The Government of Antigua and Barbuda encourages foreign direct investment, 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 foreign direct investment 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. ABIA offers complementary support services to investors exploring business opportunities, including facilitation of incentives and concessions, project monitoring, and general assistance. The government launched an additional website in early 2021 to serve as a “business hub for potential investors,” http://antiguabarbuda.com .

While the government welcomes all foreign direct investment, 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. Uncertainty about the trajectory of economic recovery of the tourism, commercial aviation, and cruise industries impacts the potential for projects in those sectors.

Local laws do not place any limits on foreign control of investment and ownership in Antigua and Barbuda. Foreign investors may hold up to 100 percent of an investment. Local and foreign entrepreneurs need approximately 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. In 2020, the government established the Nomad Digital Residence Visa program in which eligible remote workers can apply for a two-year special resident authorization. Under this program, the visa holders are also exempt from paying local income taxes. These programs are separate from the Citizenship by Investment program.

The ABIA evaluates all foreign direct investment proposals applying for government incentives 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.

The OECS, of which Antigua and Barbuda is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

Established in 2006, the ABIA facilitates foreign direct investment in 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. 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 https://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.

To register a business. 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 Commercial Office, the Inland Revenue Department, the Medical Benefits Scheme, the Social Security Scheme, and the Board of Education.

The Antigua and Barbuda Science Innovation Park (ABSIP) launched in 2019 to support and create business startup opportunities that will generate sustainable business enterprises. ABSIP provides business incubation and financing, access to business financing, branding, training, partnership establishment, and other services. ABSIP’s website is  http://absip.gov.ag  .

The Prime Minister’s Entrepreneurial Development Programme (EDP) supports the creation of micro and small businesses with the intent of increasing the Antiguan and Barbudan ownership share of the country’s economy. Priority sectors in which EDP grants loans are agriculture and agro-processing, manufacturing, information technology, e-business, and tourism.

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

Local laws do not place any restrictions 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).

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 the country. Where the government establishes policies that affect or pertain to investments or investors that are not expressed in laws and regulation or by other means, the national government has committed to make them publicly available.

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

Respective line ministries develop relevant national laws and regulations, which are then drafted by the Ministry of Legal Affairs. Laws relating to the ABIA and the Citizenship by Investment program are the main laws relevant to foreign direct investment. This website contains the full text of laws already in force, as well as those Parliament is currently considering.

While some draft bills are not subject to public consideration, input from stakeholder groups may be considered. The government encourages stakeholder organizations to support and contribute to the legal development process by participating in technical committees and providing comments 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 primary responsibility for investment supervision, and the Ministry of Finance, Corporate Governance and Public-Private Partnerships monitors investments to collect information for national statistics and reporting purposes. 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.

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. The eight member states and territories of the ECCU tend to enact laws uniformly, though minor differences in implementation may exist. The enforcement mechanisms of these regulations include penalties and other sanctions.

The February 2022 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 in Antigua and Barbuda registered under the Banking Act of 2015.

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.

As a member of the WTO, Antigua and Barbuda is a signatory to the WTO Agreement on the Technical Barriers to Trade and is obligated to notify the Committee of any draft new and updated technical regulations. 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 ratified the WTO Trade Facilitation Agreement (TFA) in 2017. 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 implemented a number of TFA requirements, but it has also missed two implementation deadlines.

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 matters and rules on constitutional law issues. 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 UK Privy Council.

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

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

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  .

The ABIA may grant concessions as specified in the Investment Authority Act Amended 2019. These concessions are listed on Antigua and Barbuda’s iGuide website. Investors must apply to ABIA to take advantage of these incentives.

Under the Citizenship by Investment 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 program is $100,000 (270,225 Eastern Caribbean dollars) to the National Development Fund for a family of up to four people and $125,000 (337,818 Eastern Caribbean dollars) for a family of five, with additional contributions of $15,000 (40,538 Eastern Caribbean dollars) 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 (1,081,020 Eastern Caribbean dollars) or more or making a business investment of $1.5 million (4,053,825 Eastern Caribbean dollars). 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 (13.5 million Eastern Caribbean dollars). Each investor must contribute at least $400,000 (1,081,020 Eastern Caribbean dollars) to the joint investment. Citizenship by investment investors must own real estate for a minimum of five years before selling it. A fourth option involves a contribution of $150,000 (405,383 Eastern Caribbean dollars) to the University of the West Indies (UWI) Fund for a family of six 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, and provide a full medical certificate, police certificate, and evidence of the source of funds.

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 has been submitted to the Ministry of Legal Affairs for review.

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 the 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 includes interest from the date of dispossession of the expropriated property until the date of payment and is required to be paid without delay.

There is an unresolved dispute regarding the 2007 expropriation of an American-owned property. Following the expropriation, the owners initiated legal action to enforce their rights under Antigua and Barbuda’s Land Acquisition Act. A 2014 Privy Council court decision ordered the Government of Antigua and Barbuda to pay the former property owners $39.8 million in compensation. The government has only paid approximately $20 million as of June 2021, and the property owners have continued to pursue multiple legal remedies to compel the government to pay the outstanding balance. Antigua and Barbuda appealed a 2018 court decision in favor of the claimants; legal proceedings are ongoing. The government has not made any additional payments to the claimants since 2015. The claimants continue to pursue recourse in other jurisdictions and in Antigua and Barbuda, with the latest legal filings in 2020. The outstanding debt is currently $19.1 million with daily accruing interest. Because of Antigua and Barbuda’s failure to fully compensate the owners as required by its own laws, the U.S. government recommends continued caution when investing in real estate or any other venture in Antigua and Barbuda.

Under the Bankruptcy Act (1975), Antigua and Barbuda has a bankruptcy framework that grants certain rights to debtors and creditors. The full text of the legislation can be found on the government’s website .

The Government of Antigua and Barbuda granted certain concessions specified in the Investment Authority Act Amended 2019. These concessions provide exemption or reduction on various taxes and fees, including corporate income tax, withholding tax, stamp duty on land transfers, and import duties on vehicles and construction materials. The length and/or scale of concession is based on company and investment size. These incentives cover capital investment in agriculture, fisheries, agribusiness, business process outsourcing, energy, health and wellness, manufacturing, creative, financial services, information and communications technology, and tourism sectors. Investors must apply to the ABIA to take advantage of these incentives. Investments in healthcare, tourism, infrastructure development, renewable energy, education, and other projects considered important for economic development may receive incentives and/or concessions determined by the ABIA and Cabinet of Antigua and Barbuda if they are over $55.6 million (150.26 million Eastern Caribbean dollars) in size.

The Government of Antigua and Barbuda has been proactively pursuing public-private partnerships 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.

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.

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).

The government owns 55 percent of Antigua’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.

Historically, the residents of Barbuda owned all land on Barbuda communally, however the recent appropriation of land for new development projects has resulted in legal challenges to this system. In the aftermath of 2017’s Hurricane Irma, the government attempted to introduce a private property system by amending and repealing the Barbuda Land Act and replacing it with the Crown Land Regulation Act, which would allow private ownership of land in Barbuda by non-Barbudans. Barbudan representatives have filed a legal challenge to the constitutionality of this legislation in the Eastern Caribbean Supreme Court. Therefore, the Crown Land Regulation Act has not yet taken effect.

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, which requires buyers 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 land 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.

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 Literacy and Artistic Works.

Article 66 of the Revised Treaty of Chaguaramas 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 2022 Special 301 Report or the 2021 Review of Notorious Markets for Counterfeiting and Piracy.

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/ .

As a member of the ECCU, Antigua and Barbuda is also a member of the Eastern Caribbean Stock Exchange (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 2021, there were 164 securities listed on the ECSE, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities. Market capitalization stood at $703 million (1.9 billion Eastern Caribbean dollars), representing a 6.9 percent increase from 2020. 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 services, and trade credits, as well as other accounts receivable that establish a claim for repayment.

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 Minsters 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 as stable. Assessments including effects of the pandemic are not yet available. Assets of commercial banks totaled $2.07 billion (5.6 billion Eastern Caribbean dollars) 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 is 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., Canadian, and European banks due to risk management concerns. 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.

Antigua and Barbuda’s Digital Assets Business Bill 2020 created a comprehensive regulatory framework for digital asset businesses, clients, and customers. The bill states that all digital asset businesses in the country must obtain a license for issuing, selling, or redeeming virtual coins, operating as a payment service or electronic exchange, providing custodial wallet services, among other activities. The government aspires to develop Antigua and Barbuda into a regional center for blockchain and cryptocurrency. At the end of 2020, over 40 major businesses accepted bitcoin cash.

Bitt, a Barbadian company, developed digital currency DCash in partnership with the ECCB. The first successful DCash retail central bank digital currency (CDBC) consumer-to-merchant transaction took place in Grenada in February 2021 following a multi-year development process. 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 2019. Bitt launched DCash in Antigua and Barbuda in March 2021. In January 2022, the platform experienced a system interruption, and its operation was suspended. The platform regained full functionality at the end of March 2022 following system upgrades.

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

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 little interest.

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

Antigua and Barbuda does not have a targeted privatization program.

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.

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.

Antigua and Barbuda is not a signatory of the Montreux Document on Private Military and Security Companies or a participant in the International Code of Conduct for Private Security Service Providers’ Association.

Antigua and Barbuda remains susceptible to natural disasters and other effects due to climate change. Antigua and Barbuda has developed a multi-stakeholder policy on the environment that focuses on climate resilience and adaptation, disaster risk reduction, protection of biodiversity, effective natural resources and environmental management through the enforcement of policies, legislation and regulations. The Environment Protection and Management Act was amended in 2019 to create an updated institutional and administrative framework that codifies all decisions on environmental and climate-related issues. Antigua and Barbuda is party to the Paris Agreement. In 2021, the government updated its Nationally Determined Contribution to the United Nations to signal its commitment to becoming a low- emission resilient country.

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 common. Both major political parties frequently accuse the other of corruption, but investigations yield few results. Antigua and Barbuda is party to the Inter-American Convention Against Corruption and the UN 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 combatting corruption, the commission was independent but understaffed and under-resourced. Critics stated the legislation was inadequately enforced and that the act should be strengthened.

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 offenses and the proceeds of crime.

The Freedom of Information Act granted citizens the statutory right to access official documents from public authorities and agencies and 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.

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 May 2023.

Updated figures for the employed labor force for 2021 remain unavailable.

According to available World Bank statistics, the adult literacy rate is 99 percent. The labor code dictates that 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 Legal Affairs, Public Safety, and Labour conducts periodic workplace inspections to enforce this law. The labor commissioner’s office also has an inspectorate that investigates child labor allegations.

The labor code dictates that 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 bargain collectively and conduct legal strikes, though there are several restrictions on the right to strike. Essential workers must provide two weeks’ notice of intent to strike. Once the party to a dispute requests court mediation, strikes are prohibited under penalty of imprisonment. Because of the delays associated with this process, unions often resolve labor disputes before calling a strike. The Industrial Relations Court may issue an injunction against a legal strike when the national interest is threatened or affected. The law prohibits retaliation against strikers. The law prohibits antiunion discrimination by employers, but it does not specifically require reinstatement of workers illegally fired for union activity.

The labor code provides that the Minister of Legal Affairs, Public Safety, and Labour may issue orders, which have the force of law, to establish a minimum wage. The minimum wage is $3.03 (8.18 Eastern Caribbean dollars) an hour for all categories of labor. In practice, the great majority of workers earn substantially more than minimum wage.

The customary standard workweek is 40 hours in five days. The law provides that the employer 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 Legal Affairs, Public Safety, and Labour 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 Labour Code provides general health and safety guidelines to labor inspectors. The Labour Commission settles disputes over labor abuses, health, and safety conditions. The law gives the ministry the authority to require special safety measures, not otherwise defined in the law, to be put in place for worker safety. Antigua and Barbuda is party to the International Labor Convention on Occupational Health and Safety No. 155 of 1981.

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.

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

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 

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. In 2021, the government announced plans to focus on encouraging foreign direct investment in renewable energy, manufacturing, technology, and biogenetic engineering.

According to Invest Barbados, Barbados encourages investment in the following key sectors: international financial services, information technology, and ship registration, as well as emerging sectors like financial technology, creative industries, agricultural processing, medical schools, medical tourism, and renewable energy. In the international financial services sector, the government maintains regulatory oversight via the Central Bank of Barbados 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 assist with the expansion and sustainability of the initial investment. It also serves as the primary liaison for existing investors. In 2021, the government announced plans to establish a Barbados Free Economic Zone to help attract foreign direct investment.

Investors interested in doing business in Barbados must register with the country’s Corporate Affairs and Intellectual Property Office (CAIPO). In 2021, the Government of Barbados fully digitized the registration process and all other services provided by CAIPO.

Local laws do not place any 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.

In 2012, the government introduced a special entry permit for high net-worth individuals who wish to reside in Barbados while working remotely. Individuals must have one of the following to apply: a net worth of USD five million, property valued above USD two million, and skills of critical need to the development of the country. Applicants must generally be 60 years or older although special provisions can be made for applicants under 60 years of age. The program is administered by the Barbados Immigration Department.

In 2020, the government introduced the Barbados Welcome Stamp visa program, which allows eligible remote workers to apply for special residency status for up to one year. Under this program, the visa holder is exempt from local income taxes. The visa holder can also apply for an extension of the visa with the repayment of applicable fees. The program is administered through the Ministry of Tourism and International Transport.

Barbados has not conducted a trade policy review in the last three years. No civil society organization has provided a review of investment policy-related concerns in the past five years.

Invest Barbados is the main investment promotion agency that attracts and facilitates foreign investment. Invest Barbados offers guidance and direction to new and established investors seeking to pursue investment opportunities in Barbados. The process is transparent and considers 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 . Invest Barbados’ iGuide website is an online guide that provides local and foreign investors with up-to-date information required to make certain investment decisions, including steps for 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, who are usually attorneys. Information is available at  www.caipo.gov.bb .

In general, when starting a business, companies retain an attorney to prepare relevant incorporation documents. The business must register with CAIPO, the Barbados Revenue Authority, the Customs and Excise Department, and any relevant sector-specific licensing agencies.

The Government of Barbados continues to facilitate programs and partnerships to assist entrepreneurs who are women and/or 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.

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

Barbados’ legal framework establishes clear rules for foreign and domestic investors regarding tax, labor, environmental, health, and safety concerns. These regulations are in accord with international standards. The Ministry of Finance, Economic Affairs, and Investment 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 President. Responsibility for Senate appointments shifted in 2021 when Barbados removed the UK’s Queen Elizabeth as head of state and became a republic.

Foreign investment into Barbados is governed by a series of laws and 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 – Central Bank of Barbados (CBB)
• Insurance and non-banking financial services – Financial Services Commission (FSC)
• International business – International Business Unit, Ministry of International Business and Industry
• Business incorporation and intellectual property – CAIPO

The Ministry of Finance, Economic Affairs and Investment 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 agencies depending on the nature of the business.

Although Barbados does not have formal legislation that guarantees access to information or freedom of expression, access to information is generally available. 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 also maintains a parliamentary website at http://www.barbadosparliament.com  where it posts legislation prior to parliamentary debate and live streams House sittings. The government budget is also available on this website.

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 public. Copies of regulations are circulated to stakeholders and are published in the Official Gazette after passage in parliament. The Official Gazette is available at  https://gisbarbados.gov.bb/the-official-gazette .

Accounting, legal, and regulatory procedures are transparent. Publicly listed companies publish annual financial statements and changes in portfolio shareholdings, including share value. 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 Barbados financial service providers. Failure to adhere to these laws and regulations may result in the revocation of

a company’s 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 government does not promote or require companies’ environmental, social, and governance disclosures.

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 Barbados Parliament website.

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 Sharing.

The Barbados National Standards Institution (BNSI) oversees a laboratory complex housing metrology, textile, engineering, and chemistry/microbiology laboratories. The primary functions of the BSNI 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. As a signatory to the World Trade Organization (WTO) Agreement to Technical Barriers to Trade, Barbados is obligated to harmonize all national standards through the BNSI to international norms to avoid creating technical barriers to trade.

Barbados ratified the WTO Trade Facilitation Agreement in 2018. 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. The government also increased issuance fees for certificates of origin, making trade more expensive.

Barbados’ legal system is based on the British common law. Modern corporate law is modeled on the Canadian 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. The High Court hears criminal and civil (commercial) matters and makes determinations based on 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 Chaguaramas (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.

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, shipping 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 for 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 .

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 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 sector.

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.

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.

In 2019, Barbados repealed its Fiscal Incentives Act, bringing the country into conformity with its obligations under the WTO and the Agreement on Subsidies and Countervailing Measures. Manufacturers may still benefit from some concessions. Further information is available from 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 expenditures 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 the 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.

Barbados has harmonized the legislative and tax frameworks for domestic and international companies in the international business sector. Companies conducting international business operate with a tax rate from 1 to 5.5 percent. Companies exporting 100 percent of their services or products can apply for a foreign currency permit. All corporate entities are taxed on a sliding scale:

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

The Government of Barbados offers various incentives to business owners engaged in the renewable energy and energy efficiency sectors. A pamphlet outlining these incentives is available  on the Invest Barbados website.

There are currently no foreign trade zones or free ports in Barbados. In 2021, the government announced plans to establish a Barbados Free Economic Zone to help attract foreign direct investment.

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 Barbados, 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.

Except in the case of its medicinal cannabis and renewable energy industries, Barbados does not require that its citizens own shares of a foreign investor’s enterprise. 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. Investors, particularly within the hospitality industry, are encouraged to use local products whenever possible.

Barbados labor and immigration laws stipulate that non-nationals seeking to work in Barbados must apply for work permits, including for all managerial and technical staff. Nationals from CARICOM member states are exempt from this requirement. 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  http://www.immigration.gov.bb/pages/WorkPermit.aspx .

There are no requirements for foreign information technology providers to turn over source codes and/or provide access to surveillance.

The Barbados Data Protection Act (BDPA) became law in 2021. The BDPA created a data protection authority under a Data Protection Commissioner responsible for the general administration of the act. The BDPA prohibits the transfer of personal data out of Barbados unless the destination country or territory ensures an adequate level of protection for the rights and freedoms of data subjects vis-à-vis the processing of their personal data. Violations under the BDPA are subject to fines ranging from $5,000 to $250,000 (10,000 to 500,000 Barbados dollars) and allow for criminal convictions resulting in prison sentences ranging from two months to three years.

