Localization Requirements

There are no data localization requirements.  Foreign investors are not required to establish or maintain a certain amount of data storage within the country.

A requirement to hire locally at least 80 percent of employees is applied equally to domestic and foreign investment projects.  Although no explicit government policy regarding performance requirements exists, some are written into contracts with foreign investors and could include the requirement of a performance bond.  Some contracts require a certain minimum level of investment. Investors are not required to source locally, nor must they export a certain percentage of output.   Foreign exchange is not rationed in proportion to exports, nor are there any requirements for national ownership or technology transfer.

5. Protection of Property Rights

Real Property

Guyana ranks 128 out of 190 countries in the 2020 World Bank ranking for Ease of Business registering property. Guyana has a dual registry system of property rights with distinct requirements, processes, and enforcement mechanisms.  The two types of registry systems are deeds (Deeds and Commercial Registry) and title (Land Registry) registries that operate in separate jurisdictions, which in theory helps avoid the problem of double entry and dual registration.   Companies have complained about Guyana’s property rights being overly bureaucratic and complex, with opaque regulations that overlap and compete. Some report that this affects the proper allocation, enforcement, and effectiveness of property rights, as well as the efficiency of property-based markets, such real estate and financial markets (especially primary ones, such as mortgage markets).  The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The World Bank’s Doing Business report 2020 reports it takes 581 days to enforce such contracts. 

Intellectual Property Rights

Upon independence in 1966, Guyana adopted British law on intellectual property rights (IPR). Guyana’s Copyright Act is dated 1956, and its Trademark Act and Patents and Design Act are dated 1973.  Local contacts report that numerous attempts to pass comprehensive legislative updates to this legislation have been unsuccessful. Piecemeal modernization amendments contained in the Geographic Indication Act of 2005, the Competition and Fair Trading Act 2006, the Business Names Registration Act 2000, and the Deeds Registry Authority Act 1999 have offered additional protection to local products and companies.

No modern legislation exists to protect the foreign-registered rights of investors. Guyana joined the World Intellectual Property Organization (WIPO) and acceded to the Berne and Paris Conventions in late 1994. Guyana has not ratified a bilateral intellectual property rights agreement with the United States. The Granger administration has drafted intellectual property rights legislation which has yet to be tabled in Parliament.

Many businesses reported registration time for a patent or trademark may take in excess of six months. However, there is a lack of effective enforcement to protect intellectual property rights. Patent and trademark infringement are common, as is evident among local television broadcasts of pirated and rebroadcasted TV satellite signals. Media sources reported that piracy of foreign academic textbooks is common. Guyana’s laws have not been amended to fully conform to the requirements of the Trade Related Intellectual Property Rights (TRIPS) Agreement.

Guyana is not listed on USTR’s Special 301 Report to congress or the Notorious Markets List.

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

6. Financial Sector

Capital Markets and Portfolio Investment

Guyana has its own stock market, which is supervised by the Guyana Association of Securities Companies and Intermediaries (GASCI).   Guyana’s local stock market has performed well in 2019 with a year on year increase of 20 percent market capitalization.  Guyana’s financial services sector is estimated to have grown by 4.1 percent at mid-year 2019. Credit is available on market terms. The prime lending rate as at half year was 10.5 percent.  There continues to be significant interest in Guyana’s financial sector. 

Money and Banking System

Monetary policy remains accommodative, aimed at achieving price stability and controlling liquidity within the economy.  The financial sector is regulated by the Bank of Guyana (BOG), the country’s central bank.  The BOG is empowered under the Financial Institutions Act 1995 and Bank of Guyana Act to regulate the financial sector.   Regulation highlights include high levels of liquidity, a strong deposit and asset base, and profitable financial institutions.  Liquidity in the banking system increased by 16.8 percent on account of higher excess reserves and higher balances due from banks abroad.  Net domestic credit of the banking system expanded by 12.8 percent to $1.33M from the December 2018 level of $1.2M on account of higher credit to both the public and private sectors.

Nevertheless,  private sector contacts report that access to finance remains an issue for conducting business.  The prime lending rate contracted by 2.5 percent to 10.5 percent from 13.0 percent as of the third quarter 2019.  The BOG maintains a floating exchange rate.  According to the BoG half-year report, monetary aggregates of broad money expanded by 3.3% while that of reserve money contracted by 1.6%.

Guyana has six commercial banks.  Foreign banks provide domestic services or enter the market with the applicable license from the BoG.  Foreigners may establish a bank account without restrictions.

Guyana continues to strengthen its financial system through implementation of its Anti Money Laundering/Counter Financing of Terrorism (CFT) program and the passage of the National Payments Act 2018.  

Foreign Exchange and Remittances

Foreign Exchange

The Guyana dollar (GYD) is fully convertible and transferable.  The Guyanese dollar is also generally stable and its value against the U.S. dollar. The Guyana dollar weighted mid-rate, relevant for official transactions, remained constant at GYD208.50. The un-weighted average mid-rate was GYD214.04 compared with GYD215.78 for the corresponding period in 2018. Foreign exchange transactions increased by 23.0 percent to $4,646.5 million on account of higher turnovers at banks, private trading houses known as cambios, foreign currency accounts, and hard currency transactions. Aggregate purchases were higher than sales, resulting in a net purchase of $4.9M.

No limits exist on inflows or repatriation of funds. However, regulations require that all persons entering and exiting Guyana declare all currency in excess of $10,000 to customs authorities at the port of entry. It is common practice for foreign investors to use subsidiaries outside of Guyana to handle earnings generated by exports.

Remittance Policies 

There is no limit on the acquisition of foreign currency, although the government limits the amount that several state-owned firms may keep for their own purchases.  Regulations on foreign currency denominated bank accounts in Guyana allow funds to be wired in and out of the country electronically without having to go through cumbersome exchange procedures.  Foreign companies operating in Guyana have not reported experiencing government-induced difficulties in repatriating earnings in recent years.

Sovereign Wealth Fund

The Natural Resources Fund (NRF) Act was passed in the National Assembly in January 2019, providing the framework for the establishment of a sovereign wealth fund.  Shortly after the enactment of the NRF,  Guyana became an associate member of the International Forum of Sovereign Wealth Funds (IFSWF).  The Bank of Guyana manages the NRF, which is held at the Federal Reserve Bank of New York. The opposition party has signalled its intent to repeal the NRF Act based on concerns that the bill was passed after the government was defeated by a vote of no confidence without sufficient input from the political opposition.

7. State-Owned Enterprises

Guyana has ten state-owned enterprises (SOEs) including: National Industrial and Commercial Investments Ltd. (NICIL), Guyana Sugar Corporation (GUYSUCO), MARDS Rice Complex Ltd., National Insurance Scheme (NIS), Guyana Power and Light (GPL), Guyana Rice Development Board (GRDB), Guyana National Newspapers Ltd.(GNNL), Guyana National Shipping Corporation (GNSC), and Guyana National Printers Ltd. (GNPL).

The private sector competes with (SOEs) for market share, credit, and business opportunities.  It is common for (SOEs) in Guyana to have political interventions.  This is driven through the board of directors which are filled with political appointees.  Furthermore, procurement on behalf of SOEs may be passed through the National Procurement and Tender Administration.

The Public Corporation Act requires public corporations to publish an annual report no later than six months after the end of the calendar year. These reports must be audited by an independent auditor.

Privatization Program

In the 1990s, Guyana underwent significant privatization with the divestment of many sectors.  In 1993, the Privatisation Policy Framework Paper known as the “Privatisation White Paper” was tabled in Parliament and made way for the creation of the Privatisation Unit (PU). Its function was to co-ordinate the implementation of the Government of Guyana’s (GoG’s) privatization program. The Privatisation Unit was tasked with:

  • Combining the functions of the Public Corporations Secretariat (PCS) and the National Industrial & Commercial Investments Limited (NICIL);
  • Preparing for Cabinet’s approval, the programme strategy and annual programme targets for privatization or liquidation;
  • Implementing the privatization of State-Owned-Enterprises (SOEs) and assets selected for inclusion in the program;
  • Participating in negotiations for the privatization of SOEs;
  • Reviewing offers and make recommendations to Cabinet on the terms and conditions for the sale of SOEs;
  • Preparing financial and administrative audits of SOEs not selected for privatization;
  • Developing a strategy to build public understanding and support for privatization;
  • Ensuring that transparency of the privatization programm is strictly respected and followed;
  • Monitoring operations of privatised entities in accordance with the terms and conditions of each respective contract;
  • Preparing for Cabinet, broad guidelines on operating policies for privatization, develop action plans for implementation, conduct a public relations campaign and help to build national consensus in support of government’s program.

Foreign investors have an equal access to privatization opportunities. However, there are many reports that the process lacks transparency. Currently, the government is seeking to divest from the sugar industry.

U.S. firms are generally given equal access to these projects through a public bidding process. In some cases, allegations have been made that this bidding process has been less than transparent.  In cases where international financial institution (IFI) funding has been involved in the project, such allegations have been credibly addressed. In cases where the project relied solely on GoG funds, redress has been more problematic to achieve.