As a member of the WTO, Barbados is party to the Agreement to the Trade Related Investment Measures.

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 one percent stamp duty. Brokerage and legal fees are not included in these levies. Buyers should seek the advice of a local attorney when purchasing property.

Commercial, industrial, hotel, and villa properties are subject to a 0.95 percent land tax on the improved value of the property. Holders of a certificate from the Barbados Tourism Authority enjoy rebates of 50 percent for hotels and 25 percent from 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 $75,000 (150,000 Barbados dollars)
• 0% on the first $75,000 (150,000 Barbados dollars)
• 0.1% on amounts between $75,001 and $225,000 (150,001 and 550,000 Barbados dollars)
• 0.7% on amounts between $225,001 and $425,000 (550,001 and 850,000 Barbados dollars)
• 1.0% on amounts greater than $425,000 (850,000 Barbados dollars)
• 0.8% on vacant land under 4,000 square feet
• 1.0% on all other vacant land

The government has included an additional procedure that has increased the time to record the conveyance at the Land Registry and pay transfer fees and stamp duties. This has made transferring property more onerous. The Land Registry has digitized records dating back to 1952 and plans to further digitize deeds dating back to 1640. A landowner may lose his or her title to land if a trespasser or squatter takes possession for a period of ten years.

Barbados has a legislative framework governing intellectual property rights (IPR), though enforcement needs improvement. Barbados is a member of the World Intellectual Property Organization (WIPO) and is party to the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, and the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. The Government of Barbados has enacted IPR legislation on topics including patents, copyrights, trademarks, industrial designs, integrated circuits topography, plant breeders’ rights, geographical indications, and protection against unfair competition. Barbados’ Trademark and Industrial Designs Act meets international standards.

Barbados remains on the Office of the United States Trade Representative (USTR) Special 301 Report Watch List in 2021. Barbados acceded to the WIPO Internet Treaties in 2019 and has convened a public-private Advisory Committee on Intellectual Property Rights to redraft its Copyright Act. Once passed by Parliament, this will enable Barbados to implement its WIPO Internet Treaties obligations. CAIPO will be reorganized into two separate entities, one for business registration and one for IPR registration. The former CAIPO director was appointed as Master of the High Court in 2020, which deepened the court’s IPR expertise. These measures, along with the updates and upgrades to CAIPO’s database in 2021, were intended to strengthen IPR enforcement.

Currently, Barbados’ judicial system is unable to provide timely and effective relief on IPR violations due to a serious case backlog across all types of civil and criminal matters. Ongoing cases include the unauthorized transmission of U.S. broadcasts and cable programming by local cable operators, including state-owned broadcasters, without adequate compensation to U.S. right holders, and the refusal of Barbadian television and radio broadcasters and cable and satellite operators to pay for public performances of music.

Article 66 of the Revised Treaty of Chaguaramas 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 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.”

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’ Custom and Excises Department to have the goods destroyed. If the goods fall under the 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 listed in USTR’s 2022 Review of Notorious Markets for Counterfeiting and Piracy.

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 .

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. The CBB independently raises or lowers 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 of at least $500,000 (1 million Barbados dollars) 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 $100,000 (200,000 Barbados dollars). 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 has computerized clearance and settlement of share certificates through the Barbados Central Securities Depository Inc., a wholly owned subsidiary of the BSE. Under the Property Transfer Tax Act, the FSC can accommodate investors requiring a traditional certificate for a small fee. The FSC 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 $5,000 (10,000 Barbados dollars) 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. To date, the ISM has four 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 UK 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.

The government established the CBB 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, developed digital currency DCash in partnership with the Eastern Caribbean Central Bank. The first successful DCash retail central bank digital currency consumer-to-merchant transaction took place in Grenada in 2021 following a multi-year development process. The CBB and the FSC established a regulatory sandbox in 2018 where financial technology entities could 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 2019. According to Bitt, it has no immediate plans to launch DCash in Barbados and focused first on Barbados’ Eastern Caribbean neighbors. Bitt also offers a digital access exchange, remittance channel, and merchant-processing gateway available via mMoney, a mobile application. In early 2022, the DCash platform crashed for almost two months, raising questions about the initiative’s long-term prospects.

The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S., Canadian, and European banks in recent years due to concerns that the region is high-risk.

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 Barbados. 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 governmental assets, including on- and offshore real property, revenues from oil and gas products, and non-tangible assets such as trademarks, patents, and intellectual property.

State-owned enterprises (SOEs) in Barbados work in partnership with ministries, or under their remit, and carry out certain ministerial responsibilities. There are 33 SOEs in Barbados operating in areas such as travel and tourism, investment services, broadcasting and media, sanitation services, sports, and culture. Pre-pandemic total net income was estimated at $60 million (120 million Barbados dollars).

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 IMF BERT program, the Government of Barbados is addressing the expenditure position of the SOEs by defining clear objectives for SOE reforms, reducing the wage bill of these entities, and implementing other necessary reform measures.

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

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 periodically partners with NGOs and encourages philanthropy.

Barbados was on the Tier 2 Watch List for trafficking in persons for from 2019-2021, however, there are no known human or labor rights concerns relating to responsible business conduct of

which foreign businesses should be aware.

Adoption of broad corporate governance codes such as the OECD guidelines is voluntary, as is disclosure of corporate governance practices. In practice, many companies in Barbados are influenced by international best practices. CBB and FSC guidelines regulate the purpose and role of the board of directors. The accounting profession is regulated by the Institute of Chartered Accountants of Barbados, which is a member of the International Federation of Accountants.

Barbados is not a signatory of the Montreux Document on Private Military and Security Companies or a participant in the International Code of Conduct for Private Security Service Providers’ Association.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Barbados published a national climate change strategy in 2012. Since then, the government has submitted both an initial and updated Nationally Determined Contribution (NDC). It does not have a specific strategy for monitoring natural capital, including biodiversity and ecosystem services. The government hopes to achieve a fossil fuel-free economy by 2030. The government has also indicated that substantial support from the international community will be necessary to achieve this goal. Public procurement policies do not include environmental and green growth considerations. The Government of Barbados offers various incentives to business owners engaged in the renewable energy and energy efficiency sectors. A pamphlet outlining these incentives is available  on the Invest Barbados website.

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. It has not been proclaimed by the President and consequently is not in force. The Integrity of Public Life Bill 2020, which mandated declaration of assets by all politicians, senior public officers, chair people, and high-ranking managers of SOEs, passed in Barbados’ Parliament but was ultimately defeated in the Senate. Prime Minister Mia Mottley’s administration plans to bring the bill back to Parliament in 2022 but has acknowledged the need to reach agreement with opposing forces in the Senate.

The Government of Barbados has announced its intention to establish a public investment dashboard to provide information relevant to public sector investment projects, including cost overruns, procurement procedures, and company selection. The government also plans to establish an independent statistics and data analytics authority and to introduce a Freedom of Information Act.

A government minister with the previous administration was arrested in the United States on charges of laundering proceeds from bribes paid in Barbados. In 2020, he was found guilty on two charges of money laundering and one count of conspiracy to commit money laundering.

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

The Director
Financial Intelligence Unit
P.O. Box 1327, Bridgetown
246-436-4734
director@barbadosfiu.gov.bb  

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

Barbados’ labor force was 141,940 people at the end of 2020. In the first quarter of 2021, the total average unemployment rate was approximately 40 percent, an increase of 30 percent from the same period the previous year due to ongoing economic distress caused by the COVID-19 pandemic. The economy began to recover in 2021 with 1.4 percent growth, and the IMF forecasts 2022 growth at 8.5 percent, a faster rate of recovery than previously 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 Labour’s Labour Department. The minimum wage for shop assistants is currently $4.25 (8.50 Barbados dollars) per hour. The Ministry of Labour recommends 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’ service and four weeks of paid holiday leave after five years’ service. The law requires overtime payment of time and a half for hours worked in excess of the legal standard and prescribes that 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 sets occupational safety and health standards.

Workers are legally allowed to form and join unions and conduct strikes, but there is no specific legal recognition of the right to collective bargaining. Most major employers choose to recognize unions when more than 50 percent of employees request recognition. Smaller companies are less frequently unionized. Companies are sometimes hesitant to engage in collective bargaining with recognized unions, but in most instances they eventually do so. The law prohibits antiunion discrimination and protects workers engaged in union activity. Private-sector employees can strike, but strikes are prohibited by workers in essential services such as police, firefighting, electricity, and water.

In general, the government effectively enforces labor laws, and penalties are sufficient to deter violations. The law gives employees the right to have allegations of unfair dismissal tried before the Employment Rights Tribunal, but the process often has lengthy delays. Workers’ rights are generally respected. Unions receive periodic complaints of violations of collective bargaining agreements, but most complaints are resolved through established mechanisms.

The law provides for a minimum working age of 16. Compulsory primary and secondary education policies reinforce 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. The Employee 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 Labour 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 Labour Department’s Inspection 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.

According to government figures, the growing informal economy represents between 30 and 40 percent of GDP. The government has stated that by avoiding taxes and regulations, informal firms have an unfair advantage over more efficient formal firms, undermining economic growth and progress. In general, most sectors of the Barbados informal economy do not overlap with potential investment sectors for U.S. and other foreign businesses.

* Source for Host Country Data: Central Bank of Barbados (CBB)  http://www.centralbank.org.bb  

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

Table 4: Sources of Portfolio Investment
Data not available.

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  

Belize’s government encourages FDI to relieve fiscal pressure and transform the economy.  In November 2021, the Government of Belize hosted its first national Investment Summit under the theme “Belize: Open for Business.” The Government of Belize also conducted trade missions to the United States to promote itself as an investment destination and credible export market. In April 2022, senior Belizean government representatives hosted a diaspora tour in the United States to encourage Belizean-Americans to invest in Belize. The estimated Belize diaspora is 300,000 persons. While the government is interested in attracting FDI, certain bureaucratic and regulatory requirements impede investment and growth.

Public debt declined from 133 percent of GDP in 2020 to 108 percent in 2021. This was in large part due to the Blue Bond Agreement, a successful marine protection and conservation-driven financial transaction. Under this deal, The Nature Conservancy (TNC) lent funds to Belize to buy back its Superbond (totaling US $553 million or 30 percent of GDP) at a discounted price of 55 cents per dollar. In exchange, Belize committed to increase expenditure on marine conservation until 2041 and to expand its Biodiversity Protection Zones to 30 percent by 2026.

There are no laws that explicitly discriminate against foreign investors.  In practice, however, investors complain that lack of transparency, land insecurity, bureaucracy, delays, and corruption are factors that make it difficult to do business in Belize. U.S. firms have identified challenges in participating and competing in areas related to the bidding, procurement, and dispute settlement processes, in particular relating to State Owned Enterprises (SOEs).

The Belize Trade and Investment Development Service (BELTRAIDE; www.belizeinvest.org.bz ) is the investment and export promotion agency.  It promotes FDI through various incentive packages and identified priority sectors.  Export-orientated businesses operating in less developed areas also receive preferential treatment. The Economic Development Council, https://edc.gov.bz , is a public-private sector advisory body established to advance public sector reforms, to promote private sector development and to inform policies for growth and development.

Belize acknowledges the right for foreign and domestic private entities to establish and own business enterprises and engage in remunerative activities.  Foreign and domestic entities must first register their business before engaging in business. They must also register for the appropriate taxes, including business tax and general sales tax, as well as obtain a social security number and trade license.

Generally, Belize has no restrictions on foreign ownership and control of companies; however, foreign investments must be registered with the Central Bank of Belize and adhere to the Exchange Control Act and related regulations.  To register a business name, foreigners must apply with a Belizean partner or someone with a permanent residence. Requirements differ based on the applicant’s residency status and whether the individual is seeking to establish a local or foreign currency account.

Foreign investments must be registered and obtain an “Approved Status” from the Central Bank to facilitate inflows and outflows of foreign currency and repatriate funds gained from profits, dividends, loan payments, and interest.  The Exchange Control Regulation Act was amended in 2020 to relax the requirement for non-residents to obtain prior permission from the Central Bank to conduct transaction in securities and real estate. The amendment now requires for prior written notice to the Central Bank with full particulars of the transaction.

Some investment incentives show preference to Belizean-owned companies.  For example, to qualify for a tour operator license, a business must be majority-owned by Belizeans or permanent residents of Belize ( http://www.belizetourismboard.org ).  This qualification is negotiable, particularly where a tour operation would expand into a new sector of the market and does not result in competition with local operators.  The government does not impose any intellectual property transfer requirements.

Foreign investors seeking to avail themselves of various incentives programs are required to adhere to screening guidelines outlined in the specific program. These may include updating their shareholders registry, obtaining requisite Central Bank of Belize approvals, and fulfilling performance requirements. Foreign investors undertaking large capital investments are also advised to adhere to environmental laws and regulations.  The government requires developers to prepare an Environmental Impact Assessment (EIA) for certain projects. When purchasing land or planning to develop in or near an ecologically sensitive zone, the government recommends the EIA fully address any measures by the investor to mitigate environmental risks.  The Department of Environment website, http://www.doe.gov.bz  has more information on the Environmental Protection Act and other regulations, applications, and guidelines.

In the past three years, there has been no investment policy review of Belize by the Organization for Economic Cooperation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD).  Belize concluded its third Trade Policy Review in the World Trade Organization (WTO) in 2017.

In the past five years, civil society organizations concerned with investment policy lobbied directly with government. As an example, the Belize Chamber of Commerce and Industry, the Belize Network of NGOs, and the opposition were represented on the National Oversight Committee during the height of the COVID- 19 pandemic.

BELTRAIDE ( http://www.belizeinvest.org.bz  ), a statutory body of the Government of Belize, operates as the country’s investment and export promotion agency.  Its investment facilitation services are open to all investors, foreign and domestic.  While there are support measures to advance greater inclusion of women and minorities in entrepreneurial initiatives and training, the business facilitation measures do not generally distinguish by gender or economic status.

The GoB made progress on the ease of doing business through trade license, stamp duty, exchange control, and land reforms to streamline business applications and related processes. Myriad government services are going digital. Business and personal income tax offices amalgamated into the Belize Tax Service which launched an online tax payment system. Belize’s Financial Inclusion Strategy also expands access of financial services to underserved populations. Businesses must register with the tax department and local government to pay business and general sales tax and obtain a trade license.  An employer should also register employees for social security. Permission from the Central Bank is required for all overseas investments between residents and non-residents

The Belize Companies and Corporate Affairs Registry (tel: +501 822 0421; email: info@belizecompaniesregistry.gov.bz ; website: https://belizecompaniesregistry.gov.bz ) is responsible for the registration process of all local businesses and companies.

Belize does not promote or incentivize outward investments.  The government does not restrict domestic investors from investing abroad.  However, the Central Bank places currency controls on investment abroad, with Central Bank approval required prior to foreign currency outflows.

There are no reports of government policies, processes, or laws significantly distort or discriminate against foreign investors.  Nonetheless, some investors have complained of systematic shortfalls such as unreliable land titles and bureaucratic delays or corruption, which hinder doing business in Belize. U.S. firms have also identified challenges in participating and competing in areas related to the bidding, procurement, and dispute settlement processes, particular to State Owned Enterprises (SOEs). There are no nongovernmental organizations (NGOs) or private sector associations that manage regulatory processes.  NGOs and private sector associations do lobby on behalf of their members but have no statutory authority.

Regulatory authority exists both at the local and national levels with national laws and regulations being most relevant to foreign businesses.  The cabinet dictates government policies that are enacted by the legislature and implemented by the various government authorities.  Some quasi-governmental organizations are also mandated by law to manage specific regulatory processes, e.g., the Belize Tourism Board, BELTRAIDE, and the Belize Agricultural Health Authority.  Regulations exist at the local level, primarily relating to property taxes and registering for trade licenses to operate businesses in the municipality.

Some supra-national organizations and regulatory structures exist.  For example, some elements of international trade affecting U.S. businesses are affected by CARICOM treaties, as in the case of the export of sugar within CARICOM.

Accounting, legal, and regulatory systems are consistent with international norms.  Publicly owned companies generally receive audits annually, and the reports are in accordance with International Financial Reporting Standards and International Standards on Auditing.

The government does not promote or require companies’ environmental, social and governance disclosure to facilitate transparency or help investors and consumers distinguish between high- and low-quality investments.

Draft bills or regulations are generally made available for public comment through a public consultation process.  Once introduced in the House of Representatives, draft bills are sent to the relevant standing committee, which then meet and invite the public and interested persons to review, recommend changes, or object to draft laws prior to further debate.  The mechanism for drafting bills, and enacting regulations and legislation generally applies across the board and includes investment laws and regulations.  Public comments on draft legislation are not generally posted online nor made publicly available.  In a few instances, laws are passed quickly without meaningful publication, public review, or public debate. The government does not generally disclose the basis on which it reviews regulations.  Some government agencies make scientific studies publicly available.

Printed copies of the Belize Government Gazette contain proposed as well as enacted laws and regulations and are publicly available for a subscription fee.  Additionally, enacted laws are published free of cost on the website of the National Assembly or Parliament, but there is a delay in updating the website.

Regulations and enforcement actions are appealable with regulatory decisions subject to judicial review.  The Office of the Ombudsman also may investigate allegations of official wrongdoing but has no legal authority to bring judicial charges.  Reports of wrongdoing are submitted to the affected ministry. Additionally, the Annual Report of the Ombudsman is presented to the National Assembly and is a publicly available document.

The offices for business and personal income tax amalgamated into the Belize Tax Service, which launched an online tax payment system in August 2021. The Companies Registries, along with the court system, are being digitized to facilitate e-filing of documents and online payment of fees. In March 2022, the government lowered business tax on the net interest income charged to banks and financial institutions with a view to incentivizing lending in strategic foreign exchange earning sectors and at the same time increased the tax on specific sectors to disincentivize personal and distribution loans. The amendments to the tax system will improve tax collection and a stem leakage. Other anticipated reforms are expected to improve the ease of doing business, provide greater transparency and stimulate economic growth with lending to foreign exchange earning sectors.

Information on public finance, both the government’s budget and its debt obligations (including explicit and contingent liabilities) are widely accessible to the public, with most documents available online.  The budget documents do not include information on contingent or state-owned enterprise (SOE) debt unless the GoB guarantees or is paying these debts. Nonetheless, the audited annual reports of all major SOEs were publicly available on their websites.  The Auditor General’s report on government spending, however, is often significantly delayed.

As a full member of the Caribbean Community (CARICOM), Belize’s foreign, economic and trade policies vis-a-vis non-member states are coordinated regionally.  The country’s import tariffs are largely defined by CARICOM’s Common External Tariff.

Besides CARICOM, Belize is a member of the Central American Integration System (SICA) at a political level, but is not a part of the Secretariat of Central American Economic Integration (SIECA) that supports economic integration with Central America.  Belize is also a member of the WTO and adheres to the Organization’s agreements and reporting system.

The Belize Bureau of Standards (BBS) is the national standards body responsible for preparing, promoting, and implementing standards for goods, services, and processes.  The BBS operates in accordance with the WTO Agreement on Technical Barriers to Trade and the CARICOM Regional Organization for Standards and Quality.  The BBS is also a member of the International Electrotechnical Commission (IEC), the International Organization for Standardization (ISO), and Codex Alimentarius.

As a former British colony, Belize follows the English Common Law legal system. The Belize Constitution is the supreme law and founded on the principle of a separation of powers with independence of the judiciary from the executive and legislative branches of government. Belize has a written Contract Act, but no specialized courts to deal with commercial disputes or cases.

The judicial system remains generally independent of the executive branch.  Case law exists where the judiciary has ruled against the government, and its judgements are respected and authoritative.  The highest appellate court exists outside of Belize at the Caribbean Court of Justice, providing a level of independence for the judiciary.  The judiciary remains underfunded and understaffed resulting in frequent adjournments, delays, poor case-flow management and a backlog of cases.  General information relating to Belize’s judicial and legal system, including links to Belize’s Constitution, Laws and judicial decisions are available at the Judiciary of Belize website www.belizejudiciary.org .

Businesses and citizens may appeal regulations and enforcement actions.  Regulatory decisions are also subject to judicial review.  Judgments by the Belize Supreme Court and the Court of Appeal are available at http://www.belizejudiciary.org .

The Caribbean Court of Justice has two jurisdictions, appellate and original, in relation to CARICOM Members States. In its appellate jurisdiction, the CCJ is the final court of appeal for both civil and criminal matters emanating from CARICOM Member States. In its original jurisdiction, this Court is responsible for interpreting and applying the Revised Treaty of Chaguaramas, the treaty establishing the Caribbean Community and CARICOM Single Market and Economy.

The country has an English Common Law legal system supplemented by local legislation and regulations.  The legal system does not generally discriminate against foreign investment and there are no restrictions to foreign ownership.  The Exchange Control Act and its subsidiary laws and regulations, however, provide the legal framework that applies to foreign ownership and control. Other laws stipulate that foreign investment can qualify for incentives; citizens have the right to private property; contracts are legally binding and enforceable, and regulations are subject to judicial review among other provisions favorable to foreign investment.

Major laws enacted or amended are generally available in the National Assembly’s website at www.nationalassembly.gov.bz .  For the previous year, these include the Blue Bond Loan Act, 2021; Companies (Amendment) Act, 2021; Data Protection Act, 2021; Electronic Evidence Bill, 2021; Electronic Transactions Act, 2021; Electronic Transfer of Funds Crime Act, 2021; Immigration (Amendment) Act,, 2021; Patents (Amendment) Act, 2021; Public Sector Data Sharing Act, 2021; Securities Industry Act, 2021; Stamp Duties (Amendment) Act, 2021; Sugar Industry (Amendment) Act, 2021; Trademarks (Amendment) Act, 2021; Tax Administration and Procedures (Amendment) Act, 2021; Central Bank of Belize (Amendment) Act, 2022; and Income and Business Tax (Amendment) Act, 2022.

There is no “one-stop-shop” website for investment, and the laws, rules, procedures, and reporting requirements related to investors differ depending on the nature of the investment.  BELTRAIDE provides advisory services for foreign investors relating to procedures for doing business in Belize and what incentives might be available to qualifying investors.  Further information is available at the BELTRAIDE website:  http://www.belizeinvest.org.bz 

Belize does not have any laws governing competition, but there are attempts to limit outside competition in certain industries (such as food and agriculture) by levying high import duties and import licensing requirements.

The government used the right of eminent domain in several cases to expropriate private property, including land belonging to foreign investors.  There were no new expropriation cases in 2021. However, claimants in previous cases of expropriation assert the GoB failed to honor agreements entered into by a previous administration.  Belizean law requires that the government assess and compensate according to fair market value.  Expropriation cases can take several years to settle and there are a few cases where compensation is still pending.  Belize nationalized two companies in public-private partnership: Belize Electricity Limited and Belize Telemedia Limited.  These actions were challenged in the courts and resolved in 2015 and 2017, respectively.

The Caribbean Court of Justice delivered a judgment relating to the Belmopan Land Development Corporation Limited (BLDCL) in January 2022, wherein it upheld the decision of the trial judge in favor of BLDCL. The case pertained to compensation owed by the government for 1,394 acres of land expropriated in 2013. After negotiations for market value failed, the matter was taken before local courts. The CCJ upheld the trial judge’s quantum of damages to BLDCL for just over US $8 million.

The Bankruptcy Act of Belize provides for bankruptcy filings.  The Act provides for the establishment of receivership, trustees, adjudication, and seizures of the property of the bankrupt.  The court may order the arrest of the debtor as well as the seizure of assets and documents in the event the debtor may flee or avoid payment to creditors.  The Director of Public Prosecutions may institute proceedings for offenses related to the bankruptcy proceedings.   The bankruptcy law generally outlines actions a creditor may take to recoup losses.  Bankruptcy protections are not as comprehensive as U.S. bankruptcy law.

The legal framework authorizing and providing for investment incentives include the Fiscal Incentives Act, the Designated Processing Areas Act, the Free Zones Act, the International Business Companies Act, the Retired Persons Incentives Act, the Diaspora Retiree Incentive Program, the Trusts Act, the Offshore Banking Act, and the Gaming Control Act.  These acts offer a range of incentives including tax deferments, tax reductions, access to land and capital, and preferential access to some government concessions.

While government policies support public private partnerships, they do not generally issue guarantees or joint financing of foreign direct investment projects.  In exceptional circumstances, guarantees have been issued for SOE investments to purse funding from development institutions. In October 2021, the GoB approved a draft public private partnership policy (PPP) and the creation of the PPP unit to mobilize private sector capital to support large-scale investments in infrastructure and other development projects.

In March 2022, the government amended the Income and Business Tax Act to decrease the incentive lending rate from 15 percent to 12 percent in strategic foreign exchange earning sectors including tourism, agriculture, and business processing outsourcing. The Central Bank of Belize and the Government of Belize also established the Emergency Business Support Program (EBSP) in the last year to provide financing through domestic banks and the Development Finance Corporation to businesses affected by the COVID –19 pandemic.

The Designated Processing Areas Act (DPA) was passed in 2018 to replace the former Export Processing Zone Act.  The DPA remains a tool to attract local and foreign investments that follow value-added business models to boost production for export markets.  Approved companies under this program receive a DPA status for a period of up to ten years and may qualify for various tax exemptions.  Approved companies are given certain exemptions, including from the Trade Licensing Act requirements for operating in a municipality and the Supplies Control Act, in relation to the importation of raw materials for production that are not available in Belize.  Companies may maintain a foreign currency account in a domestic or international bank located in Belize as well as sell, lease, or transfer goods and services between DPA companies.  While subject to the Income and Business Tax, businesses may qualify for a preferential tax rate on chargeable income.  They may also be eligible for an annual quota for fuel solely for specified uses.

A Free Zone Act passed in 2019 amended the Commercial Free Zone (CFZ) Act.  Belize currently has two CFZs, one on the northern border with Mexico and a small zone on the western border with Guatemala.  The legislation limited the activities allowed in CFZ to specific sectors. Banks and financial institutions licensed under the laws of Belize are allowed to operate within a CFZ, but their transactions are limited to only CFZ-centered business.

Companies may operate both in the national customs territory and in the Free Zone, but must maintain separate accounts in respect of business activities.  Additionally, goods entering the customs territory are subject to customs duties.  The Commercial Free Zone Management Agency (CFZMA) monitors and administers the free zones.  Incentives include exemptions from import duties, income tax, taxes on dividends, capital gains tax, or any new corporate tax levied by the government during the first ten years of operation.  In addition, imports and exports of a CFZ are exempt from customs duties, consumption taxes, excise taxes, or in-transit taxes, except those destined for or directly entering areas subject to the national customs territory.

Domestic and foreign investors seeking to access incentives offered under the various incentive programs must comply with the program conditions including performance requirements. Investments that have been approved for incentives generally report to the authorizing agency, namely BELTRAIDE or the Ministry of Finance, Economic Development and Investment, to ensure they meet stipulations on the concession.

The Fiscal Incentives Act awards a qualified entity a development concession during the start-up or expansion stages to foster growth by offsetting custom duties.  According to BELTRAIDE (www.belizeinvest.org.bz), two programs are offered under this Act: the Regular Program for investments exceeding US $150,000 and the Small and Medium Enterprise (SME) program for investments of less than US $150,000.

In general, investment incentives are applicable to both domestic and foreign investors.  The Fiscal Incentives SME Program, however, is aimed at smaller enterprises with a minimum of 51 percent Belizean ownership.  The SME Program offers the same benefits of the Regular Program, except for the allowable timeframe for duty exemptions.  Under this program, companies are allowed a maximum of five years of development concessions, with the expectation that after this period, companies can mature into the Regular Program.

The Qualified Retirement Program (QRP) was created to facilitate eligible persons who have met the income requirements to permanently live and retire in Belize.  The Belize Tourism Board oversees this program designed to benefit retired persons over 45 years of age.  To qualify, applicants need proof of income not less than US $2,000 per month through a pension or annuity generated outside of Belize.  An approved QRP is allowed to import personal effects as well as approved means of transportation, free of customs duties and taxes.  Under the program, beneficiaries cannot engage in employment, own a business or invest in Belize. 

In November 2021, Belize passed the Data Protection Act, which is partially aligned with Europe’s General Data Protection Regulation (GDPR). The Act mandates the sharing of data between governmental agencies and categorizes financial records as sensitive personal data. It also lays out fines are as high as US $250,000. The Act creates a carve-out for international transfers of data to cloud storage outside Belize whereby no consent is required from data subjects. Additionally, the Act gives a three-day window as the default for notifying the Commissioner and data subjects of breaches.

The preamble of the Belize Constitution preserves the right of the individual to own private property to operate private businesses.  Common law, Belize legislation, and case law all reinforce property rights and interests.  Private entities, whether foreign or local, have the right to freely establish, acquire, and dispose of interests in property and business enterprises.  Generally, the country has no restrictions on foreign ownership and control; however, foreign investments in Belize must be registered at the Central Bank of Belize and adhere to the Exchange Control Act and related regulations.

Mortgages and liens exist, and related real estate is recorded with the registry of the Lands and Survey Department.  The Lands and Survey Department has a history of corruption, and there have been charges of land fraud, abuses, and cronyism leveled against the Department during each administration.  As part of its land reform policy, the Lands Department continues to engage with the public through mobile clinics, where Lands Department personnel visit communities across to country to address land concerns, including issuing freehold titles. Investors are nonetheless advised to perform due diligence prior to purchasing property.

Foreign and/or non-resident investors are not allowed to acquire national lease property but may acquire titled privately owned property.  The Central Bank regulates real estate transactions involving non-residents for exchange control purposes.  Additionally, the rate of stamp duty chargeable on land transfers involving foreign persons or a foreign controlled company is 8 percent for land transfers valued in excess of US $10,000, as opposed to 5 percent on transfers involving Belizeans and CARICOM nationals.

There are three different types of titles to freehold property in Belize: Deed of Conveyance, Transfer of Certificate of Title, and Land Certificate.  Leasehold property from the government is available to Belizeans who can then apply for conversion to a fee simple title. Squatters’ rights exist but are only enforceable by order of the Supreme Court after the resident has proven uninterrupted possession for at least 30 years on national lands or at least 12 years on registered lands.

Belize is a member of the WTO and has implemented the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).  Generally, Intellectual Property (IP) rights must be registered and enforced in Belize.  IP protections are enforceable through civil proceedings initiated by the IP holder.  The Belize Intellectual Property Office (BELIPO) (http://belipo.bz) was established to administer IP laws and functions as the country’s national intellectual property registry.  Its mandate covers the protection of copyrights, industrial designs, patents, trademarks, new plant varieties, and topographies of integrated circuits.

In practice, however, there is no active enforcement of IP protections, though there is active pursuit and prosecution of contraband.  Bootleg CDs and DVDs are widespread and are marketed throughout the country and are especially prevalent in the Free Zones. During the past year, Belize enacted the Patents (Amendment) Act, 2021 and the Trademarks (Amendment) Act, 2021. Both amendments allow the Registrar of Intellectual Property to delegate certain function to the Deputy Registrar. There has been no report on seizures of counterfeit goods and no prosecution of IPR violations in the last year. Belize is not listed in the 2021 USTR’s Special 301 report nor the 2021 notorious market report.

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

Belize’s financial system is small with little to no foreign portfolio investment transactions.  It does not have a stock exchange and capital market operations are rudimentary.  In 2021, Belize passed the Securities Industry Act for the modernization of the laws on securities and capital markets. The Central Bank of Belize must approve capital transactions, such as the purchase and sale of land, company shares, financial assets, and other investments that the transfer of assets between foreign and local entities. The Central Bank advised that, effective April 2022, it would only accept electronic applications for the approval of portfolio and capital investments and land transfers.

Belize accepted the obligations of Article VIII, and the exchange regime is free of restrictions or multiple currency practices.

Credit is made available on market terms with interest rates largely set by prevailing local market conditions within the commercial banks.  The credit instruments accessible to the private sector include loans, overdrafts, lines of credit, credit cards, and bank guarantees.  Foreign investors can access credit on the local market.  Under the International Banking Act, foreign investors/nonresidents may access credit from international banks registered and licensed in Belize. However, permission to access credit from the domestic banks requires Central Bank approval. The Belize Development Finance Corporation (DFC), a state-owned development bank, offers loan financing services in various sectors.  To qualify for a loan from DFC, an individual must be a Belizean resident or citizen, while a company must be majority 51 percent Belizean owned.  The National Bank of Belize is a state-owned bank that provides concessionary credit primarily to public officers, teachers, and low-income Belizeans.

A financial inclusion survey undertaken by the Central Bank of Belize in 2019 showed that approximately 65.5 percent of adult Belizeans had access to a financial account. In response, the banking sector has begun introducing digital wallet solutions to reach “unbanked” segments of the population.

Belize’s financial system remains underdeveloped with a banking sector that may be characterized as stable but fragile. International reserves increased from US $348 million (3.8 months of imports) in 2020 to US $420 million (3.9 months of imports) in 2021, partly due to the IMF’s Special Drawing Rights (SDR) 25.6 million allocation, which Belizean authorities are keeping as reserve.

Regulatory capital is still well above minimum requirements, while the gross non-performing loan (NPL) ratio at the end of February 2022 stood at 5.58 percent of loans. However, the Central Bank is reviewing domestic banks and credit unions self-assessments as the expired forbearance measures from 2020 could represent a risk as a fraction of their loan portfolio could turn into NPLs.

The Central Bank of Belize (CBB) ( https://www.centralbank.org.bz ) is responsible for formulating and implementing monetary policy focusing on the stability of the exchange rate and economic growth.

Generally, there are no restrictions on foreigners opening bank accounts in Belize. Regulations differ based on residency status and whether the individual is seeking to establish a local bank account or a foreign currency account.   Foreign banks and branches are allowed to operate in the country with all banks subject to Central Bank measures and regulations.

Since January 2020 to present, a domestic bank and an international bank each lost a correspondent bank. Belize’s financial system comprises five domestic banks, three international banks, and ten credit unions. Correspondent banks discontinued offered correspondent banking relationships (CBR) to Scotiabank (Belize) Limited following the acquisition of the Scotiabank (Belize) Limited by the Caribbean International Holdings Limited. As of February 2022, the estimated total assets of the country’s largest bank were US $1.09 billion.

In the last few years, Belize continues reforms to strengthen the anti-money laundering and counterterrorism-financing regime, including conducting an interagency national money laundering and terrorist financing (ML/TF) risk assessment.

Belize does not have a sovereign wealth fund.

State Owned Enterprises (SOEs) exist largely in the utilities sectors, generally as a result of nationalization.  The government is the majority shareholder in the Belize Water Services Limited, the country’s sole provider of water services, the Belize Electricity Limited, the sole distributor of electricity, and the Belize Telemedia Limited, the largest telecommunications provider in the country. The Public Utilities Commission regulates all utilities.

SOEs usually select senior government officials, members of local business bureaus and chambers of commerce, labor organizations, and quasi-governmental agencies to staff these companies’ boards of directors.  The board serves to direct policy and shape business decisions of the ostensibly independent SOE.  Current and previous administrations have been accused of nepotism and cronyism and criticized for having conflicts of interest when board members or directors are also represented in organizations that do business with the SOEs.

There is no published list of SOEs.  The following are the major SOEs operating in the country.  Information relating to their operations is available on their websites:  Belize Electricity Limited http://www.bel.com.bz ; Belize Telemedia Limited at https://www.livedigi.com ;  Belize Water Services Limited http://www.bws.bz 

There is no public third-party market analysis that evaluate whether SOEs receive non-market advantages by the government.  The Belize Electricity Limited and the Belize Water Services Limited are the only service providers in their respective sectors.  The Belize Telemedia Limited, on the other hand, competes with one other provider for mobile connectivity and there are multiple players that provide internet and data services.  U.S. firms have identified challenges in participating and competing in areas related to the bidding, procurement and dispute settlement processes, particular to SOEs.

The Government of Belize does not currently have a privatization program.

Belize generally lacks broad awareness of the expectations and standards for responsible business conduct (RBC).  However, many foreign and local companies engage in responsible corporate behaviors and partner with NGOs or international organizations to reinvest in community development and charitable work.  Companies sponsor educational scholarships, sports-related activities, community enhancement projects, and entrepreneurship activities, among other programs.  There is a strong thread of environmental awareness that also impacts business decision-making.  BELTRAIDE, in its official public outreach, promotes civic responsibility, especially in its outreach to entrepreneurs and aspiring businesspeople.