8. Responsible Business Conduct

Compared to responsible business conduct (RBC) norms in North America and Europe, Guyana-based businesses lag in adopting RBC policies and activities. Local companies have improved RBC as firms react to increased levels of competition, partly to compete or subcontract with companies in the oil and gas sector that emphasize it.  Guyanese consumers are growing in awareness to RBC principles as the population becomes better sensitized. The GoG has expressed hope that large multinational companies will lead the way on RBC practices, setting an example for smaller local firms to follow, particularly in the extractive industries sector.

With Guyana’s major petroleum discovery, and anticipated production, Guyana joined the Extractive Industries Transparency Initiative (EITI) as a candidate country in October 2017.

9. Corruption 

The law provides criminal penalties for corruption by officials, but the government generally does not enforce the law effectively or uniformly. The relevant laws enacted include: the Integrity Commission Act, State Assets Recovery Act, and the Audit Act. Officials appear to engage in corrupt practices at times with impunity. Several media outlets reported on government corruption in recent years and it remains a significant public concern.  Media and civil society organizations continued to criticize the government for being slow to prosecute corruption cases.  Although the government passed legislation in 1997 that requires public officials to disclose their assets to an Integrity Commission prior to assuming office, media reports suggest that a significant section of public officials did not honor this requirement in 2019.

Widespread concerns remain about inefficiencies and corruption regarding the awarding of contracts, particularly with respect to concerns of collusion and non-transparency.  In his annual report, the Auditor General noted continuous disregard for the procedures, rules, and the laws that govern public procurement system.  There were reports on overpayments of contracts and procurement breaches.  Nevertheless, the country has made some improvements.  According to Transparency International’s 2019 Corruption Perceptions Index (CPI), Guyana is ranked 85 out of 180 countries for perceptions of corruption, advancing 8 spots in comparison to 2018.

10. Political and Security Environment 

Guyana is categorized as a “flawed” democracy according to the Economist Intelligence Unit (EIU). In December 2018 the Government of Guyana fell following the passing of the “no confidence” motion. Subsequently, a series of court cases and eventually the dissolution of Parliament at the end of 2019 allowed for national and regional elections to be held on March 2, 2020. However, ten weeks after elections the results are still unknown. Observers reported that polling on the day of elections were well administered and reflected international standards for democratic elections. Observers reported that the credibility of the process deteriorated during the tabulation of votes. The security environment has further deteriorated following the elections impasse. The security environment in the country continues to be a concern for many businesses. Businesses which are considering investing in Guyana are strongly encouraged to develop adequate security systems.  11. Labor Policies and Practices

11. Labor Policies and Practices

Local legislation governing labor in Guyana includes the National Insurance Act, Guyana Labour Act, Occupation Health and Safety Act, and the Termination of Severance and Pay Act.

According to a 2017  survey by the Guyana Bureau of Statistics, the local labor force was estimated at 299,000 with an unemployment rate of 12.2 percent  and youth unemployment of 22.9 percent .  Rural unemployed population represents the vast majority of the total unemployed (72.9 %), and the unemployment rate for women appears to be substantially higher than that for men (15.6 percent vs. 9.9 percent ).  The survey estimates that between 48.6 percent and 52.7 percent of the employed labor force is holding informal jobs. The percentage of male workers holding informal jobs is higher than that of female workers.  Most Guyanese are employed in the agriculture, wholesale and retail trade sectors.  Given the abundance of unskilled labor following divestment of the sugar industry, the economy is undergoing a structural change with retraining programs and structural changes with the preferred skillset of workers.  Guyana’s HDI for 2018 increased to 0.67 from 0.537, an increase of 24.8 percent.  Guyana’s literacy rate is estimated at 90 percent. There is an ongoing push for Information and Communications Technology (ICT) development within schools which has created a talent pool for this industry.  Recently, there has been a focus on ICT and attracting BPOs.

Guyana has one of the highest emigration rates of tertiary educated nationals. A significant number of businesses report having challenges with staff recruitment and retention.  These issues are linked to a small pool of semi-skilled and skilled workers.  Companies entering Guyana should consider training of employees.

The Trade Union Recognition Act of 1997 requires businesses operating in Guyana to recognize and collectively bargain with the trade union selected by a majority of its workers.  The government, on occasion, has unilaterally imposed wage increases. Guyana adheres to the International Labour Organization (ILO) Convention, protecting worker rights.  Labor dispute mechanisms, such as arbitration, are commonplace. In 2019, the minimum wage of the public sector workers increased to approximately $50 monthly. The private sector has a minimum wage of approximately $210.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) renewed its support for U.S. investors in Guyana in 2000, following the settlement of a long-standing dispute between an OPIC client and the GoG.

The Export-Import Bank of the United States (EX-IM) offers insurance and financing to support U.S. firms exporting to Guyana.  EX-IM will consider financing projects in which the total term of the financing is one to twelve months or one to seven years.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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) N/A N/A 2016 $3,504 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A N/A N/A BEA data available at
https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
 
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2017 $3,185 BEA data available at
https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
 
Total inbound stock of FDI as % host GDP N/A N/A 2017 88.7% UNCTAD data available at
https://unctad.org/en/Pages/DIAE/
World%20Investment%20Report/
Country-Fact-Sheets.aspx
 

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

14. Contact for More Information

Alexandra King Pile
Political and Economic Counselor

Richard Leo
Economic and Commercial Specialist
Embassy of the United States of America
100 Duke and Young Streets, Kingston
Georgetown, Guyana
Telephone: + (592) 225-4900-9 Ext. 4220 and Ext. 4213
Fax: + (592) 225-8597
Email: commercegeorgetown@state.gov
https://gy.usembassy.gov

Jamaica

Executive Summary

The Government of Jamaica (GOJ) considers foreign direct investment (FDI) a key driver for economic growth and in recent years has undertaken macroeconomic reforms that have improved its investment climate. Jamaica continued to reap benefits from its fiscal consolidation program following it successful graduation from consecutive International Monetary Fund (IMF) programs. The debt-to-GDP ratio has moderated from a peak of near 150 percent of GDP in 2013 to near 90 percent at the end of March 2020, the lowest it has been in two decades. The attendant expansion in fiscal space allowed the government to boost capital spending and reduce taxes. Under its IMF programs, the GOJ also replaced its discretionary investment incentives with legislation that simplified the income tax regime and codified tax benefits for investors. These efforts have contributed to Jamaica’s improvement in the World Bank’s Doing Business Report (DBR), from a ranking of 90 out of 190 countries in 2013 to 71 in 2020. Jamaica recently reduced or removed several distortionary taxes across a range of economic sectors. Jamaica’s improving creditworthiness, record-setting stock market performance, and proposed financial sector reforms should stimulate further local investments in productive sectors.

In anticipation of the shocks expected from the COVID-19 pandemic, the government announced a stimulus package to assist both businesses and individuals. As a contingency, the government also requested access to the IMF’s Rapid Financing Instrument (RFI). Despite projections for economic contraction of between three and five percent this year, Jamaica’s improving economic fundamentals should allow it to better withstand the shock.

Jamaica received $775 million in FDI in 2018 (latest available data), a $113 million drop over the previous year. According to the 2019 UNCTAD World Investment Report, this positioned Jamaica as the second highest FDI destination in the English-Speaking Caribbean and among the top five of Small Island Developing States. The United States, Canada, Spain, Mexico, and China continued to drive FDI in 2018. Up to the onset of COVID-19 the tourism, mining, energy, and construction sectors led investment inflows into the island. Most of these sectors, though hard hit by the global pandemic, are expected to rebound when the situation abates. Business process outsourcing (BPO), including customer service and back office support, continued to attract local and overseas investment. Investments in improved air, sea, and land transportation have reduced time and costs for transporting goods and have created opportunities in logistics.

Jamaica’s high crime rate, corruption, and comparatively high taxes have stymied its investment prospects. The country’s corruption perception ranking, by Transparency International, worsened from 70 (2018) to 74 (2019) of 175 countries. Despite laws that prescribe criminal penalties for corrupt acts by officials, there were still reports of government corruption during the year, with a minister and another public official facing several criminal charges. Measures implemented to address crime in continued into 2020, including the continuation of States of Emergency and Zones of Special Operations in several high crime areas of the island. While these efforts have resulted in the lowering crimes, Jamaica remained among the countries with the highest homicide rate in the world.

With energy price a major component of the cost of doing business, the government has instituted a number of policies to address the structural impediment. In early 2020, the government published its Integrated Resource Plan (IRP), outlining the country’s electricity roadmap for the next two decades. The document has projected 1,164 MW of new generation capacity at a cost of $7.3 billion, including fuel cost and the replacement of retired plants. Renewable sources are projected to generate 50 percent of electricity by 2037, with Liquified Natural Gas (LNG), introduced in 2016, providing the other 50 percent. The increased investment in new generation is expected to increase efficiency and reduce the price of electricity to consumers.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 74 of 180 http://www.transparency.org/research/cpi/overview
World Bank’s Doing Business Report 2019 71 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2018 81 of 126 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, stock positions) 2018 USD 167 http://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2018 USD 4,970 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Government of Jamaica (GOJ) is open to foreign investment in all sectors of the economy. The GOJ has 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 the payment of taxes and has 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 near 90 percent, the government continued to use the fiscal space to reduce and/or abolish a number of distortionary taxes and reduced the sales tax by 1.5 percentage points to 15 percent effective April 2020.

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 2020” report, Jamaica ranked 71 out of 190 economies, above average compared to Latin American and Caribbean countries. The country improved or held firm on all metrices assessed in the 2020 report, moving most significantly in the area registering property. The GoJ replaced the Ad Valorem Stamp Duty rate payable on the registration of collateral, such as property used to secure loan instruments, with a flat rate duty. Additionally, the transfer tax, payable on the change of ownership from one person to another, was also reduced during the year from five to two percent. Jamaica is ranked 80 out of 140 countries in the World Economic Forum’s 2019 Global Competitiveness Index. Bureaucracy remains a major impediment, with the country continuing to underperform in the areas of trading across borders, paying taxes, and enforcing contracts.

Jamaica’s trade and investment promotion agency, Jamaica Promotions Corporation (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 would be 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. A 2017 amendment to the Companies Act requires companies to disclose beneficial owners to the Companies Office of Jamaica (ORC).  The law mandates that the company retains 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” can be accessed 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.

3. Legal Regime

Transparency of the Regulatory System

Jamaica’s regulatory systems are transparent and consistent with international norms. Proposed legislation is available for public review at japarliament.gov.jm, and submissions are generally invited from members of the public when there is a distinct policy shift or for sensitive changes. There is no law that requires the rulemaking body to solicit comments on proposed regulation and no timeframe for the length of a consultation period when it happens. Furthermore, the law does not require reporting on public consultations but the government presents the consultations directly to interested stakeholders in one unified report. Laws in effect are available at japarliament.gov.jm or moj.gov.jm. Companies interested in doing business in a particular sector should seek guidance from the relevant regulator(s), including the Office of Utilities Regulation (OUR) for utilities, the Bank of Jamaica (BOJ) for deposit taking institutions (DTIs) and the Financial Services Commission (FSC) for non-DTIs.

Jamaica is compliant with established benchmarks for public disclosure of its budget, the establishment and functioning of an independent and supreme audit body, and the award of contracts for natural resource extraction. Additionally, Jamaica’s Public Debt Management Act (PDMA) of 2012 has codified a gradual reduction in its contingent liability or Government Guaranteed Loans (GGL), which were 7.4 percent of GDP in 2017. The PDMA targets a three percent GGL-to-GDP ratio by 2027.

International Regulatory Considerations

The GOJ tends to adopt Commonwealth standards for its regulatory system, especially from Canada and the United Kingdom. In 2001, CARICOM member states established the Regional Organization for Standards and Quality (CROSQ) under Article 67 of the Revised Treaty of Chaguaramas. CROSQ is intended to harmonize regional standards to facilitate the smooth movement of goods in the common market. Jamaica is also a full member of the WTO and is required to notify all draft technical regulations to the WTO Committee of Technical Barriers to Trade (TBT).

Legal System and Judicial Independence

Jamaica has a common law legal system and court decisions are generally based on past judicial declarations. The Jamaican Constitution provides for an independent judiciary with a three-tier court structure. A party seeking to enforce ownership or contractual rights can file a claim in the Resident Magistrate or Supreme Court. Appeals on decisions made in these courts can be taken before the Court of Appeal and then to the Judicial Committee of the Privy Council in the United Kingdom. The Caribbean Court of Justice (CCJ), in its original jurisdiction, is the court of the 15-member Caribbean Community (CARICOM), but Jamaica has not signed on to its appellate jurisdiction.Jamaica does not have a single written commercial or contractual law and case law is therefore supplemented by the following pieces of legislation: (1) Arbitration (Recognition and Enforcement of Foreign Awards) Act; (2) Companies Act; (3) Consumer Protection Act; (4) Fair Competition Act; (5) Investment Disputes Awards (Enforcement) Act; (6) Judgment (Foreign) (Reciprocal Enforcement) Act; (7) Law Reform (Frustrated Contracts) Act; (8) Loans (Equity Investment Bonds) Act; (9) Partnership (Limited) Act; (10) Registration of Business Names Act; (11) Sale of Goods Act; (12) Standards Act; and, (13) Trade Act. The commercial and civil divisions of the Supreme Court have jurisdiction to hear intellectual property claims.

Jamaica enforces the judgments of foreign courts through: (1) The Judgment and Awards (Reciprocal Enforcement) Act; (2) The Judgment (Foreign) (Reciprocal Enforcement) Act; and, (3) The Maintenance Orders (Facilities for Enforcement) Act. Under these acts, judgments of foreign courts are accepted where there is a reciprocal enforcement of judgment treaty with the relevant foreign state. International arbitration is also accepted as a means for settling investment disputes between private parties.

The Jamaican judicial system has a long tradition of being fair, but court cases can take years or even decades to resolve. A new Chief Justice appointed in 2018 has set aggressive benchmarks to streamline the delivery of judgments, bring greater levels of efficiency to court administration, and target throughput rates in line with international best practice. Efforts are currently underway to provide hearing date certainty and disposition of cases within 24 months, barring exceptional circumstances. The deployment of new courtrooms and the appointment of additional Appeal Court Judges are indicators of Jamaica’s commitment to justice reform.

Challenges with dispute resolution usually reflect broader problems within the court system, including long delays and resource constraints. Subsequent enforcement of court decisions or arbitration awards is usually adequate, and the local court will recognize the enforcement of an international arbitration award.

A specialized Commercial Court was established in 2001 to expedite the resolution of commercial cases. The rules do not make it mandatory for commercial cases to be filed in the Commercial Court and the Court is largely underutilized by litigants.

Jamaica ranked 119 in the 2019 Doing Business Report on the metric of enforcement of contracts, scoring 64.8 in the length of time taken for enforcement, 43.6 for costs associated with litigation and 52.8 on the quality of judicial processes.

Laws and Regulations on Foreign Direct Investment

There are no specific laws or regulations specifically related to foreign investment. Since foreign companies are treated similar to Jamaican companies when investing, the relevant sections of the applicable laws are applied equally.

Competition and Anti-Trust Laws

The Fair Trading Commission (FTC), an agency of the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF), administers the Fair Competition Act (FCA). The major objective of the FCA is to foster competitive behavior and provide consumer protection. The Act proscribes the following anti-competitive practices: resale price maintenance; tied selling; price fixing; collusion and cartels; and bid rigging. The Act does not specifically prohibit mergers or acquisitions that could lead to the creation of a monopoly. The FTC is empowered to investigate breaches of the Act and businesses or individuals in breach can be taken to court if they fail to implement corrective measures outlined by the FTC.

Expropriation and Compensation

Expropriation is generally not an issue in Jamaica, although land may be expropriated for national development under the Land Acquisition Act, which provides for compensation on the basis of market value. The U.S. government is not aware of any current expropriation-related litigation between the Jamaican government and any private individual or company. However, the U.S. government assisted investors who had property expropriated during the 1970’s socialist regime, with a payment in one such case received in 2010.

Dispute Settlement

ICSID Convention and New York Convention

Jamaica became a signatory to the International Center for Settlement of Disputes (ICSID) in 1965. The country is a signatory to the New York Convention (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards), which governs the recognition and enforcement of foreign arbitration awards. The Jamaican Arbitration (Recognition and Enforcement of Foreign Awards) Act enables foreign arbitral awards under the New York Convention to be enforced in Jamaica.

Investor-State Dispute Settlement

International arbitration is also accepted as a means for settling investment disputes between private parties. Jamaica enforces the judgments of foreign courts through: (1) The Judgment and Awards (Reciprocal Enforcement) Act; (2) The Judgment (Foreign) (Reciprocal Enforcement) Act; and, (3) The Maintenance Orders (Facilities for Enforcement) Act. Under these acts, judgments of foreign courts are accepted where there is a reciprocal enforcement of judgment treaty with the relevant foreign state. Jamaica does not have a history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Jamaica accepts international arbitration of investment disputes between foreign investors, the Jamaican government, and private parties. Local courts recognize and enforce foreign arbitral awards. The Caribbean Court of Justice (CCJ) serves as the region’s international tribunal for disputes within the Caribbean Community (CARICOM) Single Market and Economy. The Dispute Resolution Foundation and the Caribbean Branch of the Chartered Institute of Arbitrators both facilitate arbitration and rules of the Bilateral Investment Treaty (BIT). Other foreign investors are given national treatment and civil procedures apply. Disputes between enterprises are handled in the local courts but foreign investors can refer cases to ICSID. There were cases of trademark infringements in which U.S. firms took action and were granted restitution in the local courts. While restitution is slow, it tends to be fair and transparent. The U.S. government is not aware of any cases in which State-Owned Enterprises (SOEs) have been involved in investment disputes.

Bankruptcy Regulations

Jamaica enacted new insolvency legislation in 2014 that replaced the Bankruptcy Act of 1880 and seeks to make the insolvency process more efficient. The Act prescribes the circumstances under which bankruptcy is committed; the procedure for filing a bankruptcy petition; and the procedures to be followed in the administration of the estates of bankrupts. The reform addresses bankruptcy; insolvency, receiverships; provisional supervision; and winding up proceedings. The law addresses corporate and individual insolvency and facilitates the rehabilitation of insolvent debtors, while removing the stigma formerly associated with either form of insolvency. Both insolvents and “looming insolvents” (persons who will become insolvent within twelve months of the filing of the proposal if corrective or preventative action is not taken) are addressed in the reforms.