The Office of the Ombudsman is responsible for investigating complaints of official corruption and abuse of power.  As required by law, the Ombudsman is active in filing annual reports to the National Assembly and investigating incidents of alleged misconduct, particularly of police abuses.   This office continues to be constrained by the lack of enforcement powers, political pressure, and limited resources.

Belize has no recent cases of private-sector impact on human rights and no NGOs, investment funds, worker organizations/unions, or business associations specifically promote or monitor RBC.

Certain projects require the Department of the Environment’s approval for Environmental Impact Assessments or Environmental Compliance Plans. The Department of Environment website, http://www.doe.gov.bz , has more information on the Environmental Protection Act, various regulations, applications, and guidelines.

Belize has not adopted a particular accounting framework as its national standard. The International Financial Reporting Standards (IFRS) are required for domestic banks under the Domestic Bank and Financial Institutions Act (DBFIA) of Belize. Also, under the DBFIA, the Central Bank of Belize issues practice direction, directives, guidance, and advisories on corporate governance applicable to all banks and financial institutions operating and supervised by the Central Bank.

For other companies, Belize permits the use of IFRS Standards and the IFRS for SMEs as the standard financial reporting framework for preparing financial statements. The Institute of Chartered Accountants of Belize regards IFRS Standards as an allowed accounting framework under its professional standards. Alternatively, non-bank companies are permitted to use other internationally recognized standards. The U.S. Generally Accepted Accounting Principles (GAAP) and Canadian GAAP are often used. There are no government measures relating executive compensation standards and RBC policies are not factored into procurement decisions.  Opposition party political pronouncements often target official malfeasance in procurement and cronyism in government contracts, but these concerns are historically muted once the opposition takes power.

There are similarly no alleged or reported human or labor rights concerns relating to RBC. In recent years, labor unions and business associations have become actively engaged in advocating for stronger measures against corruption.

Belize does not have a developed mineral sector and is not a conflict or high-risk country.  As such, it does not adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas.  Belize’s extractive/mining industry is not developed, and it does not participate in the Extractive Industries Transparency Initiative (EITI) and/or the Voluntary Principles on Security and Human Rights.

The country is not a signatory of The Montreux Document on Private Military and Security Companies, nor is it a supporter of the International Code of Conduct or Private Security Service Providers and is not a participant in the International Code of Conduct for Private Security Service Providers’ Association.

Over the last decade, Belize has developed several important climate policy frameworks. These include the National Climate Resilience Investment Plan, Growth and Sustainable Development Strategy 2012 – 2017, and the National Climate Change Policy, Strategy and Action Plan (2015 – 2020. More recently in 2021, Belize submitted its updated National Determined Contributions (NDC), as well as its National Climate Finance Strategy, to reduce national greenhouse gas emissions as it responds to climate change.

Belize is categorized as a small island developing state (SIDS) that is highly vulnerable to the effects of climate changes and is a relatively minor contributor to global greenhouse gas emissions. Belize’s updated National Determined Contributions (NDC) is nonetheless committed to developing a long-term strategy aligned with achieving net zero global emissions by 2050. Government strategies do specify expectations on private sector contributions as well as support required to the private sector to achieve climate targets, particularly as they relate to the electricity, transportation, and waste management sectors.

Belize has a wide array of government policies that contribute to its climate and conservation agenda, including over one hundred terrestrial and marine protected areas through co-management arrangements between the government, non-government organizations, and community-based organizations. These are complemented by sustainable forest management, fisheries management, and other ecosystem management plans. Belize is hopeful for greater climate financing from multilateral institutions and creditors to implement climate change mitigation and adaptation policies.  In January 2022, the government established the Climate Finance Unit (CFU) to maximize Belize’s access to climate finance to enhance resilience and sustainable development. Some procurement policies do include environment and green growth considerations, particularly if projects are funded by external donors.

Belize has anticorruption laws that are seldom enforced.  Under the Prevention of Corruption in Public Life Act, public officials are required to make annual financial disclosures, but there is little adherence and poor enforcement.  The Act criminalizes acts of corruption by public officials and includes measures on the use of office for private gain; code of conduct breaches; the misuse of public funds; and bribery.  This Act also established an Integrity Commission mandated to monitor, prevent, and combat corruption by examining declarations of physical assets and financial positions filed by public officers.  In practice, the office is understaffed and charges are almost never brought against officials.  It is not uncommon for politicians disgraced in corruption scandals to return to government after a short period of time has elapsed. The Money Laundering and Terrorism (Prevention) Act identifies “politically exposed persons” to include family members or close associates of any politician.

The Ministry of Finance issues the Belize Stores Orders and Financial Orders – policies and procedures for government procurement.  The Manual for the Control of Public Finances provides the framework for the registration and use of public funds to procure goods and services. Private companies are neither required to establish internal codes of conduct, ethics, or compliance programs, nor is it common to use them.

In June 2001, the Government of Belize signed the Organization of American States (OAS) Inter-American Convention on Corruption, which calls for periodic reviews.   In December 2016, Belize acceded to the United Nations Convention Against Corruption (UNCAC) amid public pressure and demonstrations from the teachers’ unions.  The Belizean government continues to be criticized for the lack of political will to fully implement UNCAC.

There are few non-governmental institutions that monitor government activities. The most active, the National Trade Union Congress of Belize (NTUCB), lobbies within narrow labor-related areas.  Environmental NGOs and the Belize Chamber of Commerce and Industry (BCCI) often make statements regarding government policy as it affects their respective spheres of activity.  The government does not provide protection to NGOs investigating corruption.

Despite these measures, many businesspeople complain that both major political parties practice bias that creates an unlevel playing field related to businesses seeking licenses, the importation of goods, winning government contracts for procurement of goods and services, and transfer of government land to private owners.  Some middle-class citizens and business owners have complained of government officials, including police, soliciting bribes.

Contact at the government agency or agencies that are responsible for combating corruption:

Office of the Ombudsman
91 Freetown Road
Belize City, Belize
T: +501-223-3594
E:   ombudsman@btl.net 
W:   www.ombudsman.gov.bz

Office of the Auditor General
Corner of Douglas Jones Street & New Road
Belize City, Belize
Mountain View Boulevard
Belmopan City, Belize
501-222-5181, 222-5086, 822-2850, 822-0208

Belize Integrity Commission
National Assembly Building, Independence Hill
Belmopan, Belize
501-822-0121

For specific complaints within the police force:

Professional Standards Branch
1902 Constitutions Drive
Belmopan, Belize
T: +501-822-2218 or 822-2674

Belize has traditionally enjoyed one of the most stable political environments in the region, having held peaceful and transparent democratic elections since gaining independence on September 21, 1981.  In general elections, the two major political parties usually trade leadership. The current People’s United Party gained an overwhelming majority in the November 2020 General Elections, winning twenty-six of the thirty-one electoral divisions. The few times political candidates have questioned the result of elections, these have been settled by the court.

There were incidents of property destruction at two American companies involved in sugar cane industry in the last year. In December 2021, cane farmers from Belize’s largest cane farmers association blockaded the access road to a major American investment in Orange Walk for three days, preventing other farmers from delivering cane to the factory. An impasse between the cane farmer association and the sugar mill for a contract to deliver cane sparked the incident. The American investment subsequently initiated two legal suits against the cane farmer’s association for destruction to property and economic losses incurred. The second company located in the Cayo District, suffered arson in January 2022, presumably related to a conflict associated with land rights. Over 1,200 acres of sugar cane was lost in the fire, an estimated loss of US $1.15 million. In response, a prominent agro-productive organization wrote to the Government in January 2022 expressing concerns that the Belizean government’s failure to protect and support private sector investors in these instances led to damaging the investment climate and Belizean economy still further.

Neighboring Guatemala’s long-standing territorial claim on Belize has persisted for almost two centuries.  The International Court of Justice (ICJ) is currently deliberating the territorial dispute.  In December 2020, Guatemala filed its claim to Belize’s continental land, islands, and seas, and Belize will file its counter claim in June 2022. Despite legal efforts to resolve the claim, the Friends for Conservation and Development (FCD), a local Belizean NGO, continues to document illegal encroachments and settlements in and beyond the adjacency zone in Belize. In July 2021, FCD rangers accompanied by Belize Defence Force (BDF) members were fired upon by Guatemalan civilians as the former attempted to destroy illegal plantations in the Chiquibul forest reserve in Belize. The BDF retaliated, which in turn instigated the response of the Guatemalan Armed Forces (GAF). The incident did not escalate further and there were no casualties.

The second major security concern is the high level of crime countrywide. While Belize has a high murder rate per capita, it is primarily focused on the urban areas of Belize City. Corruption, human and drug trafficking, money laundering (institutional and trade-based), and local criminal gang activity remain significant problems exacerbated by the low conviction rate.

According to the Statistical Institute of Belize (SIB), the population was estimated to be 432,516 as of September 2021.  The labor force was 191,881 as of September 2021.  Of this, the unemployed amounted to 17,644 persons for an unemployment rate of 9.2 percent, representing a 4.5 percent decrease from September 2020. The report noted that about 48 percent of working aged women participated in the labor force and 76.1 percent of men. The main reason women did not look for work was due to personal or family responsibilities, while men did not look for work mainly due to school or training.

In its Labor Force Survey of September 2021, the Statistical Institute of Belize estimated the number of persons in informal employment was 72,433 accounting for about 41.6 percent of all employed persons. Persons in informal employment earned about US $420 per month. A 2018/2019 Household Budget Survey assessed the country’s poverty level had increased from 41.3 percent in 2009 to 52 percent in 2012. The poverty line in 2018 was assessed at US $3,980 per annum or US $331.66 monthly. The Government of Belize asserts the COVID-19 pandemic raised the poverty rate, which hovers at almost 60 percent, and sparked significant growth of the informal sector. The agriculture sector has identified shortage of unskilled labor in the agriculture sector. The health sector faces a shortage of qualified nurses and high.

In general, there are no restrictions on employers adjusting their labor force in response to fluctuating market conditions.  Employers are flexible in offering salary increases, which are normally justified based on cost of living and prevailing practice consideration.  Severance payment is subject to local labor law, the Labour Act Chapter 297.  This Act differentiates between layoffs (voluntary termination and redundancy) and firing (dismissal).  In the cases of voluntary termination and redundancy, the law provides for an appropriate notice period, payment in lieu of notice, severance, etc.  In the case of redundancy, the employer must notify, where applicable, the recognized trade union or workers’ representative as well as the Labour Commissioner.

In addition to the general Social Security system, the government maintains a National Health Insurance scheme in certain marginalized communities throughout the country.  The government also provides some assistance to unemployed persons who represent marginalized sectors of the community, e.g., single women, single mothers, and young unemployed persons.

Foreign investors who have a development concession are permitted to bring in skilled personnel to complement their local labor force and, if appropriate, establish training programs for Belizean nationals. Labor laws are not generally waived to attract or retain investment.

Belize has eleven trade unions and an umbrella organization, the National Trade Union Congress of Belize (NTUCB).  Belize has ratified 50 International Labor Organization (ILO) conventions, of which 45 are in force, including Convention 182 against the worst forms of child labor.  Trade unions are independent of the government and employers both in practice and in law.  The Department of Labour recognizes registered unions and employers’ associations.  Trade union laws establish procedures for the registration and status of trade unions and employers’ organizations and for collective bargaining.  Unions are common in the public sector (teachers, general public servants), the Social Security Board, the utility and agriculture sectors, and among port stevedores.

Where employees are unionized, employers must refer to the laws relating to the operation of unions as well as the terms of existing collective bargaining agreements between the employer and unions. Where disputes arise between an employer and employee in the private sector and where the employee is not represented by a union, both parties may approach the Labour Department to mediate discussions for an amicable solution. Failing a resolution, the matter is then first referred to the labor tribunal then to the court.

The national fire service, postal service, monetary and financial services, civil aviation and airport security services, and port authority pilots and security services are all deemed essential services. The law allows authorities to refer disputes involving employees who provide “essential services” to compulsory arbitration, prohibit strikes, and terminate actions.   On January 21, 2022, stevedores at the port in Belize City undertook industrial action against the port. The Essential Services Arbitration Tribunal delivered a notice on January 27, 2022, mandating the port management confirm the selected stevedores as registered stevedores, pay contributions to retirement savings for stevedores, and commence negotiations for the payment of redundancy packages. Port management countered with a lawsuit that remains before the courts, claiming US $500,000 in damages and loss of business.

Belize does have laws and regulations relating to international labor standards.  There is also a system in place for labor inspectors to advocate on labor-related concerns and complaints, as well as to visit and inspect business facilities to ensure adherence to local labor laws. Belize’s legislation does not address a situation in which child labor is contracted between a parent and the employer. The penalty for employing a child below minimum age is a fine not exceeding US $10 or imprisonment not exceeding two months.

Additionally, while there are laws that prohibit a wide range of discrimination in the workplace, they are not effectively enforced and do not explicitly provide protections for persons with disabilities or against discrimination related to sexual orientation and/or gender identity. There is anecdotal evidence that certain vulnerable sectors, particularly migrant workers, undocumented persons, young service workers, and agricultural laborers, were regularly paid below the minimum wage and classified as contract and nonpermanent employees to avoid providing certain benefits.

The GoB established a minimum wage task force to oversee the implementation of the five-dollar minimum wage in a phased approach, which is expected to commence by July 1, 2022.

Andrea De Arment
Chief of Political/Economic Section
4 Floral Park Road
Belmopan, Belize
T: +501-822-4011
BelmopanPolEcon@state.gov 

Vincent Lowney
Environmental, Science, Technology and Health Officer
4 Floral Park Road
Belmopan, Belize
T: +501-822-4011
BelmopanPolEcon@state.gov 

Carmen Silva
Economic/Commercial Assistant
4 Floral Park Road
Belmopan, Belize
T: +501-822-4011
BelmopanPolEcon@state.gov 

The Government of Dominica strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on local citizens.

Through the Invest Dominica Authority (IDA), the government instituted several investment incentives for businesses considering locating in Dominica.  Government policies provide liberal tax holidays, duty-free import of equipment and materials, exemption from value added tax on some capital investments, and withholding tax exemptions on dividends, interest payments, and some external payments and income.  The IDA additionally provides support to approved citizenship by investment projects.

The IDA launched a new Investment Promotion Strategy in 2021.  The new strategy is focused on four sectors: agriculture and agri-business, renewable energy, tourism, and knowledge services such as business processing operations.  Other sectors include film, music, and video production, manufacturing, bulk water export and bottled water operations, medical and nursing schools, and English language training services.  The government continuously reviews these sectors. While these sectors are priorities, the government broadly welcomes FDI.

Local laws do not place limits on foreign control in Dominica.  Foreign investment in Dominica is not subject to restrictions, and foreign investors are entitled to receive the same treatment as nationals of Dominica. Foreign investors are entitled to hold up to 100 percent of their investment.  However, there is a requirement for foreign investors seeking to purchase property for residential or commercial purposes to obtain an Alien Landholders License. Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.

The OECS, of which Dominica is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

The IDA is Dominica’s main business facilitation unit.  It facilitates foreign direct investment into priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in Dominica.  The IDA provides business support services and market intelligence to all investors.  It offers an online tool useful for navigating laws, rules, procedures, and registration requirements for foreign investors.  Its website is  http://investdominica.com .

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

The Companies and Intellectual Property Office (CIPO) maintains an e-filing portal for most of its services, including company registration on its website.  However, this only allows for the preliminary processing of applications prior to the investor physically making a payment at the Supreme Court office.  Investors are advised to seek the advice of a local attorney prior to starting the process.  Further information is available at  http://www.cipo.gov.dm .

Businesses must register with CIPO, the Tax Authority, and the Social Services Institute. The general practice for registration is to retain an attorney who prepares all the relevant incorporation documents.

Local laws do not place any restrictions on domestic investors seeking to do business abroad. Local companies in Dominica 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.

Dominica has not signed a bilateral investment treaty with the United States.  It benefits from the Caribbean Basin Economic Recovery Act (CBERA), which was implemented in January 1984. CBERA is intended to facilitate the development of stable Caribbean Basin economies by providing beneficiary countries with duty-free access to the U.S. market for most goods. Dominica has bilateral investment treaties with the UK and Germany.  Dominica has bilateral tax treaties with the United States and the UK.

Dominica is a member of the OECD Inclusive Framework on Base Erosion and Profit Sharing and is party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

Dominica is also party to the following agreements:

Caribbean Community (CARICOM)

The Treaty of Chaguaramas established CARICOM in 1973 to promote economic integration among its 15 member states.  Investors operating in Dominica have preferential access to the entire CARICOM market.  The Revised Treaty of Chaguaramas established the CSME, which permits the free movement of goods, capital, and labor within CARICOM member states.

Organization of Eastern Caribbean States

The Revised Treaty of Basseterre established the OECS.  The OECS consists of seven full members: Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, and four associate members: Anguilla, Martinique, Guadeloupe, and the British Virgin Islands.  The OECS aims to promote harmonization among member states concerning foreign policy, defense and security, and economic affairs.  The six independent countries of the OECS ratified the Revised Treaty of Basseterre, establishing the OECS Economic Union in 2011.  The Economic Union established a single financial and economic space within which all factors of production, including goods, services, and people, move without hindrance.

CARIFORUM- EU Economic Partnership Agreement

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

CARIFORUM-UK Economic Partnership Agreement

The UK and CARIFORUM signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union.  The CARIFORUM-UK EPA eliminates tariffs on all goods imported from CARIFORUM states into the UK, while those Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.

Caribbean Basin Initiative

The objective of the Caribbean Basin Initiative is to promote economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying economies, and expanding exports.  It permits duty-free entry of products manufactured or assembled in Dominica into the United States.

Caribbean/Canada Trade Agreement

The Caribbean/Canada Trade Agreement (CARIBCAN) is an economic and trade development assistance program for Commonwealth Caribbean countries.  Through CARIBCAN, Canada provides duty-free access to its national market for the majority of its products originating in Commonwealth Caribbean countries.

The Government of Dominica provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Finance and the IDA provide oversight of the transparency of the system as it relates to investment.