The Act contains a provision for debtors to make a proposal to their creditors for the restructuring of debts, subject to acceptance by the creditor. Creditors can also invoke bankruptcy proceedings against the debtor if the amount owed is not less than the prescribed threshold or if the debtor has committed an act of bankruptcy. The filing of a proposal or notice of intention to file a proposal creates a temporary stay of proceedings. During this period, the creditor is precluded from enforcing claims against the debtor. The stay does not apply to secured creditors who take possession of secured assets before the proposal is filed; gives notice of intention to enforce against a security at least 10 days before the notice of intention or actual proposal is filed; or, rejects the proposal. The 2014 legislation makes it a criminal offence if a bankrupt entity defaults on certain obligations set out in the legislation.Jamaica ranked 34 on Resolving Insolvency in the 2020 World Bank’s Doing Business Report. Bankruptcy proceedings take about a year to resolve, costing 18 percent of the estate value with an average recovery rate of 65 percent.The text of the Bankruptcy and Insolvency Act can be found at: http://www.japarliament.gov.jm/attachments/341_The%20Insolvency%20Act%202014%20No.14%20rotated.pdf 

4. Industrial Policies

Investment Incentives

The Fiscal Incentives (Miscellaneous Provisions) Act 2013 repeals most of the legacy incentive legislation and provides flexibility for new tax incentives only to be granted in relation to the bauxite sector, special economic zone activities, the relocation of corporate headquarters, and Junior Stock Exchange listings. The Act also outlines the arrangement for transitioning to the new regime. Continuing beneficiaries may elect to keep old incentives such as relief from income tax and customs duty as well as zero-rated General Consumption Tax (GCT) status for imports.

Below are short descriptions of notable, recently enacted investment incentives.

Omnibus legislation – Provides tax relief on customs duties, additional stamp duties, and corporate income tax. These benefits are granted under the following four areas: (1) The Fiscal Incentives Act: Targets small and medium size businesses and reduces the effective corporate income tax rate by applying: (a) an Employment Tax Credit (ETC) at a maximum value of 30 percent; and (b) a capital allowance applicable to a broadened definition of industrial buildings.

(1) The Fiscal Incentives Act: Targets small and medium size businesses and reduces the effective corporate income tax rate by applying: (a) an Employment Tax Credit (ETC) at a maximum value of 30 percent; and (b) a capital allowance applicable to a broadened definition of industrial buildings. (2) The Income Tax Relief (Large-Scale Projects and Pioneer Industries) Act: Targets large-scale projects and/or pioneering projects and provides for an improved and more attractive rate for the ETC. Projects will be designated either as large-scale or pioneer based on a decision by Parliament and subject to an Economic Impact Assessment.

(2) The Income Tax Relief (Large-Scale Projects and Pioneer Industries) Act: Targets large-scale projects and/or pioneering projects and provides for an improved and more attractive rate for the ETC. Projects will be designated either as large-scale or pioneer based on a decision by Parliament and subject to an Economic Impact Assessment. (3) Revised Customs Tariff: Provides for the duty free importation of capital equipment and raw material for the productive sectors.

(3) Revised Customs Tariff: Provides for the duty free importation of capital equipment and raw material for the productive sectors. (4) Revised Stamp Duty Act: Provides exemption from additional stamp duty on raw materials and non-consumer goods for the manufacturing sector.

(4) Revised Stamp Duty Act: Provides exemption from additional stamp duty on raw materials and non-consumer goods for the manufacturing sector.

Urban Renewal Act: Companies that undertake development within Special Development Areas can benefit from Urban Renewal Bonds, a 33.3 percent investment tax credit, tax-free rental income, and the exemption from transfer tax and stamp duties on the ‘improved’ value of the property.

Bauxite and Alumina Act: Under this Act, bauxite/alumina producers are allowed to import all productive inputs free of duties, Value Added Tax (VAT), and other port related taxes and charges.

The Foreign Sales Corporation Act: This Act exempts income tax for five years for qualified income arising from foreign trade. U.S. law through the Tax Information Exchange Agreement (TIEA) reinforces this incentive.

Jamaica’s EX-IM Bank provides concessionary interest rate loans for trade financing, while the Development Bank of Jamaica offers reduced lending rates to the productive sectors. Special tax incentives exist for companies that register on the Junior Stock Exchange.

Income Tax Act (Junior Stock Exchange): As of January 1, 2014, companies listed on the Junior Stock Exchange are not required to pay income tax during the first five years and 50 percent for the next five years.

Special Economic Zone Act: In 2015, Jamaica passed legislation establishing Special Economic Zones (SEZs). The SEZ Act repeals the Jamaica Free Zone Act, making way for: (1) the designation; promotion; development; operation; and, management of Special Economic Zones; (2) the establishment of a SEZ Authority; and, (3) the granting of benefits and other measures in order to attract domestic and foreign investments.

Productive inputs relief (PIR): There is relief from customs duty and additional stamp duty on the importation of certain ‘productive inputs’ that are directly used in the ‘production of primary products’ or the ‘manufacture of goods’. In addition to the manufacturing and agricultural sectors, relief is also granted on certain products imported for use in the tourism, creative arts, and healthcare industries.

Research and Development

Foreign firms are allowed to participate in GOJ-financed or subsidized research and development, however, few opportunities exist for such programs.

Government Guarantee and Private-Public Partnership

The GOJ, through the PDMA of 2012, reduced the tendency of government to provide sovereign guarantees on loans, which often had to be converted into public debt. The debt reduction imperatives built into successive IMF programs further stymied this propensity.

The GOJ, however, continues to actively encourage FDI utilizing the Public-Private Partnership (PPP or P3) model, to attract private financing. Jamaica has successfully implemented a number of PPP projects to include the divestiture of the Kingston Freeport Terminal, the Sangster International Airport in Montego Bay, and Norman Manley International Airport in Kingston. Jamaica seeks to expedite the divestment of government assets through PPPs and public listings in order to drive private capital to otherwise stagnant government assets.

Foreign Trade Zones/Free Ports/Trade Facilitation

As of February 2020, there were 131 entities in Jamaica’s Special Economic Zones (SEZ), most of which transitioned from Free Trade Zones. Free Zone companies which have not transitioned fully into the SEZ regime have until June 2020 to submit applications. Operations in Jamaica’s SEZs include business process outsourcing (BPO); warehousing and distribution; manufacturing; logistics; and merchandising. The Jamaica Special Economic Zone Authority (www.jseza.com ) regulates, supervises, and promotes the Special Economic Zone (SEZ).

SEZ operators benefit from a 12.5 percent corporate income tax rate (effective rate may be as low as 7.5 percent with the approval of additional tax credits); customs duty relief, General Consumption Tax (GCT) relief; employment tax credit; promotional tax credit on research and development; capital allowance; and a stamp duty payable of 50 percent. Developers receive these benefits plus relief from income tax on rental income and relief from transfer tax. There is a non-refundable one-time registration fee and renewable annual fee to enter the regime. Duty-free zones are primarily found in airports, hotels, and tourist centers and, as with special economic zone activities, do not discriminate on the basis of nationality.

Performance and Data Localization Requirements

No performance requirements are generally imposed as a condition for investing in Jamaica, and government of Jamaica (GOJ) imposed conditions are not overly burdensome. The GOJ does not mandate local employment, although the use of foreign workers to fill semi-skilled and unskilled jobs is generally frowned upon, especially by trade unions. When requesting work permits for foreign workers, both local and foreign employers must describe efforts to recruit locally. The GOJ requires a description of efforts to recruit locally. The U.S. government has heard of delays in obtaining work permits for foreign workers as the GOJ does not readily have data available to determine if the requisite skills exist in Jamaica.

The GOJ does not follow “forced localization,” requiring domestic content in goods or technology. There are no requirements to provide the GOJ access to surveillance of data and there are no restrictions on maintaining certain amounts of data storage within the country.

5. Protection of Property Rights

Private entities, whether foreign or domestic, generally have the right to freely establish, own, acquire, and dispose of business enterprises and may engage in all forms of remunerative activity.

Real Property

Property rights are guaranteed by the Jamaican Constitution. The Registration of Titles Act recognizes and provides for the enforcement of secured interests in property by way of mortgage. It also facilitates and protects the acquisition and disposition of all property rights, though working through Jamaica’s bureaucracy can result in significant delays. In particular, it sometimes takes a long time for landowners to secure titles.

Approximately 55 percent of the land in Jamaica is registered, although a large percentage of those properties do not have current title, as many families who pass land ownership from parent to child often do not go through the proper legal channels due to the cost and time involved.

Squatting is also a major challenge in Jamaica, with nearly 20 percent of the population living as squatters. Three-quarters of squatters reside on government lands. Under the Registration of Titles Act, a squatter can claim a property by adverse possession (without compensating the owner for the land) if a person can demonstrate that he or she has lived on government land for more than 60 years, or on private property for more than 12 years undisturbed (including without any payment to the land owner). There are no specific regulations regarding land lease or acquisition by foreign and/or non-resident investors.

The country’s World Bank Doing Business Report ranking for ease of “registering property” was 85 in 2020, improving significantly due to the reduction in cost associated with transferring and registering collateral using property. Jamaica continued to outperform other Latin America and Caribbean countries in the time required to close a property transaction.

Registration of Titles Act: http://moj.gov.jm/sites/default/files/laws/Registration%20of%20Titles.pdf 

Intellectual Property Rights

Jamaica has one of the stronger intellectual property (IP) protection regimes in Latin America and the Caribbean, according to the International Property Rights Index, although legislative and enforcement gaps still exist. Jamaica is a member of the World Intellectual Property Organization (WIPO) and is a signatory of the Berne Convention. Jamaica and the United States have an Intellectual Property Rights Agreement and a Bilateral Investment Treaty, which provide assurances to protect intellectual property rights (IPR). It is relatively easy to register IP, and the Jamaica Intellectual Property Office (JIPO) assists parties interested in registering IP and supports IP owners’ efforts to enforce their rights. Overall, protections across all types of IP are improving.

Law enforcement efforts to combat counterfeit and pirated goods are improving on the ground but border enforcement remains a challenge. IPR violations tend to be more in relation to physical goods, while electronic IPR theft is less common.

The country’s trademark and copyright regimes satisfy the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). In January 2020, the country passed its long-awaited TRIPS-compliant Patent and Designs Bill and has been removed from the United States Trade Representative Special 301 Report’s Watchlist. The Geographical Indications Act (GI) of 2004 is now fully in force and TRIPS-compliant, protecting products whose particular quality or reputation is attributable to its geographical origin. General law provides protection for trade secrets, and protection against unfair competition is guaranteed under the Fair Competition Act.

In the area of copyright protection, amendments to the Copyright Act passed in June 2015 fulfilled Jamaica’s obligations under the WIPO Internet Treaties and extended copyright protection term from 50 to 95 years. The Copyright Act complies with the TRIPS Agreement, adheres to the principles of the Berne Convention, and covers works ranging from books and music to computer programs. Amendments in June 1999 explicitly provide copyright protection on compilations of works such as databases and make it an offense for a person to manufacture or trade in decoders of encrypted transmissions. It also gives persons in encrypted transmissions or in broadcasting or cable program services a right of action against persons who infringe upon their rights.

The Jamaica Constabulary Force established a specialized intellectual property unit within its counterterrorism and organized crime branch (C-TOC) in 2015 to boost IPR enforcement. The unit continued to work with the Contraband Enforcement Team of the Jamaica Customs Agency to seize and destroy counterfeit goods, while pursing criminal proceedings where possible. In 2019, C-TOC destroyed more than $18 million in counterfeit goods. The most commonly counterfeited goods include shoes, alcohol, cigarettes, clothing, handbags, and pharmaceuticals. Jamaica’s border enforcement efforts are hampered by customs officers not having ex officio authority to seize and destroy counterfeit goods. Rights holders must first be provided with visual samples of suspect merchandise to verify the item as counterfeit, submit a declaration indicating the differences between the fake and actual brands, and provide an authorization to seize the merchandise.  Rights holders are responsible for paying the costs associated with storage and destruction of counterfeit goods. Presently the Commissioner of Customs may grant up to 10 days for a rights holder to produce the required evidence and commitments before releasing suspected counterfeit goods that are in transit.

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

6. Financial Sector

Capital Markets and Portfolio Investment

Credit is available at 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 the top performing capital market indices in 2018 and was among the top five performers in 2019. The Financial Services Commission (FSC) and the Bank of Jamaica (BOJ), the central bank, regulate these activities. Jamaica adheres to IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions.

Money and Banking System

At the end of 2019 there were 11 deposit-taking institutions (DTIs) 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 25 at the end of 2019. Commercial banks held assets of approximately $12 billion and liabilities of $10 billion at the end of 2019. Non-performing loans (NPL) of $140 million at end December 2019, were 2.2 percent of total loans. Five 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, Canadian dollars, and United Kingdom 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 2019 International Narcotics Control Strategy Report (INCSR), while noting that the GoJ has enacted legislation to address corruption.

In February 2020, Jamaica was grey listed by the Financial Action Task Force, for failing to address some of the deficiencies identified in the 2017 Caribbean Financial Action Task Force Mutual Evaluation Report (MER) on anti-money laundering and counter-terrorist financing measures (https://www.cfatf-gafic.org/index.php/documents/4th-round-meval-reports ).

Having entered an Observation Period following the 2017 publication of the MER, Jamaica’s progression towards remedying partially and non-compliant areas was slow. GoJ has developed a FAFT action plan which includes developing a broader understanding of its money laundering/terrorist financing risk and including all financial institutions and designated non-financial businesses and professions in the AML/CFT regime, and ensuring adequate risk-based supervision in all sectors.

Sovereign Wealth Funds

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

7. State-Owned Enterprises

A legacy initiative of Jamaica’s Stand-By Agreement with the IMF, is the reformation of 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 148 public bodies, 55 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.

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. In 2012, the GOJ approved a Corporate Governance Framework (CGF) under which persons appointed to boards should possess the skills and competencies required for the effective functioning of the entity. With some board members being selected on the basis of their political affiliation, the government is in the process of developing new board policy guidelines. The Jamaican court system, while 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 2019, the GoJ divested two of its major assets through initial public offerings: a 62-megawatt wind farm, through a public offering, which raised almost $40 million, and a toll highway, which raised almost $90 million. 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 also seeks to divest assets owned by large government entities such as the Urban Development Corporation and the Factories Corporation of Jamaica.

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

8. Responsible Business Conduct

Responsible Business Conduct (RBC) among many Jamaican companies is a developing practice, with more established companies further along the scale. In 2013, the government provided additional financial incentives for corporations to support charity work through the Charities Act, under which corporations and individuals can claim a tax deduction on contributions made to registered charitable organizations. Some large publicly listed companies and multinational corporations in Jamaica maintain their own foundations that carry out social and community projects to support education, youth employment, and entrepreneurship.

In 2018, the GOJ became party to the OECD’s Base Erosion and Profit Shifting Multilateral Convention, which updates the network of bilateral tax treaties and reduces opportunities for tax avoidance by multinational enterprises. GOJ also became signatory to the Convention on Mutual Administrative Assistance in Tax Matters, effective March 1, 2019, having deposited instruments of ratification in November 2018.

9. Corruption

Jamaican law provides criminal penalties for corruption by public officials, however, there is at least circumstantial evidence that some officials engage in corrupt practice. There were also reports of government corruption in 2019 and it remained a significant problem of public concern. Media and civil society organizations continued to criticize the government for being slow and at times reluctant to tackle corruption .

Under the Corruption Prevention Act, public servants can be imprisoned for up to 10 years and fined as much as USD 100,000 if found guilty of engaging in acts of bribery, including bribes to foreign public officials.

In 2017, Jamaica passed an Integrity Commission Act that consolidated three agencies with anti-corruption mandates into a single entity, the Integrity Commission, which now has limited prosecutorial powers.  The three agencies are the precursor Integrity Commission, which received and monitored statutory declarations from parliamentarians; the Office of the Contractor General (OCG), which monitored government contracts; and the Commission for the Prevention of Corruption, which received the financial filings of specified public servants. A key area of concern for corruption is in government procurement. However, successful prosecutions – particularly for high-level corruption – are rare.

Two Ministers of government demitted office between 2018 and March 2019, in the wake of corruption allegations.

Corruption, and its apparent linkages with organized crime, appear to be one of the root causes of Jamaica’s high crime rate and economic stagnation.  In 2019, Transparency International gave Jamaica a score of 43 out of a possible 100 on the Corruption Perception Index (CPI), demoting the island four spots from its ranking of 70th in 2018 to 74th globally.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Jamaica ratified major international corruption instruments, including the Inter-American Convention Against Corruption and the United Nations Convention Against Corruption. Jamaica is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Major Organised Crime and Anti-Corruption Agency (MOCA)
24hr Hotline:
1-800-CORRUPT (1-800-267-7878)
Email: info@moca.gov.jm

National Integrity Action
2 Holborn Road
Kingston 10, Jamaica
Phone: 1 876 906 4371/ Fax: 876-754-7951
Email: info@niajamaica.org

10. Political and Security Environment

Crime poses a greater threat to foreign investment in Jamaica than political violence, as the country has not experienced any major political violence since the early 1980s. Violent crime, rooted in poverty, unemployment, and transnational criminal organizations, is a serious problem in Jamaica. Sporadic gang violence and shootings are concentrated in specific inner-city neighborhoods, but can occur elsewhere. There were 1,326 murders in Jamaica in 2019, giving the island a homicide rate of 47.4 per 100,000, marginally higher than 2018’s rate of 47 but 21.9 percent lower than in 2017. Jamaica had the second highest homicide rate in the Caribbean and Latin America in 2019. Jamaica also faces a significant problem with extortion in certain urban commercial areas and on large construction project sites. The security challenges increase the cost of doing business as companies spend on additional security measures.

The U.S. Department of State Travel Advisory (in May 2020) assessed Jamaica at Level 2, indicating travelers should exercise increased caution. U.S. companies with personnel assigned to Jamaica are strongly advised to conduct security and cultural awareness training.

Please refer to the Jamaica 2019 Crime and Safety Report from the Department of State’s Overseas Security Advisory Council (OSAC) for additional information (https://www.osac.gov/Country/Jamaica/Detail ).

11. Labor Policies and Practices

Jamaica had an estimated labor force of 1.4 million as of January 2020 with 7.3 percent unemployment. Women make up 46 percent of the labor force and have an unemployment rate of 9 percent. Unemployment is highest within the 25-34 age cohort. Most Jamaicans are employed in services including the retail and tourism sectors, followed by construction, transportation, and communications. Since 1999, more Jamaicans have become trained in information technology and the business process outsourcing (BPO) industry currently employs more than 40,000 people.