Rule-making and regulatory authority lies within the unicameral parliament.  The parliament has 21 members elected for a five-year term in single-seat constituencies, nine appointed members, one speaker, and one clerk.

Relevant ministries develop laws which are drafted by the Ministry of National Security and Home Affairs.  FDI is governed principally through the laws that oversee the IDA and the Citizenship by Investment program.  Laws are available online at  http://www.dominica.gov.dm/laws-of-dominica .

Although some draft bills are not subject to public consultation, the government generally solicits input from various stakeholder groups in the formulation of laws.  In some instances, the government convenes a special committee to make recommendations on provisions outlined in the law.  The government uses public awareness campaigns to sensitize the general population on legislative reforms. Copies of proposed regulations are published in the official gazette shortly before the bills are taken to parliament.  Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases.

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

The Office of the Parliamentary Commissioner or Ombudsman guards against excesses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating complaints related to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body. The government does not promote nor require companies’ environmental, social, and governance disclosures.

Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits it to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.

The enforcement mechanisms of these regulations include penalties or legal sanctions.  The IDA can revoke an issued investment certificate if the holder fails to comply with certain stipulations detailed in the IDA Act and its regulations. The regulatory enforcement process is not digitized.

As a member of the OECS and the ECCU, Dominica subscribes to a set of 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, Dominica is obligated to implement regionally developed regulations such as legislation passed under OECS authority, unless specific concessions are sought.

The Dominica Bureau of Standards develops, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, and facilitating trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain.  Dominica has already implemented a number of TFA requirements.  A full list is available at  https://tfadatabase.org/members/dominica/measure-breakdown .

As a member of CARICOM, Dominica utilizes the Advanced Cargo Information System, a computer-based system developed by the United Nations Conference on Trade and Development (UNCTAD) to harmonize and standardize electronic cargo information in order to improve the capability to track cargo efficiently and to support regional and international trade. The Advance Cargo Information System forms a critical part of the World Customs Organization SAFE Framework of Standards. Dominica has also fully implemented the Automated System for Customs Data.

Dominica bases its legal system on British common law.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country.  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 matters and makes determinations on the interpretation of the constitution.  Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.

The United States and Dominica 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.

The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act.  Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Alien Landholding Regulation Act, and the Residential Levy Act. The IDA provides a full list of the relevant legislation on their website.

The IDA reviews all proposals for investment concessions and incentives to ensure the project is consistent with the national interest and provides economic benefits to the country.  The Cabinet makes the final decision on investment proposals.

Under Dominica’s citizenship by investment program, qualified foreign investors may obtain citizenship without voting rights.  Applicants can contribute a minimum of $100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least $200,000.  Applicants must also provide a full medical certificate, undergo a background check, and provide evidence of the source of funds before proceeding to the final stage of an interview.  The government introduced a citizen by investment certificate in order to minimize the risk of unlawful duplication.  Further information is available at  http://cbiu.gov.dm .

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 to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  Dominica does not have domestic legislation to regulate competition.

There are no known pending expropriation cases involving American citizens.  In such an event, Dominica would employ a system of eminent domain to pay compensation when property must be acquired in the public interest.  There were no reported tendencies of the government to discriminate against U.S. investments, companies, or landholdings.  There are no laws mandating local ownership in specified sectors.

Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. A full copy of the act is available for download from the government’s website .

The Government of Dominica implemented a series of investment incentives codified in the Fiscal Incentives Act.  These include tax holidays for up to 20 years for approved hotel and resort development projects, duty-free concessions on the purchase of machinery and equipment, and various tax exemptions.  While there is no requirement for enterprises to purchase a fixed percentage of goods from local sources, the government encourages local sourcing.  There are no requirements for participation by nationals or the government in foreign investment projects.

Under the Fiscal Incentives Act, four types of enterprise qualify for tax holidays.  The length of the tax holiday for the first three types of enterprises depends on the amount of value added in Dominica.  The fourth type of enterprise, known as an enclave industry, must produce goods exclusively for export outside of the CARICOM region.

Companies that qualify for tax holidays are allowed to import into Dominica duty-free all equipment, machinery, spare parts, and raw materials used in production.

The Hotel Aid Act provides relief from customs duties on items brought into the country for use in construction, extension, and equipping of a hotel of not less than five bedrooms.  In addition, the Income Tax Act provides special tax relief benefits for approved hotels and villa development.  A tax holiday for up to 20 years is available for approved hotel and resort developments and up to 10 years for income accrued from the rental of villas in approved developments.  The Cabinet must approve these developments.

The standard corporate income tax rate is 25 percent.  There is no capital gains tax.  International businesses are exempt from tax.  Corporate tax does not apply to exempt companies or to enterprises that have been granted tax concession.

Dominica provides companies with a further tax concession effective at the end of the tax holiday period.  In effect, it is a rebate of a portion of the income tax paid based on export profits as a percentage of total profits.  Full exemption from import duties on parts, raw materials, and production machinery is also available.

The government offers incentives for investors in the renewable energy sector, including the reduction or exemption of import duties and VAT on related inputs and a reduction in corporate tax.

The Government of Dominica does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

There are no foreign trade zones or free ports in Dominica.

Dominica does not mandate use of local equipment.  The provisions of the Labor Code outline the requirements for acquiring a work permit and prohibit anyone who is not a citizen of Dominica or the OECS to engage in employment unless they have obtained a work permit.  When the government grants work permits to senior managers because no qualified nationals are available for the post, the government may recommend a counterparty trainee who is a Dominican citizen.  There are no excessively onerous visa, residency, or work permit requirements.

As a member of the WTO, Dominica 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 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 national treatment. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance.  There are no measures or draft measures that prevent or restrict companies from freely transmitting customer or other business-related data outside the country.

Civil law protects physical property and mortgage claims.  There are some special license requirements for the acquisition of land, development of buildings, and expansion of existing construction, and special standards for various aspects of the tourism industry.  Individuals or corporate bodies who are not citizens and who are seeking to acquire land require an Alien Landholders License prior to the execution of transactions, depending upon the amount of land in question.

Local laws dictate that a foreign national may hold less than one acre of land for residential purposes or less than three acres for commercial purposes without obtaining an alien landholding license. If more land is required then a license must be obtained, and the applicant must pay a fee of $2,220 (6,000 Eastern Caribbean dollars) to the Office of the Accountant-General.  Applicants must meet all the submission requirements before Cabinet can consider granting the license.  Failure to apply for the license will result in a penalty of $7,400 (20,000 Eastern Caribbean dollars).  Upon acquiring land under Section 5 for an approved development, foreign investors must apply for development permission under the Physical Planning Act within six months of acquiring the land and must start construction of the approved development within one year of receipt of development permission. If property legally purchased is unoccupied for over twelve years, property ownership can revert to other owners, such as squatters.  This was affirmed by the CCJ in a 2019 ruling.

Dominica has a legislative framework that supports the protection of intellectual property rights (IPR).  While the legal structures governing IPR are generally adequate, enforcement could be strengthened.  The Attorney General is responsible for the administration of IPR laws.  The Companies & Intellectual Properties Office (CIPO) registers patents, trademarks, and service marks.

Dominica is signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Berne Convention for the Protection of Literary and Artistic Works.  It is also a member of the UN World Intellectual Property Organization (WIPO).

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the CSME commits all 15 CARICOM members to implement IPR protection and enforcement.  The CARIFORUM-EU EPA contains the most detailed obligations regarding IPR in any trade agreement to which Dominica is party.  The CARIFORUM-EU EPA recognizes the protection and enforcement of IPR.  Article 139 of the CARIFORUM-EU 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 Rights (TRIPS).”

The Comptroller of Customs of Dominica spearheads the enforcement of IPR, which includes the detention, seizure, and forfeiture of goods.  The Customs and Excise Department investigates customs offenses and administers fines and penalties.

Dominica is not included in the United States Trade Representative (USTR) 2021 Special 301 Report or the 2021 USTR Review of Notorious Markets for Counterfeiting and Piracy.

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/ .

Dominica is a member of the ECCU.  As such, it is a member of the Eastern Caribbean Securities Exchange (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 the buying and selling of financial products for the eight member territories.  In 2021, the ECSE listed 164 securities, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities.  Market capitalization stood at $1.9 billion. Dominica is open to portfolio investment.

Dominica has accepted the obligations of Article VIII of the IMF Agreement, Sections 2, 3, and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions.  Dominica does not normally grant foreign tax credits except in the case of taxes paid in a British Commonwealth country that grants similar relief for Dominica 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, trade credits, and other accounts receivable that establish a claim for repayment.

The eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act.  The act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters. Dominica is a signatory to this agreement and the ECCB controls Dominica’s currency and regulates its domestic banks.

The Banking Act is a harmonized piece of legislation across the ECCU.  The Minister of Finance usually acts in consultation with, and on the recommendation of, the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.

Domestic and foreign banks can establish operations in Dominica.  The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business.  The ECCB regulates financial institutions.  As part of ongoing 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 Dominica as stable.  Assets of commercial banks totaled $781.8 million (2.1 billion Eastern Caribbean dollars) at the end of 2019. Dominica is well served by bank and non-financial institutions.  There are minimal alternative 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 and appointed a Committee of Ministers of Finance on Correspondent Banking to monitor the issue.

In 2019, the ECCB launched an 18-month financial technology pilot to launch a Digital Eastern Caribbean dollar (DXCD) with its partner, Barbados-based Bitt Inc.  An accompanying mobile application, DCash was officially launched in March 2021 in four pilot countries, adding Dominica to the pilot in December 2021. In January 2022, the platform experienced a system interruption, and its operation was suspended. The platform regained full functionality at the end of March 2022 following system upgrades. The digital Eastern Caribbean currency operates alongside physical Eastern Caribbean currency.  Dominica does not have any specific legislation to regulate cryptocurrencies.

Neither the Government of Dominica, nor the ECCB, of which Dominica is a member, maintains a sovereign wealth fund.

State-owned enterprises (SOEs) in Dominica work in partnership with ministries, or under their remit to carry out certain specific ministerial responsibilities.  The U.S. Embassy in Bridgetown is aware of 20 SOEs currently operating in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.  There is no published list of these SOEs.  They are all wholly owned government entities.  Each is headed by a board of directors to which senior management reports.  The SOE sector is affected by financial sustainability challenges, with resources insufficient to cover capital replacement.

Dominica does not currently have a targeted privatization program.

The private sector is involved in projects that benefit society, including support of environmental, social, and cultural causes.  The government encourages philanthropy but does not have regulations in place to mandate such activities by private companies.

Department of State

• Country Reports on Human Rights Practices ();
• Trafficking in Persons Report ();
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities () and;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ()
• Xinjiang Supply Chain Business Advisory ()

Department of the Treasury

• OFAC Recent Actions ().

Department of Labor

• Findings on the Worst forms of Child Labor Report ( ) and;
• List of Goods Produced by Child Labor or Forced Labor ().
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World (); and
• Comply Chain ().

Dominica’s climate policy is guided by its Climate Resiliency and Recovery Plan 2020-2030 and its Nationally Determined Contribution for reducing its greenhouse gas emissions. It does not have a specific strategy in place for monitoring natural capital. Following the devastation wrought by 2017’s Hurricane Maria, the government plans for Dominica to become fully climate resilient. Associated activities include a full transition to renewable energy, strengthening community disaster-response resources, and adaptation of homes and infrastructure to better survive severe weather events. Dominica has indicated that quickly achieving these goals will require substantial support from the international donor community. The government offers incentives for investors in the renewable energy sector, including the reduction or exemption of import duties and VAT on related inputs and a reduction in corporate tax. Public procurement policies do not include environmental and green growth considerations.

The law provides criminal penalties for corruption by officials; however, government implementation and enforcement of the law is inconsistent.   Members of the political opposition and civil society representatives allege that officials sometimes engaged in corrupt practices with impunity. Local media and opposition leadership continued to raise allegations of corruption within the government, including in the Citizenship by Investment program.  Dominica acceded to the United Nations Convention Against Corruption in 2010.  The country is party to the Inter-American Convention against Corruption.

The Integrity in Public Office Act, 2003 and the Integrity in Public Office (Amendment) Act 2015 require government officials to account annually for their income, assets, and gifts.  All offenses under the act, including the late filing of declarations, are criminalized.  The Integrity Commission was established to monitor the functions under this Act.  The Integrity Commission’s mandate and decisions can be found at  http://www.integritycommission.gov.dm .  Generally, the Integrity Commission reports on late submissions and on inappropriately completed forms but does not share financial disclosures of officials with the Office of the Director of Public Prosecutions. The Integrity Commission has not updated documents on its website since 2016.

The Director of Public Prosecutions is responsible for prosecuting corruption offenses, but it lacks adequate personnel and resources to handle complicated money laundering and public corruption cases.

Steve HyacinthChairman, Integrity CommissionCross Street, Roseau, DominicaTel: 1-767-266-3436Email:  integritycommission@dominica.gov.dm 

Dominica held parliamentary elections in December 2019.  Voting was held under heightened security following weeks of protests and legal challenges seeking electoral reform.  The protests were led by the United Workers’ Party, which lost the election in a landslide to the ruling Dominica Labour Party.

Dominica’s economy was severely affected by the COVID-19 crisis.  The IMF has projected that Dominica’s GDP will grow 7.9 percent in 2022.  In May 2020, the government unveiled a disaster resilience strategy that was based on three key pillars: structural resilience, financial resilience, and post-disaster resilience.  Both the IMF and the World Bank provided support to address the challenges posed by the COVID-19 pandemic.

The government last raised Dominica’s minimum wage in June 2008.  It varies according to the category of worker, with the lowest minimum wage set at approximately $1.50 an hour and the maximum set at approximately $2.06 an hour.  The standard workweek is 40 hours for five or six days of work.  The law provides overtime pay for work in excess of the standard workweek.  Dominica has a labor force of approximately 32,630, with a literacy rate of 95 percent.

The local state college largely meets the country’s technical and training needs.  There is also a small pool of professionals to draw from in fields such as law, medicine, engineering, business, information technology, and accounting.  Many of the professionals in Dominica trained in the United States, Canada, the UK, or the wider Caribbean, where many of them gained work experience before returning to the country.

The labor legislation in Dominica is applicable to all employees and employers.  There are no waivers or exceptions regarding the application of labor laws and standards in Dominica.

Employers usually advertise job vacancies in local newspapers.  The government recommends that the advertisement be placed on three separate occasions to ensure transparency and equal opportunity for Dominican residents to apply.  The Embassy is not aware of any instances of government interference with the employer’s right to make hiring determinations.

The Labor Contract Act stipulates that an employee shall receive a contract from his/her employer within 14 days of engagement outlining the terms and conditions of employment.

The labor laws clearly regulate and define layoffs and the conditions under which layoffs can occur.  Severance by redundancy is also regulated by law.  People employed for three years or more qualify for severance pay.  Social security benefits are payable only when the employee reaches retirement age.

The Industrial Relations Act provides for and regulates trade unions in both public and private sectors.  Dominican law provides for the right of workers to form and join independent unions, the right to strike, and the right of workers to bargain collectively with employers.  The government generally enforces laws governing worker rights effectively, and penalties generally were sufficient to deter violations.  Administrative and judicial procedures are not generally subject to lengthy delays or appeals.  Government mediation and arbitration are free of charge.  The law prohibits anti-union discrimination by providing that employers must reinstate workers who file a successful complaint of illegal dismissal, which can cover being fired for engaging in union activities or other grounds of wrongful dismissal. Employers generally reinstated or paid compensation to employees who obtained favorable rulings by the ministry following a complaint of legal dismissal.

Collective bargaining is permitted in all firms (both public and private) where the employees are unionized.  A copy of the collective bargaining agreement must be filed at the Ministry of Labor.  There are no sectoral collective agreements.  All unionized firms are obliged by law to negotiate terms and conditions of employment of all workers, whether or not they are members of a trade union.  Dominica ratified all of the International Labor Organization (ILO)’s eight core conventions on human rights and labor administration.

The government deemed emergency, port, electricity, telecommunications, and prison services employees, as well as banana, coconut, and citrus fruit cultivation workers “essential,” deterring workers in these sectors from going on the strike.  The ILO noted the list of essential services is broader than international standards.  Nonetheless, in practice essential workers conducted strikes and did not suffer reprisals.  The procedure for essential workers to strike is cumbersome, involving appropriate notice and submitting the grievance to the labor commissioner for possible mediation.  These actions are usually resolved through mediation by the Office of the Labor Commissioner, with the rest referred to the Industrial Relations Tribunal for binding arbitration.

The Industrial Relations Act also mandates the establishment of the Industrial Relations Board and the Industrial Relations Tribunals as dispute resolution mechanisms.  The Division of Labor acts as the first arbitrator with matters of investigation, mediation, and conciliation.  Matters are referred only to the tribunals by the minister when conciliation fails or by request of any of the disputing parties.

Enforcement is the responsibility of the Labor Commissioner within the Ministry of Justice, Immigration and National Security.  Labor laws provide that the labor commissioner may authorize the employment of a person with disabilities at a wage lower than the minimum rate to enable that person to work.  The Employment Safety Act provides occupational health and safety regulations that are consistent with international standards.  Workers have the right to remove themselves from unsafe work environments without jeopardizing their employment and the authorities effectively enforced this right in practice.

The informal economy plays a significant role in the labor market and economy of Dominica. The IMF has estimated that the informal economy averaged 46 percent of GDP over the 2011-2019 period. Nearly forty percent of informal sector workers were in wholesale and retail trade, with another 24 percent in manufacturing, 9 percent in agriculture, forestry, and fishing, and 29 percent in other industries. Despite the significance of the informal economy in Dominica, there is little evidence of its impact on contracts or access to industries of interest to U.S. and other foreign investors.

* Source for Host Country Data: Eastern Caribbean Central Bank  https://www.eccb-centralbank.org/statistics/dashboard-datas/ .

Table 3: Sources and Destination of FDIData not available.

Political/Economic SectionU.S. Embassy to Barbados, the Eastern Caribbean, and the Organization of Eastern Caribbean States246-227-4000Email:  BridgetownPolEcon@state.gov 

The Government of Dominica strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on local citizens.