No law requires hiring locals, but foreign investors are expected to hire locals, especially for unskilled and lower skilled jobs. Under the Work Permit Act, a foreign national who wishes to work in Jamaica must first apply for a permit issued by the Ministry of Labor and Social Security. The law, which seeks to give first preference to Jamaicans, requires organizations planning to employ foreign nationals to prove that attempts were made to employ a Jamaican national.

The security guard industry adopted the practice of employing workers on extended contracts to avoid some of the cost, including severance, associated with direct employment. Jamaica does not have a history of waiving labor laws to retain or attract investment and these laws tend to be uniform across the economy.

There are no restrictions on employers adjusting employment to respond to market conditions, but there are severance payment requirements if a position is made redundant. Under the law, there is a distinction between a layoff and a redundancy. A layoff allows a temporary period without employment for up to four months. The Employment (Termination and Redundancy Payments) Act provides redundancy pay to employees who are let go with at least two years of continuous employment. Workers with up to 10 years of employment are entitled to two weeks payment for every year worked, while workers with over 10 years employment are entitled to three weeks payment except in cases such as firing for cause. There are no unemployment benefits in Jamaica but low income Jamaicans have the option of applying for social benefits under a conditional cash transfer program referred to as the Program for Advancement though Health and Education (PATH).

The law provides for the rights of workers to form or join unions, to bargain collectively, and the freedom to strike. Trade union membership accounts for about 20 percent of the labor force, although the movement has weakened in recent years. The law prohibits anti-union discrimination, although it is not uncommon for private sector employers to lay off union workers and rehire them as contractors. Labor law entitles protections to all persons categorized as workers, although it denies contract workers coverage under certain statutory provisions, such as redundancy benefits.

Jamaica has an Industrial Disputes Tribunal (IDT) to which the Minister of Labor and Social Security may refer disputes unsettled at the local level. The law denies collective bargaining if no single union represents at least 40 percent of the workers in the unit. Unionization is limited in Jamaica’s free zones.

Jamaica ratified most International Labor Organization (ILO) Conventions and international labor rights are recognized within domestic law. Jamaica has ratified all key international conventions concerning child labor and established laws and regulations related to child labor, including in its worst forms. However, gaps still exist in Jamaica’s legal framework to adequately protect children from child labor. The GOJ is under-resourced for investigations on worker abuse as well as on occupational safety and health checks.

Jamaica’s workplace policy incorporates all of the recommended practices of the ILO code of practice on HIV/AIDS but the legislation to regulate enforcement is not yet ratified. In conjunction with the ILO and local stakeholders, the GOJ passed legislation guiding flexible working arrangements.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

The U.S. International Development Corporation (DFC) created by the Better Utilization of Investments Leading to Development (BUILD) Act of 2018, consolidates the activities of OPIC and the Development Credit Authority. The new institution has been better capitalized (USD 60 billion) to help U.S. businesses invest in, especially infrastructure projects in developing countries. OPIC had financed many projects in Jamaica and recently provided financing and political risk insurance for two large renewable energy projects, as well as a grid upgrade project for the monopoly power utility. Jamaica is a member of the Multilateral Investment Guarantee Agency (MIGA).

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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) 2018* $15.98B 2018 $15.74B www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2017 $258.6 2017 $167 BEA data available at
https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
 
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A N/A N/A BEA data available at
https://www.bea.gov/international/
direct-investment-and-multinational-
enterprises-comprehensive-data
 
Total inbound stock of FDI as % host GDP N/A N/A 2018 25.7% UNCTAD data available at
https://unctad.org/en/Pages/DIAE/
World%20Investment%20Report/
Country-Fact-Sheets.aspx
 

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

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward Amount 100% Total Outward Amount 100%
USA 246.1 31.7 N/A
Spain 130.0 16.8
France 118.0 15.2
China 50.0 6.4
Mexico 40.0 5.2
Other 191.4 24.7

Table 4: Sources of Portfolio Investment
Data not available.

14. Contact for More Information

Joe James
Economic/Commercial Officer
kingstoncommercial@state.gov
142 Old Hope Road
Kingston 6, Jamaica
+1 876-702-6000

Trinidad and Tobago

Executive Summary

Trinidad and Tobago (TT) is a high-income developing country with a gross domestic product  (GDP) per capita of $17,320 and an annual GDP of $23.9 billion (2018).  It has the largest economy in the English-speaking Caribbean and is the third most populous country in the region with 1.4 million inhabitants.  The International Monetary Fund predicts GDP for 2020 to fall by 4.5 percent due to the early 2020 collapse in global energy prices and the economic impact of coronavirus mitigation.  TT’s investment climate is generally open and most investment barriers have been eliminated, but stifling bureaucracy and opaque procedures remain.
Positive aspects of TT’s investment climate:

  • Stable, democratic political system
  • Educated, English-speaking workforce
  • Well-capitalized and profitable commercial banking system and insurance industry
  • Established rule of law
  • Independent judicial system that is substantively fair
  • In certain sectors, lack of domestic competition
  • No foreign ownership limits

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, such as enforcement of contracts
  • Violent crime

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 half of GDP and 80 percent of export earnings.  Petrochemicals and steel are other sectors accounting for significant foreign investment.  Since the economy is tethered to the energy sector, it is particularly vulnerable to fluctuating prices for hydrocarbons and petrochemicals.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 85 of 183 http://www.transparency.org/
research/cpi/overview
World Bank’s Doing Business Report 2020 105 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2019 91 of 129 https://www.globalinnovationindex.org/
analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2018 $6,338 http://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2018 $15,950 http://data.worldbank.org/
indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The government of Trinidad and Tobago seeks foreign direct investment and has traditionally welcomed U.S. investors.

The U.S. Mission is not aware of laws or practices that discriminate against foreign investors, but some have seen the decision-making process for tenders and the subsequent awarding of contracts turn opaque without warning, especially when their interests compete with those of well-connected local firms.

InvesTT is TT’s investment promotion agency that assists investors through the process of setting up a business and provides aftercare services once established. Specifically, it provides market information; offers advice on accessing investment incentives; and assists with regulatory and registry issues; property and location services; creation of business linkages; problem solving; and advocacy to the government.  The TT International Financial Center is another investment promotion agency whose mission is to attract and facilitate foreign direct investment in the financial services sector.

While Trinidad and Tobago prioritizes investment retention, the U.S. Mission is not aware of a formal, ongoing dialogue with investors, either through an Ombudsman or formal business roundtable.

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. A license is required to own more than a 30 percent of a public company.

The U.S. Mission is not aware of any sector-specific restrictions to U.S. investors.

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

Other Investment Policy Reviews

The World Trade Organization conducted a trade policy review for Trinidad and Tobago in 2019: https://www.wto.org/english/tratop_e/tpr_e/tp488_e.htm 

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 ranks 158th of 190 countries for registering property, 174th for enforcing contracts, and 166th for payment of taxes in the World Bank’s Doing Business 2020 report, representing a deterioration of indicators that reflect a difficulty of doing business.

The business registration website is www.ttbizlink.gov.tt.  The process is clear but is not complete, as payments cannot be done online and aspects of the process must be completed in person.  Foreign companies can use the website. The agencies with which a company must typically register include:

  • Companies Registry, Ministry of Legal Affairs
  • Board of Inland Revenue
  • National Insurance Board
  • Value Added Tax (VAT Office, Board of Inland Revenue)

The Global Enterprise Registration Network (GER) gives the TT business registration website 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.

Outward Investment

The host government does not promote or incentivize outward investment.

The host government does not restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

TT has bilateral investment treaties (BIT) with Canada, China, France, Germany, Guatemala, India, Korea, Mexico, Spain, Switzerland, United Kingdom and the United States. TT has signed free trade agreements with the following countries, either bilaterally or as a part of CARICOM: Costa Rica, Cuba, Dominican Republic, Panama, and Venezuela. TT is not currently engaged in any BIT or FTA negotiations.

A bilateral taxation treaty with the United States took effect in 1970: https://www.irs.gov/pub/irs-trty/trinidad.pdf .  The Trinidad and Tobago government is in the process of modernizing its tax collection regime with the establishment of a new central revenue authority.  There are no ongoing systemic tax disputes between the government and foreign investors or other taxation issues of general concern to U.S. investors.

3. Legal Regime

Transparency of the Regulatory System

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

There are no informal regulatory processes managed by non-governmental organizations or private sector associations.

Rule-making and regulatory authority exist within the ministries and regulatory agencies at the national level. The government consults frequently, but not always, with international agencies and business associations in developing regulations.  The government submits draft regulations to parliament for approval.  The process is the same for each ministry.

Accounting, legal, and regulatory procedures are transparent and consistent with international norms.  IFRS standards are required for domestic public companies.

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.

All draft bills and regulations are printed in the official gazette, and an electronic version is available (listed below).  The content is usually the actual draft text.

www.news.gov.tt/content/e-gazette# 

www.ric.org.tt ;

www.ttparliament.org 

The U.S. Mission is not aware of an oversight or enforcement mechanism that ensures the government follows administrative processes.

There has not been any announcement regarding reforms to the regulatory system, including enforcement, since the last ICS report.  Regulatory reform efforts announced in prior years, such as the mechanism to calculate and collect property tax and the establishment of the revenue authority, have not been fully implemented.

Establishment of the revenue authority is intended to increase collections and streamline the system for paying taxes.

At present, regulatory enforcement mechanisms are usually a combination of moral suasion and the use of applicable administrative, civil or criminal sanctions.  The enforcement process is not legally reviewable.

Regulation is usually reviewed based on scientific- or data-driven assessments.  Scientific studies or quantitative analyses are not made publicly available.  Public comments received by regulators are generally not made public.

Public finances and debt obligations are transparent and publicly available on the central bank website

International Regulatory Considerations

Trinidad and Tobago is not part of a regional economic block, though it is part of the Caribbean Community (CARICOM), a regional trading bloc that gives duty-free access to member goods, free movement to some members and establishes common treatment of non-members on specific issues.  The Caribbean Single Market and Economy (CSME) is an initiative currently being explored by CARICOM that would eventually integrate its member-states into a single economic unit.  When fully completed, the CSME would succeed CARICOM.

Legal, regulatory, and accounting systems are generally consistent with United Kingdom standards.

The government has not consistently notified the World Trade Organization (WTO) Committee on Technical Barriers to Trade (TBT) of draft technical regulations.

Legal System and Judicial Independence

TT’s legal system is based on English common law.  Contracts are legally enforced through the court system.

The country has a written commercial law.  There are few specialized courts, making the resolution of legal claims time consuming.  An industrial court exclusively handles cases relating to labor practices but also suffers from severe backlogs and is widely seen to favor claimants.

Civil cases of less than $2,250 are heard by the Magistrate’s Court.  Matters exceeding that amount are heard in the High Court of Justice, which can grant equitable relief.  There is no court or division of a court dedicated solely to hearing commercial cases.

TT’s judicial system is independent of the executive and the judicial process is competent, procedurally and substantively fair, and reliable, although very slow.  According to the World Bank’s Doing Business 2020 report, Trinidad and Tobago ranks 174 of 190 in ease of enforcing contracts, and its court system requires 1,340 days to resolve a contract claim, nearly double the Latin American and Caribbean regional average.

Decisions may be appealed to the Court of Appeal in the first instance.  The United Kingdom Privy Council Judicial Committee is the final court of appeal.

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.

There is no “one-stop-shop” website for investment providing relevant laws, rules, and procedures.  Useful websites to help navigate foreign investment laws, rules, and procedures are:

http://www.legalaffairs.gov.tt 

https://www.rgd.legalaffairs.gov.tt 

http://www.tradeind.gov.tt 

Competition and Anti-Trust Laws

The Fair-Trading Commission is responsible for promoting and maintaining fair competition in the domestic market.  It is tasked with investigating the various forms of anti-competitive business conduct set out in the Fair-Trading Act. Legislation operationalizing this agency in 2006 was not proclaimed by the president until February 2020, so the agency is untested with regard to will and capacity to fulfill its mission.

Expropriation and Compensation

The government can legally expropriate property based on the needs of the country and only after due process including adequate compensation, generally based on market value.  Various pieces of legislation make provisions for compulsory licensing in the interest of public health or intellectual property rights.

The U.S. Mission 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.  Energy sector contacts occasionally describe the tax regime as confiscatory, pointing to after-the-fact withdrawal or weakening of tax incentives offered to entice investment once investment occurs.

Claimants did not allege a lack of due process in prior expropriation cases.

Dispute Settlement

ICSID Convention and New York Convention

TT is a party to the International Centre for the Settlement of Investment Disputes (ICSID Convention) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York convention).

Local courts recognize and enforce foreign arbitral awards according to chapter 20 of the Arbitration (Foreign Arbitral Awards) Act 1996.

Investor-State Dispute Settlement

The bilateral investment treaty between the United States and TT recognizes binding arbitration of investment disputes.

The U.S. Mission is not aware of any claims by U.S. investors under the bilateral investment treaty with the United States.

The U.S. Mission is unaware of any disputes involving U.S. or other foreign investors over the past 10 years.

There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Some of the available types of alternative dispute resolution include mediation and arbitration.  The Civil Proceedings Rules encourage parties to make reasonable attempts to resolve their disputes amicably with litigation as a last resort. Mediation and arbitration are most commonly used.

There is a domestic dispute resolution center that offers arbitration services.  Domestic legislation, the Arbitration Act of 1939, is based on early English arbitration legislation and is not modeled on internationally accepted regulations.

The U.S. Mission has no records of any investment disputes involving an SOE.

Bankruptcy Regulations

Creditors have the right to be notified within 10 days of the appointment of a receiver and to receive a final report, a statement of accounts, and an assessment of claim.  Claims of secured creditors are prioritized under the Bankruptcy Act.  No distinction is made between foreign and domestic creditors or contract holders.  Bankruptcy is not criminalized.

The World Bank ranked TT 83rd of 190 countries in resolving insolvency in its Doing Business 2020 report.  This reflects TT’s recovery rate (cents on the dollar), which is worse than the regional average, and cost as a percentage of estate.

4. Industrial Policies

Investment Incentives

Investment incentives include the following: exemption from import duties and customs duties; tax credits and deferrals; cash refunds; carry-over of losses; and access to loans.  These are available equally to foreign and domestic investors, but delays in cash refund payments are a frequent complaint of those due them.  Additional information is available on the following websites:

https://www.finance.gov.tt/mof-investment-incentives-in-trinidad-and-tobago/ 

www.investt.com 

The government sometimes jointly finances foreign direct investment projects, but it not common.  One recent example was the government-driven proposal for a Sandals resort in Tobago, for which the government would provide financing for the construction of the development. (This deal eventually fell through.)

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.  Foreign owned firms have the same investment opportunities as Trinidad and Tobago entities.  There are currently 15 approved enterprises located in eight free zones.  The majority are located within a multiple-user site in north-central Trinidad, but the minister of trade and industry can designate any suitable area in TT as a free zone.

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 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.

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.  For more information, please review the following website: http://ttfzco.com/ 

Performance and Data Localization Requirements

The government 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.

The government does not mandate that locals be recruited to senior management and boards of directors.

Several foreign firms have encountered inconsistencies leading to long delays in the issuance of long-term work permits, but there are no explicit, onerous requirements.

There are no government/authority-imposed conditions on permission to invest.

There are no forced localization requirements.

There are no performance requirements, and thus no enforcement procedures.  There is no indication of an intention to implement across-the-board performance requirements.

Investment incentives are uniform for domestic and foreign investors but offered on a case-by-case, vice across-the-board, basis.

There are no requirements for foreign IT providers to turn over source code and/or provide access to encryption.

There are no measures that prevent or restrict companies from freely transmitting customer or other business-related data outside the country.

There are no rules on local data storage within Trinidad and Tobago.

5. Protection of Property Rights

Real Property

Property rights and interests are enforced in court.  Mortgages and liens exist.  TT has a dual system of land titles, the old common law system and the registered land title system governed by the Real Property Act of 1946.  Nearly 80 percent of land in TT remains under the more complicated common law system, which is not reliable for recording secured interests.

The Foreign Investment Act of 1990 governs the acquisition of any interest in land by foreign investors. It states that foreign investors wishing to acquire land larger than five acres must obtain a license from the Ministry of Finance.  Licenses are generally granted in practice per the criteria provided here: https://www.finance.gov.tt/wp-content/uploads/2014/05/51.pdf .

It is not clear what proportion of land does not have clear title.  The government does not make a defined effort to identify property owners and register land titles.

In the World Bank’s Doing Business 2020 report, Trinidad and Tobago ranked 158 out of 190 countries in ease of registering property.  Reasons for the poor score include the number of procedures required (more than the regional average), the length of time required (more than the regional average) and the cost of registering property as a percentage of the property value.

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

Trinidad and Tobago’s  intellectual property rights (IPR) legal structure is strong, but enforcement is generally weak.  Infringement on rights and theft is common.

Trinidad and Tobago is a member of the World Intellectual Property Organization (WIPO).  In 2019, Trinidad and Tobago acceded to four intellectual property treaties: 1) the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations; 2) the Singapore Treaty on the Law of Trademarks; 3) the Marrakesh Treaty to Facilitate Access to Published Works by Visually Impaired Persons and Persons with Print Disabilities; and 4) the Beijing Treaty on Audiovisual Performances.  Each of these offers additional opportunity for international intellectual property  rights-holders to enforce their rights  in Trinidad and Tobago courts.  Legislation necessary to accede to the 1989 Madrid Protocol on Trademarks has been pending since 2015, and implementing regulations remain in drafting for the 2000 Patent Law Treaty.

Trinidad and Tobago does not track seizures of counterfeit goods.  At its May 2019 WTO Trade Policy Review, it reported one seizure in 2018.  The country has prosecuted IPR violations in the past, but such prosecutions are uncommon.

TT returned to the United States Trade Representative Special 301 Report’s Watch List in 2020.  Challenges concern widespread copyright infringement and the country’s lack of institutional commitment to enforce IPR.

Trinidad and Tobago is not included in the Notorious Markets List..

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/

6. Financial Sector

Capital Markets and Portfolio Investment

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 enough liquidity in the markets to enter and exit sizeable 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.  Shortages of foreign exchange, exacerbated by the government’s maintenance of the local currency at values higher than those which the market would bear, however, cause considerable delays in payments and transfers for international transactions.