Through the Invest Dominica Authority (IDA), the government instituted several investment incentives for businesses considering locating in Dominica.  Government policies provide liberal tax holidays, duty-free import of equipment and materials, exemption from value added tax on some capital investments, and withholding tax exemptions on dividends, interest payments, and some external payments and income.  The IDA additionally provides support to approved citizenship by investment projects.

The IDA launched a new Investment Promotion Strategy in 2021.  The new strategy is focused on four sectors: agriculture and agri-business, renewable energy, tourism, and knowledge services such as business processing operations.  Other sectors include film, music, and video production, manufacturing, bulk water export and bottled water operations, medical and nursing schools, and English language training services.  The government continuously reviews these sectors. While these sectors are priorities, the government broadly welcomes FDI.

Local laws do not place limits on foreign control in Dominica.  Foreign investment in Dominica is not subject to restrictions, and foreign investors are entitled to receive the same treatment as nationals of Dominica. Foreign investors are entitled to hold up to 100 percent of their investment.  However, there is a requirement for foreign investors seeking to purchase property for residential or commercial purposes to obtain an Alien Landholders License. Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.

The OECS, of which Dominica is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

The IDA is Dominica’s main business facilitation unit.  It facilitates foreign direct investment into priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in Dominica.  The IDA provides business support services and market intelligence to all investors.  It offers an online tool useful for navigating laws, rules, procedures, and registration requirements for foreign investors.  Its website is  http://investdominica.com .

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

The Companies and Intellectual Property Office (CIPO) maintains an e-filing portal for most of its services, including company registration on its website.  However, this only allows for the preliminary processing of applications prior to the investor physically making a payment at the Supreme Court office.  Investors are advised to seek the advice of a local attorney prior to starting the process.  Further information is available at  http://www.cipo.gov.dm .

Businesses must register with CIPO, the Tax Authority, and the Social Services Institute. The general practice for registration is to retain an attorney who prepares all the relevant incorporation documents.

Local laws do not place any restrictions on domestic investors seeking to do business abroad. Local companies in Dominica 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.

Dominica has not signed a bilateral investment treaty with the United States.  It benefits from the Caribbean Basin Economic Recovery Act (CBERA), which was implemented in January 1984. CBERA is intended to facilitate the development of stable Caribbean Basin economies by providing beneficiary countries with duty-free access to the U.S. market for most goods. Dominica has bilateral investment treaties with the UK and Germany.  Dominica has bilateral tax treaties with the United States and the UK.

Dominica is a member of the OECD Inclusive Framework on Base Erosion and Profit Sharing and is party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

Dominica is also party to the following agreements:

Caribbean Community (CARICOM)

The Treaty of Chaguaramas established CARICOM in 1973 to promote economic integration among its 15 member states.  Investors operating in Dominica have preferential access to the entire CARICOM market.  The Revised Treaty of Chaguaramas established the CSME, which permits the free movement of goods, capital, and labor within CARICOM member states.

Organization of Eastern Caribbean States

The Revised Treaty of Basseterre established the OECS.  The OECS consists of seven full members: Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, and four associate members: Anguilla, Martinique, Guadeloupe, and the British Virgin Islands.  The OECS aims to promote harmonization among member states concerning foreign policy, defense and security, and economic affairs.  The six independent countries of the OECS ratified the Revised Treaty of Basseterre, establishing the OECS Economic Union in 2011.  The Economic Union established a single financial and economic space within which all factors of production, including goods, services, and people, move without hindrance.

CARIFORUM- EU Economic Partnership Agreement

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

CARIFORUM-UK Economic Partnership Agreement

The UK and CARIFORUM signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union.  The CARIFORUM-UK EPA eliminates tariffs on all goods imported from CARIFORUM states into the UK, while those Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.

Caribbean Basin Initiative

The objective of the Caribbean Basin Initiative is to promote economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying economies, and expanding exports.  It permits duty-free entry of products manufactured or assembled in Dominica into the United States.

Caribbean/Canada Trade Agreement

The Caribbean/Canada Trade Agreement (CARIBCAN) is an economic and trade development assistance program for Commonwealth Caribbean countries.  Through CARIBCAN, Canada provides duty-free access to its national market for the majority of its products originating in Commonwealth Caribbean countries.

The Government of Dominica provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Finance and the IDA provide oversight of the transparency of the system as it relates to investment.

Rule-making and regulatory authority lies within the unicameral parliament.  The parliament has 21 members elected for a five-year term in single-seat constituencies, nine appointed members, one speaker, and one clerk.

Relevant ministries develop laws which are drafted by the Ministry of National Security and Home Affairs.  FDI is governed principally through the laws that oversee the IDA and the Citizenship by Investment program.  Laws are available online at  http://www.dominica.gov.dm/laws-of-dominica .

Although some draft bills are not subject to public consultation, the government generally solicits input from various stakeholder groups in the formulation of laws.  In some instances, the government convenes a special committee to make recommendations on provisions outlined in the law.  The government uses public awareness campaigns to sensitize the general population on legislative reforms. Copies of proposed regulations are published in the official gazette shortly before the bills are taken to parliament.  Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases.

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

The Office of the Parliamentary Commissioner or Ombudsman guards against excesses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating complaints related to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body. The government does not promote nor require companies’ environmental, social, and governance disclosures.

Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits it to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.

The enforcement mechanisms of these regulations include penalties or legal sanctions.  The IDA can revoke an issued investment certificate if the holder fails to comply with certain stipulations detailed in the IDA Act and its regulations. The regulatory enforcement process is not digitized.

As a member of the OECS and the ECCU, Dominica subscribes to a set of 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, Dominica is obligated to implement regionally developed regulations such as legislation passed under OECS authority, unless specific concessions are sought.

The Dominica Bureau of Standards develops, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, and facilitating trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain.  Dominica has already implemented a number of TFA requirements.  A full list is available at  https://tfadatabase.org/members/dominica/measure-breakdown .

As a member of CARICOM, Dominica utilizes the Advanced Cargo Information System, a computer-based system developed by the United Nations Conference on Trade and Development (UNCTAD) to harmonize and standardize electronic cargo information in order to improve the capability to track cargo efficiently and to support regional and international trade. The Advance Cargo Information System forms a critical part of the World Customs Organization SAFE Framework of Standards. Dominica has also fully implemented the Automated System for Customs Data.

Dominica bases its legal system on British common law.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country.  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 matters and makes determinations on the interpretation of the constitution.  Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.

The United States and Dominica 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.

The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act.  Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Alien Landholding Regulation Act, and the Residential Levy Act. The IDA provides a full list of the relevant legislation on their website.

The IDA reviews all proposals for investment concessions and incentives to ensure the project is consistent with the national interest and provides economic benefits to the country.  The Cabinet makes the final decision on investment proposals.

Under Dominica’s citizenship by investment program, qualified foreign investors may obtain citizenship without voting rights.  Applicants can contribute a minimum of $100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least $200,000.  Applicants must also provide a full medical certificate, undergo a background check, and provide evidence of the source of funds before proceeding to the final stage of an interview.  The government introduced a citizen by investment certificate in order to minimize the risk of unlawful duplication.  Further information is available at  http://cbiu.gov.dm .

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 to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  Dominica does not have domestic legislation to regulate competition.

There are no known pending expropriation cases involving American citizens.  In such an event, Dominica would employ a system of eminent domain to pay compensation when property must be acquired in the public interest.  There were no reported tendencies of the government to discriminate against U.S. investments, companies, or landholdings.  There are no laws mandating local ownership in specified sectors.

Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. A full copy of the act is available for download from the government’s website .

The Government of Dominica implemented a series of investment incentives codified in the Fiscal Incentives Act.  These include tax holidays for up to 20 years for approved hotel and resort development projects, duty-free concessions on the purchase of machinery and equipment, and various tax exemptions.  While there is no requirement for enterprises to purchase a fixed percentage of goods from local sources, the government encourages local sourcing.  There are no requirements for participation by nationals or the government in foreign investment projects.

Under the Fiscal Incentives Act, four types of enterprise qualify for tax holidays.  The length of the tax holiday for the first three types of enterprises depends on the amount of value added in Dominica.  The fourth type of enterprise, known as an enclave industry, must produce goods exclusively for export outside of the CARICOM region.

Companies that qualify for tax holidays are allowed to import into Dominica duty-free all equipment, machinery, spare parts, and raw materials used in production.

The Hotel Aid Act provides relief from customs duties on items brought into the country for use in construction, extension, and equipping of a hotel of not less than five bedrooms.  In addition, the Income Tax Act provides special tax relief benefits for approved hotels and villa development.  A tax holiday for up to 20 years is available for approved hotel and resort developments and up to 10 years for income accrued from the rental of villas in approved developments.  The Cabinet must approve these developments.

The standard corporate income tax rate is 25 percent.  There is no capital gains tax.  International businesses are exempt from tax.  Corporate tax does not apply to exempt companies or to enterprises that have been granted tax concession.

Dominica provides companies with a further tax concession effective at the end of the tax holiday period.  In effect, it is a rebate of a portion of the income tax paid based on export profits as a percentage of total profits.  Full exemption from import duties on parts, raw materials, and production machinery is also available.

The government offers incentives for investors in the renewable energy sector, including the reduction or exemption of import duties and VAT on related inputs and a reduction in corporate tax.

The Government of Dominica does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

There are no foreign trade zones or free ports in Dominica.

Dominica does not mandate use of local equipment.  The provisions of the Labor Code outline the requirements for acquiring a work permit and prohibit anyone who is not a citizen of Dominica or the OECS to engage in employment unless they have obtained a work permit.  When the government grants work permits to senior managers because no qualified nationals are available for the post, the government may recommend a counterparty trainee who is a Dominican citizen.  There are no excessively onerous visa, residency, or work permit requirements.

As a member of the WTO, Dominica 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 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 national treatment. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance.  There are no measures or draft measures that prevent or restrict companies from freely transmitting customer or other business-related data outside the country.

Civil law protects physical property and mortgage claims.  There are some special license requirements for the acquisition of land, development of buildings, and expansion of existing construction, and special standards for various aspects of the tourism industry.  Individuals or corporate bodies who are not citizens and who are seeking to acquire land require an Alien Landholders License prior to the execution of transactions, depending upon the amount of land in question.

Local laws dictate that a foreign national may hold less than one acre of land for residential purposes or less than three acres for commercial purposes without obtaining an alien landholding license. If more land is required then a license must be obtained, and the applicant must pay a fee of $2,220 (6,000 Eastern Caribbean dollars) to the Office of the Accountant-General.  Applicants must meet all the submission requirements before Cabinet can consider granting the license.  Failure to apply for the license will result in a penalty of $7,400 (20,000 Eastern Caribbean dollars).  Upon acquiring land under Section 5 for an approved development, foreign investors must apply for development permission under the Physical Planning Act within six months of acquiring the land and must start construction of the approved development within one year of receipt of development permission. If property legally purchased is unoccupied for over twelve years, property ownership can revert to other owners, such as squatters.  This was affirmed by the CCJ in a 2019 ruling.

Dominica has a legislative framework that supports the protection of intellectual property rights (IPR).  While the legal structures governing IPR are generally adequate, enforcement could be strengthened.  The Attorney General is responsible for the administration of IPR laws.  The Companies & Intellectual Properties Office (CIPO) registers patents, trademarks, and service marks.

Dominica is signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Berne Convention for the Protection of Literary and Artistic Works.  It is also a member of the UN World Intellectual Property Organization (WIPO).

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the CSME commits all 15 CARICOM members to implement IPR protection and enforcement.  The CARIFORUM-EU EPA contains the most detailed obligations regarding IPR in any trade agreement to which Dominica is party.  The CARIFORUM-EU EPA recognizes the protection and enforcement of IPR.  Article 139 of the CARIFORUM-EU 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 Rights (TRIPS).”

The Comptroller of Customs of Dominica spearheads the enforcement of IPR, which includes the detention, seizure, and forfeiture of goods.  The Customs and Excise Department investigates customs offenses and administers fines and penalties.

Dominica is not included in the United States Trade Representative (USTR) 2021 Special 301 Report or the 2021 USTR Review of Notorious Markets for Counterfeiting and Piracy.

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/ .

Dominica is a member of the ECCU.  As such, it is a member of the Eastern Caribbean Securities Exchange (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 the buying and selling of financial products for the eight member territories.  In 2021, the ECSE listed 164 securities, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities.  Market capitalization stood at $1.9 billion. Dominica is open to portfolio investment.

Dominica has accepted the obligations of Article VIII of the IMF Agreement, Sections 2, 3, and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions.  Dominica does not normally grant foreign tax credits except in the case of taxes paid in a British Commonwealth country that grants similar relief for Dominica 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, trade credits, and other accounts receivable that establish a claim for repayment.

The eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act.  The act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters. Dominica is a signatory to this agreement and the ECCB controls Dominica’s currency and regulates its domestic banks.

The Banking Act is a harmonized piece of legislation across the ECCU.  The Minister of Finance usually acts in consultation with, and on the recommendation of, the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.

Domestic and foreign banks can establish operations in Dominica.  The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business.  The ECCB regulates financial institutions.  As part of ongoing 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 Dominica as stable.  Assets of commercial banks totaled $781.8 million (2.1 billion Eastern Caribbean dollars) at the end of 2019. Dominica is well served by bank and non-financial institutions.  There are minimal alternative 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 and appointed a Committee of Ministers of Finance on Correspondent Banking to monitor the issue.

In 2019, the ECCB launched an 18-month financial technology pilot to launch a Digital Eastern Caribbean dollar (DXCD) with its partner, Barbados-based Bitt Inc.  An accompanying mobile application, DCash was officially launched in March 2021 in four pilot countries, adding Dominica to the pilot in December 2021. In January 2022, the platform experienced a system interruption, and its operation was suspended. The platform regained full functionality at the end of March 2022 following system upgrades. The digital Eastern Caribbean currency operates alongside physical Eastern Caribbean currency.  Dominica does not have any specific legislation to regulate cryptocurrencies.

Neither the Government of Dominica, nor the ECCB, of which Dominica is a member, maintains a sovereign wealth fund.

State-owned enterprises (SOEs) in Dominica work in partnership with ministries, or under their remit to carry out certain specific ministerial responsibilities.  The U.S. Embassy in Bridgetown is aware of 20 SOEs currently operating in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.  There is no published list of these SOEs.  They are all wholly owned government entities.  Each is headed by a board of directors to which senior management reports.  The SOE sector is affected by financial sustainability challenges, with resources insufficient to cover capital replacement.

Dominica does not currently have a targeted privatization program.

The private sector is involved in projects that benefit society, including support of environmental, social, and cultural causes.  The government encourages philanthropy but does not have regulations in place to mandate such activities by private companies.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Dominica’s climate policy is guided by its Climate Resiliency and Recovery Plan 2020-2030 and its Nationally Determined Contribution for reducing its greenhouse gas emissions. It does not have a specific strategy in place for monitoring natural capital. Following the devastation wrought by 2017’s Hurricane Maria, the government plans for Dominica to become fully climate resilient. Associated activities include a full transition to renewable energy, strengthening community disaster-response resources, and adaptation of homes and infrastructure to better survive severe weather events. Dominica has indicated that quickly achieving these goals will require substantial support from the international donor community. The government offers incentives for investors in the renewable energy sector, including the reduction or exemption of import duties and VAT on related inputs and a reduction in corporate tax. Public procurement policies do not include environmental and green growth considerations.

The law provides criminal penalties for corruption by officials; however, government implementation and enforcement of the law is inconsistent.   Members of the political opposition and civil society representatives allege that officials sometimes engaged in corrupt practices with impunity. Local media and opposition leadership continued to raise allegations of corruption within the government, including in the Citizenship by Investment program.  Dominica acceded to the United Nations Convention Against Corruption in 2010.  The country is party to the Inter-American Convention against Corruption.

The Integrity in Public Office Act, 2003 and the Integrity in Public Office (Amendment) Act 2015 require government officials to account annually for their income, assets, and gifts.  All offenses under the act, including the late filing of declarations, are criminalized.  The Integrity Commission was established to monitor the functions under this Act.  The Integrity Commission’s mandate and decisions can be found at  http://www.integritycommission.gov.dm .  Generally, the Integrity Commission reports on late submissions and on inappropriately completed forms but does not share financial disclosures of officials with the Office of the Director of Public Prosecutions. The Integrity Commission has not updated documents on its website since 2016.

The Director of Public Prosecutions is responsible for prosecuting corruption offenses, but it lacks adequate personnel and resources to handle complicated money laundering and public corruption cases.

Steve Hyacinth
Chairman, Integrity Commission
Cross Street, Roseau, Dominica
Tel: 1-767-266-3436
Email:  integritycommission@dominica.gov.dm 

Dominica held parliamentary elections in December 2019.  Voting was held under heightened security following weeks of protests and legal challenges seeking electoral reform.  The protests were led by the United Workers’ Party, which lost the election in a landslide to the ruling Dominica Labour Party.

Dominica’s economy was severely affected by the COVID-19 crisis.  The IMF has projected that Dominica’s GDP will grow 7.9 percent in 2022.  In May 2020, the government unveiled a disaster resilience strategy that was based on three key pillars: structural resilience, financial resilience, and post-disaster resilience.  Both the IMF and the World Bank provided support to address the challenges posed by the COVID-19 pandemic.

The government last raised Dominica’s minimum wage in June 2008.  It varies according to the category of worker, with the lowest minimum wage set at approximately $1.50 an hour and the maximum set at approximately $2.06 an hour.  The standard workweek is 40 hours for five or six days of work.  The law provides overtime pay for work in excess of the standard workweek.  Dominica has a labor force of approximately 32,630, with a literacy rate of 95 percent.

The local state college largely meets the country’s technical and training needs.  There is also a small pool of professionals to draw from in fields such as law, medicine, engineering, business, information technology, and accounting.  Many of the professionals in Dominica trained in the United States, Canada, the UK, or the wider Caribbean, where many of them gained work experience before returning to the country.

The labor legislation in Dominica is applicable to all employees and employers.  There are no waivers or exceptions regarding the application of labor laws and standards in Dominica.

Employers usually advertise job vacancies in local newspapers.  The government recommends that the advertisement be placed on three separate occasions to ensure transparency and equal opportunity for Dominican residents to apply.  The Embassy is not aware of any instances of government interference with the employer’s right to make hiring determinations.

The Labor Contract Act stipulates that an employee shall receive a contract from his/her employer within 14 days of engagement outlining the terms and conditions of employment.

The labor laws clearly regulate and define layoffs and the conditions under which layoffs can occur.  Severance by redundancy is also regulated by law.  People employed for three years or more qualify for severance pay.  Social security benefits are payable only when the employee reaches retirement age.

The Industrial Relations Act provides for and regulates trade unions in both public and private sectors.  Dominican law provides for the right of workers to form and join independent unions, the right to strike, and the right of workers to bargain collectively with employers.  The government generally enforces laws governing worker rights effectively, and penalties generally were sufficient to deter violations.  Administrative and judicial procedures are not generally subject to lengthy delays or appeals.  Government mediation and arbitration are free of charge.  The law prohibits anti-union discrimination by providing that employers must reinstate workers who file a successful complaint of illegal dismissal, which can cover being fired for engaging in union activities or other grounds of wrongful dismissal. Employers generally reinstated or paid compensation to employees who obtained favorable rulings by the ministry following a complaint of legal dismissal.

Collective bargaining is permitted in all firms (both public and private) where the employees are unionized.  A copy of the collective bargaining agreement must be filed at the Ministry of Labor.  There are no sectoral collective agreements.  All unionized firms are obliged by law to negotiate terms and conditions of employment of all workers, whether or not they are members of a trade union.  Dominica ratified all of the International Labor Organization (ILO)’s eight core conventions on human rights and labor administration.

The government deemed emergency, port, electricity, telecommunications, and prison services employees, as well as banana, coconut, and citrus fruit cultivation workers “essential,” deterring workers in these sectors from going on the strike.  The ILO noted the list of essential services is broader than international standards.  Nonetheless, in practice essential workers conducted strikes and did not suffer reprisals.  The procedure for essential workers to strike is cumbersome, involving appropriate notice and submitting the grievance to the labor commissioner for possible mediation.  These actions are usually resolved through mediation by the Office of the Labor Commissioner, with the rest referred to the Industrial Relations Tribunal for binding arbitration.

The Industrial Relations Act also mandates the establishment of the Industrial Relations Board and the Industrial Relations Tribunals as dispute resolution mechanisms.  The Division of Labor acts as the first arbitrator with matters of investigation, mediation, and conciliation.  Matters are referred only to the tribunals by the minister when conciliation fails or by request of any of the disputing parties.

Enforcement is the responsibility of the Labor Commissioner within the Ministry of Justice, Immigration and National Security.  Labor laws provide that the labor commissioner may authorize the employment of a person with disabilities at a wage lower than the minimum rate to enable that person to work.  The Employment Safety Act provides occupational health and safety regulations that are consistent with international standards.  Workers have the right to remove themselves from unsafe work environments without jeopardizing their employment and the authorities effectively enforced this right in practice.

The informal economy plays a significant role in the labor market and economy of Dominica. The IMF has estimated that the informal economy averaged 46 percent of GDP over the 2011-2019 period. Nearly forty percent of informal sector workers were in wholesale and retail trade, with another 24 percent in manufacturing, 9 percent in agriculture, forestry, and fishing, and 29 percent in other industries. Despite the significance of the informal economy in Dominica, there is little evidence of its impact on contracts or access to industries of interest to U.S. and other foreign investors.

* Source for Host Country Data: Eastern Caribbean Central Bank  https://www.eccb-centralbank.org/statistics/dashboard-datas/ .

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

Table 4: Sources of Portfolio Investment
Data not available.

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

Grenada employs a liberal approach to foreign direct investment (FDI) and actively promotes foreign investment into the country.

The government of Grenada identified five priority sectors for investment:

• Tourism and hospitality services
• Education and health services
• Information and communication technology
• Agribusiness
• Energy development

The Grenada Investment Development Corporation (GIDC) is the country’s investment promotion agency. It was established in 1985 to stimulate, facilitate, and encourage the creation and development of industry.

The GIDC is a “one-stop shop” offering:

• Investment and trade information
• Investment incentives
• Investment facilitation and aftercare
• Entrepreneurial/business skills training
• Small business support services
• Industrial facilities
• Policy advice

To promote FDI, the GIDC adopts a targeted approach to promote investment opportunities, provides investor facilitation and entrepreneurial development services, and advocates for a supportive environment for investors to develop and grow businesses, trade, and industries.

Investment retention is a priority in Grenada and is maintained through ongoing dialogue with investors facilitated by the GIDC.

There are no economic and industrial strategies that discriminate against foreign investors. Non-Grenadian investors may be required to obtain an Alien Landholding License and pay a property transfer tax, which levies a 10 percent fee on the purchase of shares in a Grenadian registered company or real estate. In addition, the sale of such shares or real estate to non-nationals will attract a property transfer tax of 15 percent payable by the seller if the seller is a non-Grenadian. Foreign investors employed in Grenada are required to obtain a work permit, renewable annually. U.S. investors must pay a fee of USD $1,111 or XCD $3,000 for work permits. The renewal fee varies based on the investor’s country of citizenship.

There are no limits on foreign ownership or control, except for enterprises deemed prejudicial to national security, the environment, public health, or national culture, or which contravene the laws of Grenada. Grenada has accepted but not yet implemented regional anti-competition obligations. U.S investors are not disadvantaged or singled out by any of the ownership or control mechanisms, sector restrictions, or investment screening mechanisms in Grenada relative to other foreign investors.

Grenada maintains an investment screening and approval mechanism for inbound foreign investment. Inbound investment is screened and approved by the Grenada Investment Development Corporation. GIDC will review the submitted proposal and advise on the requirements and processes for doing business in Grenada. Depending on the type of investment they will work with the respective ministries. Post is unaware of any notable public statements by government officials or private sector representatives about the screening mechanism.

Grenada passed its most recent Investment Promotion Act in 2014. The legislation promotes, encourages, and protects investment in Grenada by providing investors with a stable framework of fundamental and enforceable rights. It seeks to guarantee and ensure security and fairness in strict accordance with the rule of law and best international standards and practices. The 2014 Act is also in compliance with WTO regulations, the Economic Partnership Agreement between the EU and the Caribbean Community (CARICOM), and the Agreement between the Caribbean Forum (CARIFORUM) and the EU.

The incentives regime enacted in 2016 grants incentives to ensure that all new tax exemptions are codified, restricts discretionary exemptions, and requires that the beneficiaries of exemptions file appropriate tax returns and comply with tax requirements. It also sets streamlined, simple, and non-discretionary systems/processes for the granting of incentives. The Customs and Inland Revenue Departments (CIRD) administer exemptions through a clearly defined rule-based system in contrast with past incentive schemes that required each case to be approved at the cabinet level.

Under this regime, the CIRD grants incentives to projects within the priority sectors for investment. These priority sectors are tourism, manufacturing, agriculture and agribusiness, information technology services, telecommunication providers and business process outsourcing operations, education and training, health and wellness, creative industries, energy, and research and development. Other sectors include student accommodation, heavy equipment operators, investment projects above particular investment thresholds, and projects within specific geographical locations.

The incentive regime seeks to provide investment incentives on a performance basis (i.e., the more one invests, the more incentives one can receive). Therefore, based on the level of investment, CIRD grants different levels of incentives in a transparent, predictable, and non-discriminatory manner.

In the past three years, the government was not subject to third-party investment policy reviews through multilateral organizations such as the Organization for Economic Cooperation and Development (OECD), the WTO, and the UN Conference on Trade and Development.

In the past five years, Post is unaware of any civil society organization, including those based in Grenada or in third countries, that provided useful reviews of investment policy-related concerns.

An investor must register a business name and identify whether it is a partnership or limited liability company. A registered business can be wholly owned or a joint venture. The official website of the GIDC includes an investor’s guide that details the procedures for starting and operating a business in Grenada. The guide has a business procedure flow chart and gives step-by-step instructions for various tasks from registering a business and owning properties to obtaining permits and licenses. Detailed information on business registration and timelines can be found at: http://grenadaidc.com/investor-centre/investors-guide/starting-up-a-business/#.WKxXdfnQe70 

The GIDC provides business facilitation mechanisms and ensures the equitable treatment of women and underrepresented minorities in the economy.

The government of Grenada does not promote or incentivize outward investment. The Revised Treaty of Chaguaramas, to which Grenada is a party, includes a chapter on service agreements under the European Partnership Agreement (EPA). Under certain circumstances, provisions in these agreements may offer incentives to the potential investor. Grenada does not restrict domestic investors from investing abroad.

Grenada recognizes that investors value transparent rules and regulations dealing with investment.

The Investment Act and the investment promotion regime promote transparency by authorizing investment incentives to key sectors through the GIDC. This helps to streamline processes, standardize treatment of investors, and better define investment rights. It also provides procedural guarantees and reduces the possibility for political influence in business negotiation.

Grenada also seeks to promote investment by consulting with interested parties, simplifying and codifying legislation, using plain language drafting, developing registers of existing and proposed regulation, expanding electronic dissemination of regulatory material, and publishing and reviewing administrative decisions.

Tax, labor, environment, health and safety, and other laws or policies do not distort or impede investment. Bureaucratic procedures, including those for licenses and permits, are sufficiently streamlined and transparent. However, local authorities recognize that the implementation of procedures can sometimes be slow and inefficient.

Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. Public finances and debt obligations, including explicit and contingent liabilities, are also transparent and in keeping with international requirements.

Depending on the type of investment, government will require companies’ environmental, social, and governance (ESG) disclosure. Not only does this facilitate transparency, but also ensures corporate responsibility and protection of the country’s social and environmental resources.

Draft bills, particularly those that directly impact the public, often go through a public consultation process to address any concerns and allow for revision before being brought before cabinet and passed into law.

No new regulatory systems and enforcement reforms have been announced since the last ICS report.

Grenada has been a member of the WTO since 1996 and is a party to agreements established under the organization. In pursuit of WTO compliance, Grenada is in the process of negotiating trade and investment agreements that contain provisions better aligned with the provisions of the WTO. Grenada is a member of CARICOM and the CARICOM Single Market Economy, which adheres to the international norms and regulatory standards outlined by the WTO. Also, in keeping with WTO regulations the government notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

The Prime Minister and the cabinet have the executive authority to negotiate and sign international agreements and conventions with other states and international organizations.

Grenada’s judicial system is based on English common law. The judiciary has four levels: the Magistrates Court, the High Court, the Eastern Caribbean Supreme Court, and the UK-based Privy Council.

The Magistrates Court primarily handles minor civil and criminal cases, while the High Court adjudicates cases under the purview of the Acts of Parliament. Appeals from the Magistrates Court are heard by the High Court, while appeals from the High Court are heard by the Eastern Caribbean Supreme Court. The Eastern Caribbean Supreme Court is comprised of the Chief Justice, who serves as the Head of the Judiciary; four Justices of Appeal; nineteen High Court Judges; and three Masters, who are primarily responsible for procedural and interlocutory matters. The Court of Appeal judges are based at the Court’s headquarters in Saint Lucia.

The Privy Council serves as Grenada’s final Court of Appeal. However, the Caribbean Court of Justice has compulsory and exclusive jurisdiction under Section 211 of the Revised Treaty of Chaguaramas, to which Grenada is a party. The Treaty delineates rights and responsibilities within CARICOM to hear and decide disputes concerning the interpretation and application of the Treaty.

The judicial system remains independent of the executive branch, and judicial processes are generally competent, fair, and reliable, however the process can be slow. Provisions are also made for appeals with the relevant court. Grenadian law also provides for the use of arbitration and mediation to resolve investment disputes.

The economy is supported by a strong legislative and regulatory framework that encourages FDI and promotes investment initiatives. Grenada augmented the investment climate with a revitalization of its Citizenship by Investment (CBI) program.

In 2016 parliament passed its most recent suite of legislative changes to enhance the investment climate in Grenada. Changes were made to the following Acts:

Value Added Tax Amendment Act – Provides for VAT exemptions for qualifying investments in priority sectors.

Excise Tax Amendment Act – Provides for tax incentives for investors engaged in manufacturing and investors entitled to conditional duties exemptions for motor vehicles.

Property Transfer Tax Amendment Act – Establishes more favorable rates of property transfer tax for investors.

Customs Service Charge Amendment Act – Removes the discretionary power of cabinet to prescribe varying rates of customs service charge (CSC) and to prescribe a new rate of CSC applicable to investors engaged in manufacturing.

Investment Amendment Act– Provides for specified circumstances under which the Minister of Finance may make regulations under the Principal Act.

Bankruptcy and Insolvency Amendment Act – Modernizes the law relating to bankruptcy and insolvency of individuals and companies. The act is based on the Canadian Bankruptcy and Insolvency Act, which has been used as a model in several Caribbean countries.

Income Tax Amendment Act – Provides for a waiver on withholding tax applicable on specified types of repatriated funds relating to investors engaged in tourism accommodation or health and wellness.

The GIDC and the Inland Revenue and Customs Department of Grenada work to ensure adherence to the rule of law and to facilitate the procedures outlined in the revised investment regime. The legal and regulatory framework governing foreign direct investment in Grenada is described here: http://grenadaidc.com/ 

There are no competition laws in Grenada. A number of CARICOM and Organization of Eastern Caribbean States (OECS) proposals on competition are under consideration to strengthen market regimes under the CARICOM Single Market and Economy. CARICOM established a Competition Commission and plans are underway to establish a sub-regional Eastern Caribbean Competition Commission.

According to the constitution, Grenada shall not compulsorily acquire or take possession of any investment or any asset of an investor except for a purpose which is legal and non-discriminatory. If the government expropriates property for a legal purpose, it must promptly pay adequate and effective compensation. Owners of expropriated assets have the right to file claims in the High Court regarding the amount of compensation or ownership of the expropriated asset.

In 2016, parliament repealed the 1994 Electricity Supply Act and opened the market to potential investors who will commit to transition to alternative sources of power generation, decreasing costs, reducing dependence on imported fossil fuels, and improving energy efficiency. This repealed the exclusive license that was granted to the country’s sole electricity provider Grenada Electricity Services (GRENLEC) and its majority shareholder, U.S.-owned WRB Enterprises. This regulatory change triggered a clause in the Share Purchase Agreement requiring Grenada to repurchase the GRENLEC shares from WRB. WRB filed a request for arbitration with ICSID, and the Grenada government was ordered to pay $74 million to the U.S. investors following a March 2020 ruling. A negotiated sum of $63 million was paid to WRB Enterprises in December 2020.

In the past, Grenadian citizens had their lands expropriated to permit foreign investments but were compensated for such actions, typically at the market value. There are no sectors at greater risk of expropriation, and there are no laws requiring local ownership. All expropriations have been subject to due process.

The Bankruptcy Act makes provisions for all aspects of bankruptcy and sets out procedures for creditors to apply to the High Court for a bankruptcy order against a debtor and the appointment of a trustee in bankruptcy. There are provisions for the court to appoint an interim receiver pending the outcome of the application for a bankruptcy order. It also includes provisions for a process whereby an insolvent person, with leave of the court, may make an assignment of the insolvent person’s property for the general benefit of creditors of the insolvent person. The High Court exercises exclusive jurisdiction in matters related to bankruptcy.

Grenada provides a legal package of benefits and concessions for specific investment activities. Incentives include tax waivers, import duty exemptions, repatriation of profits, and withholding tax exemptions.

Trade-related incentives are notified under Article 25 and Article 27 of the Agreement on Subsidies and Countervailing Measures. Concessions are available under the Income Tax Act, the Common External Tariff (SRO 42/09), the Property Transfer Act, the Petrol Tax Act, and the Customer Service Charge Act.

Fiscal incentives include:

• 100 percent investment allowances up to 15 years
• 50-100 percent property transfer tax waivers
• 50-100 percent withholding tax waivers
• Tax credits of 150 percent for training, research, and development
• Waiver of VAT on importation of capital goods
• Tax exemptions and waiver of duties on building materials

Non-fiscal incentives include:

• Equal treatment of all investors regardless of nationality or residence
• Conversion into freely convertible currency
• No discrimination among foreign investors
• Repatriation of profits allowed

Other incentives include accelerated depreciation (10 percent on physical plant and machinery; 2 percent on industrial buildings); investment allowance (100 percent write-off on total investment); carry forward of losses for three years; reductions in the property transfer tax; and 100 percent relief from customs duties on physical plant, equipment, and raw materials. Certain incentives may be linked to the site of investment, the number of persons employed, or other factors, including for green energy investments. These investment incentives also apply to businesses owned by underrepresented investors such as women.

Energy is a priority sector for investment in Grenada. This also includes any business activity that involves the production of energy, including fuel extraction, renewables, refining and distribution. The government offers the following investment incentives for the energy sector:

Capital Investment Allowance

100 percent of the qualifying capital expenditure (EC$3 million and over) will be written off against taxable income for a period not exceeding 15 years.

Customs Duties Exemptions on the following:

• Building materials, fixtures and furnishings, networking elements and computer hardware and software.
• Production machinery, equipment and spare parts for approved machinery and equipment for use in operations.
• 50-100 percent relief from import duties and taxes on a maximum of four to six commercial vehicles.
• Value Added Tax (VAT) Suspension/Exemption
• Applied to capital goods imported for the establishment of the operation.
• Property Transfer Tax Waivers
• 50 -100 percent (based on qualifying investment) property transfer tax waivers on the acquisition of property.
• Carry forward of losses
• 100 percent of losses incurred in any one year be carried forward for six years and offset against 100 percent of taxable income.
• Tax credit for Training: Training allowance (deductible) at the rate of 150 percent on the qualifying cost of training not exceeding EC$5000 per employee trained of taxable income and to include the following:
• The cost of hiring an instructor to conduct the training
• Tuition paid to an educational or other institution offering training
• A stipend paid to the individual being trained to cover subsistence during the training period but not in excess of two months for a particular individual

There was no instance where Grenada needed to review an approved investor for non-compliance with incentive requirements. Grenada does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

There are no foreign trade zones or free ports in Grenada.

CARICOM investors are accorded Rights of Establishment, while other foreign investors are required to obtain work permits and alien landholding licenses to invest in property.

The application fee for a work permit is USD $37/XCD $100 payable to the Work Permit Division of the Ministry of Labor. Along with the completed application form, applicants must also submit four passport-sized photos, a police certificate of character from their country, certificates of qualification, and a letter of intention. In addition, investors will need a character reference from a reputable person/former employer, a copy of the passport page indicating the last date of arrival in Grenada, a business registration certificate, company stamp, National Insurance Scheme compliance certificate, and recent tax compliance and VAT receipts.