A full range of credit instruments is available to the private sector.  There are no restrictions on borrowing by foreign investors, who are able to access credit.  Credit is allocated on market terms, but interest rates tend to be higher for foreign borrowers.

Money and Banking System

Banking services are widespread throughout urban areas, but penetration is significantly lower in rural areas.

The banking sector is healthy.

In 2019, the estimated total assets of Trinidad and Tobago’s largest banks was $21.9 billion.

TT has a central bank system.

Foreign banks may establish operations in TT provided they obtain a license from the central bank.  Trinidad and Tobago has lost correspondent banking relationships in the past three years.  The U.S. Mission is not aware of any current correspondent banking relationships that are in jeopardy.

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

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment.

Shortages of foreign exchange, exacerbated by the government’s maintenance of the local currency at values higher than those which the market would bear, cause considerable delays in conversion into world currencies.  Businesses continue to report a cumbersome bureaucratic process and a minimum three-month delay in such conversions.

The central bank intervenes to maintain an unofficial peg to the U.S. dollar, using a managed float in which the exchange rate fluctuates mildly day-to-day, and limits the availability of foreign currency.

Remittance Policies

While there are no recent changes or plans to change investment remittance policies to tighten or relax access to foreign exchange for investment remittances, commercial banks have enacted policies that limit access to foreign exchange due to national shortages, on guidance from the Ministry of Finance and the central bank.

Although there are no official time limitations on remittances, timeliness of remittances depends on availability of foreign currency.

Sovereign Wealth Funds

The value of TT’s Heritage and Stabilization Fund the fund as of April 2020 is approximately $5.9 billion, but a $1.1 billion withdrawal to support coronavirus-related economic measures is pending.  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.

None of the SWF is invested domestically.  There are no potentially negative ramifications for U.S. investors in the local market.

7. State-Owned Enterprises

TT has 55 state-owned enterprises (SOEs), comprised of 42 wholly owned companies, eight majority-owned, and four in which the government has a minority share.  SOEs are in the energy, manufacturing, agriculture, tourism, financial services, transportation, and communication sectors.  Information on the total assets of SOEs, total net income of SOEs and number of people employed by SOEs is not available.  The Investments Division of the Ministry of Finance appoints directors to the boards of state enterprises, reportedly at the direction of the minister of finance.  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:

  • 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 per cent of the ordinary share capital of the enterprise

A published list of SOEs for 2020 can be found here: https://www.finance.gov.tt/2019/10/07/state-enterprises-investment-programme-2020/ .

In sectors that are open to both the private sector and foreign competition, SOEs are sometimes favored for government contracts, which might negatively impact U.S. investors in the market.

The country has not adhered to the OECD corporate governance guidelines for SOEs.

Privatization Program

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

Foreign investors can participate in the initial public offerings of SOEs.

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

8. Responsible Business Conduct

There is general awareness of expectations of, and standards for, responsible business conduct (RBC), including obligations to proactively conduct due diligence to ensure businesses are doing no harm, including with regards to environmental, social, and governance 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.  The government has not conducted a national action plan on RBC, nor does it currently factor it into procurement decisions.

There have not been any high-profile, controversial instances of private sector impact on human rights.

TT has laws to ensure protection of labor rights, consumers, and the environment.  Enforcement, however, is lacking due to staffing shortages, capacity issues, and a bureaucratic judiciary.

Government, in collaboration with civil society, created the TT Corporate Governance Code, which incorporates governance, accounting, and executive compensation standards to protect shareholders.  The code, however, is not mandatory.

The Caribbean Corporate Governance Institute is a not-for-profit organization headquartered in Trinidad and Tobago that freely advocates for responsible business conduct and improved corporate governance practices in the Caribbean.

The government does not encourage adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas.  There are no domestic measures requiring supply chain due diligence for companies sourcing minerals originating from conflict-affected areas.

As a member of the EITI, the government publicly declares annually all revenues received from companies engaged in the extractive industries.  The companies, in turn, publicly declare payments to the government.

9. Corruption

Various pieces 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 in each ministry and statutory authority process 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.  Effectiveness of these measures has been limited by a lack of thorough enforcement.

The laws do not extend to family members of officials or to political parties.

TT does not have laws or regulations to counter conflicts of interest in awarding contracts or government procurement.

The government has been a party to the development of corporate governance standards (non-binding) to encourage private companies to establish internal codes of conduct that, among other things, prohibit 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 government requirement.

Trinidad and Tobago adheres to the UN Anticorruption Convention.

There are no protections for NGOs involved in investigating corruption, but investigations are not feared since corrupt actors are rarely punished.

U.S. firms often say corruption is an obstacle to FDI, particularly in government procurement, since TT’s procurement processes are not transparent.

Resources to Report Corruption

Name: Mr. Justice Melville Baird
Title: Chairman
Organization: The Integrity Commission
Address: P.O. Box 1253, Port of Spain
The Integrity Commission of Trinidad and Tobago Level 14,
Tower D, International Waterfront Centre, 1A Wrightson Road, Port of Spain
Telephone number: 868-623-8305
Email address: registrar@integritycommission.org.tt

Name: Mr. Dion Abdool
Title: Chairman
Organization: Trinidad and Tobago Transparency Institute (local chapter of Transparency International)
Address: Unit 4-12, Building 7, Fernandes Industrial Centre, Laventille
Telephone number: 868-626-5756
Email address: admin@transparency.org.tt

10. Political and Security Environment

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

Subsequent to the closure of state oil firm Petrotrin in November 2018, which resulted in the lay-off of nearly 6,000 workers, there were reports of damage to installations.

Certain areas of TT are increasingly insecure due to a critical level of violent crime.

11. Labor Policies and Practices

In 2019, the International Labor Organization estimated unemployment at 2.8 percent. That figure, however, is artificially low due to government make-work programs that absorb excess labor.  The labor market includes many 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.  In 2019, youth unemployment rate (15-24 years of age) was estimated at 6.41 percent.

Agricultural employment accounts for 3.6 percent of total employment while employment in services accounts for over 60 percent.  The estimated non-agricultural workforce in the informal economy is 10 percent of the overall labor force.  Trinidad and Tobago’s workforce includes not only TT nationals but also citizens of 11 other CARICOM countries as part of the free movement of labor without the need to obtain a work permit.  In 2019, Trinidad and Tobago granted 16,523 “Venezuelan migrants” the right to work in the country for a period of one year under a temporary protective status.  The Minister of National Security granted the Venezuelan migrants an automatic 6 months extension in 2020.

Trinidad and Tobago is a net importer of expatriate labor, including doctors, nurses, construction workers, and extractive industry specialists.  There are surpluses of accountants and attorneys and shortages of unskilled workers for the hospitality, retail, and agriculture sectors.  The government subsidizes tertiary-level education for citizens whose income falls within a minimum range.  The Multi-Sector Skills Training Program provides training in construction and hospitality and tourism for eligible citizens of Trinidad and Tobago.  The government also encourages continuing learning opportunities for the disadvantaged via the Skills Training Program, which develops skills that can aid in the creation of home-based production of goods and services and employment generation.

There is no government policy requiring hiring of nationals, though it is encouraged, particularly in the energy sector.

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 provides guidance on who is entitled to receive what based on specific circumstances.  Severance pay is usually only paid to retirees and workers who have been made redundant.  An employer is not required to pay severance to workers if everyone is severed, since the business is being closed.  If, however, only a portion of the workforce is rendered redundant, the employer must pay severance.  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.  Due to the COVID-19 pandemic, the government instituted a 3-6-month unemployment benefit program for those laid off.

Labor laws are not waived in order to attract or retain investment.  There are no separate labor law provisions for special economic zones, trade zones, or free ports.

Collective bargaining is common, with approximately 15 percent of the population covered by collective bargaining agreements.  Government workers, including civil servants, police officers, firefighters, 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.  Collective bargaining takes place between the firm and the 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.  There are close to 30 active, independent labor unions in TT.

The Industrial Relations Act (IRA) provides for dispute resolution through an industrial court in instances where the issue cannot be resolved by collective bargaining or through conciliation efforts by the Ministry of Labor.

There was no strike in the past year that posed an investment risk.

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, but the industrial court investigates and prosecutes unfair labor practices, such as harassment and/or improper dismissal of union members.

There were no new labor related laws or regulations enacted or in draft over the last year.

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs

As a high-income country, Trinidad and Tobago is ineligible for DFC programs.

OPIC has a bilateral agreement with Trinidad and Tobago.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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) 2018 $23,705 2018 $23,808 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) No data available 2018 $6,338 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data 
Host country’s FDI in the United States ($M USD, stock positions) No data available 2018 $163 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data 
Total inbound stock of FDI as % host GDP No data available 2018 38.8 UNCTAD data available at
https://unctad.org/en/Pages/DIAE/
World%20Investment%20Report/
Country-Fact-Sheets.aspx
 

* Source for Host Country Data: Ministry of Finance.

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

14. Contact for More Information

Name: Matt Ciesielski
Title:   Economic and Commercial Officer
Address of Mission: 15 Queen’s Park West, Port of Spain. Trinidad and Tobago
Telephone Number: +1 (868) 622-6371 ext. 5926
Email address: poscommercial@state.gov