The approval process takes two to three weeks, longer if there are questions, and is valid for one year. U.S. investors and workers are required to pay USD $1,111 or XCD $3,000 per year for renewal. The local government does not mandate local employment but encourages it.

There is no policy of “forced localization” of data storage and Grenada does not pressure international information and communications technology providers to provide source code or encryption keys. The OECS and other stakeholders have begun to develop draft model laws on electronic regimes. Laws specific to data storage and protection have not yet made it onto the national legislative agenda.

There are no measures to prevent or impede companies from transmitting customer or business-related data outside the country. There are no performance requirements. Investment incentives are applied uniformly to domestic and foreign investors on a case-by-case basis.

There is no requirement for foreign IT providers to turn over source code and/or provide access to encryption. There are no measures or draft measures that restrict companies from freely transmitting customer or other business-related data outside the economy/country’s territory.

The Aliens Landholding Regulation Act No. 29 of 1968 (last amended in 2009) is the primary legislative instrument governing the right to private ownership by non-citizens. Investors may purchase or lease privately owned land and dispose of, or transfer, interests in the land under the Act. Investors may hold state lands by grant or lease from the state.

Property rights and interests are enforced under the Aliens Landholding Regulation Act. The only specific regulation regarding land lease or acquisition by a foreign or non-resident investor is the requirement to acquire an Alien Landholding License. The application process is described on the following website: http://grenadaidc.com/investor-centre/investors-guide/starting-up-a-business/#.WLBEUvnQe70 

Before a deed is issued, there is a title search on the previous owner, followed by conveyance, and the registering of the property to a new owner. A clear title must first be identified before the process moves forward. Once the landholder possesses a deed, the property remains legally theirs, occupied or not, until the deed is signed over to someone else.

Grenada ranked 147 out of 190 for the ease of registering property on the World Bank’s 2019 Doing Business Report, which provides the latest statistics available.

The Patents Act (Cap. 227 of the Consolidated Laws of Grenada) or the Trademarks Act (Cap. 284 of the Consolidated Laws of Grenada), or the Copyright Act Cap. 32 of 1988 (Cap. 67 of the Consolidated Laws of Grenada) guarantees the intellectual property rights of investors and investment enterprises e.g., patents, trademarks, brand names, and copyrighted materials in printed, recorded, or electronic formats. Grenada is a member of the World Intellectual Property Organization (WIPO), the Paris Convention, the Berne Convention, and the Patent Cooperation Treaty. In April 2021 the Organization of Eastern Caribbean States, of which Grenada is a member, signed a MOU with the WIPO. This will help strengthen the regional legal and regulatory architecture necessary to support the protection and monetization of intangible assets and other forms of intellectual property in the region.

Domestic legislation regarding intellectual property protection has not been fully amended to bring it in line with the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement. However, updates to existing legislation are currently being drafted and reviewed.

Trademarks

Trademarks are regulated by the Trademarks Act of 2012.

Patents

The Registration of United Kingdom Patents Act Cap 283 of the Continuous Revised Laws of Grenada is still in force, although outdated. In accordance with the act, any person being the grantee of a patent in the United Kingdom or any person deriving right from such grantee may apply within three years from the date of issue of the patent in in the UK to have it registered in Grenada.

The Patent Act Cap 227 of the Continuous Revised Laws of Grenada is not TRIPS compliant. Implementation of the Patent Act No. 16 of 2011 has been slow due to the lack of implementing regulations, but the government has indicated that this a priority.

Copyright

The Copyright Act No. 21 of 2011 is in force.  In accordance with the Berne Convention, there is no existing formal system of registration of copyrighted works. There are current discussions with WIPO, in conjunction with the intellectual property offices in the region, to consider a voluntary system of registration for copyrighted works.

Geographic Indication Bill

The geographic indication bills have been drafted but not yet enacted. The 2012 Trademarks Act provides for registration of collective marks in the absence of a geographic indication act.

Industrial Designs Bill

The Industrial Design Bill is a work in progress. According to the Office of Corporate Affairs, its enactment is a priority.

Administration of intellectual property laws in Grenada is the responsibility of the Ministry of Legal Affairs. The Corporate Affairs and Intellectual Property Office (CAIPO) is currently responsible for the registration of trademarks, re-registration of UK patents, and all other IP matters.

Post is unaware of any current or past prosecutions of IPR violations. Grenada is not listed in USTR’s Special 301 report or in the 2020 notorious market report.

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

Grenada possesses a robust legislative and policy framework that facilitates the free flow of financial resources. Its currency, the Eastern Caribbean dollar, has a fixed exchange rate established by the regional Eastern Caribbean Central Bank (ECCB). Foreign employees of investment enterprises and their families may repatriate their earnings after paying personal income tax and all other taxes due. The government of Grenada encourages foreign investors to seek investment capital from financial institutions chartered outside Grenada due to the short domestic supply of capital. Foreign investors are more likely to tap local financial markets for working capital. The government, local banks, and the ECCB respect IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions.

The private sector has access to the limited number of credit instruments. Grenadian stocks are traded on the Eastern Caribbean Securities Exchange, whose limited liquidity may pose difficulties in conducting transactions.

The financial industry in Grenada is regulated by two entities: The ECCB and the Grenada Authority for Regulation of the Financial Industry (GARFIN). The ECCB regulates the banking system. GARFIN oversees non-banking financial institutions through a regulatory system that encourages and facilitates portfolio investment. The estimated total assets of the largest banks are USD $1.03 billion. Information on the percentage of non-performing assets is not available. Grenada has not experienced cross-shareholding or hostile takeovers. As of November 30, 2020, commercial banks in Grenada deferred debt service on 4,069 commercial bank loans due to job losses and a reduction in salaries caused by the COVID-19 pandemic. This was the second highest number of deferrals in the Eastern Caribbean Currency Union (ECCU).

Foreign banks or branches can establish operations in Grenada subject to prudential measures and regulations governed by the ECCB. For the requirements and procedures, foreign banks can refer to the following website: https://www.eccb-centralbank.org/p/grenada-1 

There is correspondent banking available with all licensed commercial banks. No correspondent banking relationships have been lost in the past three years. There are no restrictions on a foreigner’s ability to establish a bank account.

In addition to the banking sector, there are alternative financial services provided through credit unions. GARFIN regulates credit unions.

Grenada does not have a sovereign wealth fund.

Grenadian state-owned enterprises (SOEs) are legislatively established by acts of Parliament. These enterprises all have boards of directors appointed by the government and answerable to the relevant ministries. Twenty-five of the 28 authorized SOEs are operational. They secure credit on commercial terms from commercial banks. SOEs submit annual reports to the Government Audit Department and are subject to audits shared with their parent ministries. SOEs manage transportation infrastructure (ports and airports), housing, education, hospitals, cement production, investment promotion, and small business development, among other functions. Generally, where they compete with the private sector, they do so on an equal basis.

Grenada, like its neighbors, acknowledges the OECD guidelines. Corporate governance of SOEs is established and regulated by founding statutes. Local courts show no favoritism toward SOEs in the adjudication of investment disputes.

For additional information on SOEs in Grenada see:http://www.oecd.org/countries/grenada/

Grenada does not have a privatization program.

Corporate social responsibility (CSR), interchangeably used with responsible business conduct, is a concept that was introduced to Grenada relatively recently by multinational and regional corporations. Local businesses are slowly incorporating this principle into their operations.

Some social responsibility initiatives undertaken by the private sector and non-governmental organizations include education programs, fitness programs, sporting activities, and cultural endeavors. These are predominantly implemented by the telecommunication companies Digicel and LIME, along with financial institutions. There is also a recent push towards environmentally friendly business practices and development projects.

While firms that promote CSR are more favorably viewed by the community, there is little familiarity with international CSR standards. Activities are deemed to be responsible business conduct if they are lawful, not a threat to national security, and not detrimental to the environment, health, and culture of the Grenadian people. Other than this being a requirement for any company operating in Grenada, CSR is not built into the laws governing the operations of a company.

There has been no high profile, controversial instances of private sector impact on human rights or resolution of such cases in the recent past. Grenada generally enforces domestic laws in relation to human rights, labor rights, consumer protection, environmental protection, and other laws/regulations intended to protect individuals from adverse business impacts. Local labor unions play a role in promoting and monitoring responsible business conduct. Grenada uses private security companies but is not a signatory to The Montreux Document or the International Code of Conduct or Private Security Service Providers.

There are no alleged/reported human or labor rights concerns relating to responsible business conduct, that foreign businesses should be aware of, and neither has there been claims in the last five years by indigenous or other communities that a government entity improperly allocated land or natural resources, or arrests of and/or violence against environmental defenders.

Climate adaptation and resilience is a priority for the government of Grenada. Climate Change priority focus areas for adaptation are driven by Grenada’s Climate Change Policy, Grenada’s National Adaptation Plan (NAP) 2017-2021 and Integrated Coastal Zone Management Policy. The NAP will be updated in 2022. Priorities for climate mitigation are identified in the 2020 Grenada Nationally Determined Contributions (NDCs), which is available at the Government of Grenada Climate Finance Portal: https://climatefinance.gov.gd/ . Climate adaptation priorities for the government of Grenada include:

• Ecosystem Resilience, Ecosystem Based Adaptation (NAP page 43-48) is one focus area with emphasis on protected area management and ecosystem-based adaptation approaches.
• Integrated Coastal Zone Management (NAP page 49-52), with emphasis on the development of management plans to implement the recently passed Integrated Coastal Zone Act (2019).
• Monitoring, reporting and verification for reporting to the UN Framework Convention on Climate Change.
• Vulnerability and risk assessment of adaptation sectors/ program areas e.g., Tourism and Fisheries.
• Infrastructure resilience to slow onset events and Disaster Risk Reduction.
• Water resilience with emphasis on watershed resilience.
• Climate proofing human health.
• Implementation of Grenada’s NDCs.
• Synergizing reporting to address the three Rio conventions and the UN Sustainable Development Goals.
• Integrating Gender considerations into climate resilience action across program areas in the NAP and NDCs.
• Accessing climate finance and supporting community led resilience action.

There are several challenges affecting climate resilience in Grenada. These include coastal erosion, flooding of low-lying areas, saltwater intrusion into fresh-water wells, limited capacity to access finance among non-governmental actors, and data capture and analysis challenges for policy decision making and reporting obligations. Environmental challenges to climate resilience include climate change impacts on the environment, alien invasive species, over exploitation of natural capital, and pollution.

Grenada is aggressively pursuing its commitment through its revised NDCs to reduce its emissions by 40 percent of its pre-2010 level by the year 2030. With the electricity and transportation sectors accounting for over 70 percent of Grenada’s carbon footprint, government is striving to reach 100 percent of electricity generation through renewable energy, and 20 percent of vehicles being powered by renewable energy sources by the 2030 deadline. Grenada’s new climate change adaptation strategy will not only address policy issues, but also the development of more resilient physical infrastructure. The climate change adaptation strategy will also speak to the designation of marine protected areas, sustainable forest management, and ecosystem management plans in an effort to achieve the 2030 outcomes.

Grenada is a party to the Inter-American Convention against Corruption. The Integrity in Public Life Act (Act No.24 of 2013) requires that all public servants report their income and assets to the independent Integrity Commission for review. The Integrity in Public Life Commission monitors and verifies disclosures, although disclosures are not made public except in court. Failure to file a disclosure should be noted in the Official Gazette. If the office holder in question fails to file in response to this notification, the commission can seek a court order to enforce compliance.

The Office of the Ombudsman received 29 complaints in 2020, compared to 59 in 2019 and 64 in 2018. Of the 29 complaints, one was closed, 12 are ongoing, 7 received advice/referrals, and 9 were outside the jurisdiction of the ombudsman. Private entities received the highest number of complaints totaling 9, followed by the Ministry of Labor with 6. Of the 9 complaints, advice/referrals were given to 3, and 6 were beyond the jurisdiction of the Ombudsman. Of the 6 complaints against the Ministry of Labor, 3 are ongoing, 2 received advice/referrals and1 was beyond the jurisdiction of the Ombudsman.

Bribery is illegal in Grenada. For the most part, the enforcement of anti-bribery laws and procedures is effective and non-discriminatory.

Grenada is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The country accepted and acknowledged the UN Convention against Corruption but has not yet signed or ratified it.

U.S. firms have not identified corruption as an obstacle to FDI in Grenada.

Sheldon Thomas
Assistant Superintendent of Police/Head of FIUFinancial Intelligence Unit (FIU)
The Carenage, St. George’s, Grenada
(473) 435-2373 / 2374
gdafiu@fiu.gov.gd 

Ronnie Marryshow
Ombudsman
Office of the Ombudsman
Tanteen, St. George’s, Grenada
(473) 435-9315
ombudsmangd@spiceisle.com 

Contact at “watchdog” organization:

Lady Anande Trotman-Joseph
Chairperson Office of the Integrity Commission
Archibald Avenue, St. George’s, Grenada
(473) 439-9212/ 534-5190
office@grenadaintegritycommission.org 

Grenada has a stable parliamentary representative democracy free from political violence. There have been no examples over the past ten years of damage to projects and/or installations.

Grenada signed and ratified all the International Labor Organization’s (ILO) recommendations and enshrined these rights into its labor laws, including the Labor Relations Act No.1 of 1999 and the Employment Act No. 1 of 1999. Grenadian law protects the right of workers to be represented by a trade union of their choice.

Employers are generally expected to recognize a union that represents most workers but are not obligated to recognize a minority union if most of the workforce does not belong to said union. In accordance with the Trade Union Recognition Act No 29 of 1979, investors shall grant union representation at any site of employment if most employees indicate the desire for union representation. Investment enterprises are also required to contribute to the social insurance and welfare programs for their workers in accordance with the National Insurance Act.

The Ministry of Labor may refer disputes regarding workers in essential services to compulsory arbitration. Essential services include employees of utility companies, public health, and protection sectors, including sanitation, airport, seaport, and dock services.

Grenada does not restrict the legal activities of trade unions. Most of the workforce is unionized, and labor relations are generally stable.

Article 32 of the Employment Act prohibits employment of children under the age of 16 except for temporary holiday employment. Part 7 of the Employment Act provides for the protection and regulation of wages, and article 52 mandates the minimum wage. Minimum wage schedules are set by occupation. In the second quarter of 2020, the unemployment rate was 28.4 percent compared to 15.1 percent during the fourth quarter of 2019. In 2020, more than 14,000 jobs were lost from a labor force of approximately 50,000 due to the global COVID-19 pandemic and its impact on the tourism sector.

There have been strikes in the past year, but none posed an investment risk, and negotiations toward a satisfactory resolution continue. There are no gaps in compliance in law or practice with international labor standards that may pose a reputational risk to investors. No potential gaps were identified in law or in practice with international standards by the ILO.

No new labor-related laws or regulations were enacted during the last year, and no bills are pending.

The government does not legally define the informal sector and there is no data on the number or percentage of persons in this sector. Street vendors, agricultural workers, farmers, construction workers, and domestic workers are often considered small/micro businesses and were protected by wage, hour, and occupational safety and health laws.

Breanna L Green
Deputy Political and Economic Counselor, U.S. Embassy Grenada
Tel: (246) 227-4000
Email: GreenB2@state.gov 

Rachér Croney
Political & Economic Specialist
Tel: (473) 444-1173
Email: croneyrr@state.gov 

Contacts for Investment-Related Inquiries:

Ronald Theodore
CEO, Grenada Investment Development Corporation
Tel: (473) 444-1035
Email: Invest@grenadaidc.com or rtheodore@grenadaidc.com
Website: www.grenadaidc.com 

Cathyann Alexander-Pierre
Senior Specialist, Investment Promotion Agency
Grenada Investment Development Corporation
Tel: (473) 444-1033-35, Ext.-236
Email: calexander@grenadaidc.com 

The GoG recognizes foreign direct investment (FDI) as critical for growing and diversifying the Guyanese economy. Guyanese law does not discriminate against foreign investors. The GoG has prioritized investments in the following sectors: agriculture, agro-processing, light manufacturing, renewable energy, tourism and information and communications technology (ICT). The Guyana Office for Investment (GO-INVEST) is the GoG’s primary vehicle for promoting FDI opportunities and assisting foreign corporations with their business registrations and applying for tax concessions. Companies and investors are encouraged to do their due diligence and have robust business plans completed before approaching GOINVEST. The GoG passed the Local Content Act (LCA) on December 31, 2021, which establishes baseline requirements for foreign and local firms operating in the country’s oil and gas sector to hire Guyanese and source local materials. The legislation lists local quotas for 40 business services and material inputs, which must come from Guyanese businesses. The targets range from near total local sourcing (90 to 100 percent) for services like ground transportation of personnel, local accounting and legal services, and pest control services to lower levels (between 5 to 25 percent) for more technical items like dredging services, engineering and machining, borehole testing, environmental services and studies, and aviation support services.  The GoG plans to expand this initial list of services and materials as local capacity increases, in which case foreign firms may have to enter into partnerships with local firms to comply with the LCA. Some local firms involved in joint ventures or subcontract relationships with foreign companies have expressed concerns about unclear requirements or the suggestion of new or revised tenders by the Local Content Secretariat, which could delay their operations and create conditions for undue influence and rent seeking behavior.

Guyana’s constitution protects the rights of foreigners to own property in Guyana. Foreign and domestic firms possess the right to establish and own business enterprises and engage in all forms of commerce, except for some oil and gas services which are now legally protected under the LCA. Private entities are governed by the 1991 Companies Act (amended in 1995) under which they have the right to establish business enterprises and are free to acquire or dispose of interest in accordance with the law. Some key sectors like oil and gas, aviation, forestry, banking, mining, and tourism are heavily regulated and require special licensing and may have limits on foreign ownership. The process to obtain licenses can be time consuming and may in some instances require ministerial approval.

The LCA significantly increased the ownership criteria for a company operating in, or servicing the oil sector, to be considered Guyanese as: Guyanese nationals having at least 51 percent voting rights, holding at least 75 percent of executive and senior management positions within the company, and at least 90 percent non-managerial staff positions. As of April 2022, these limits on foreign control and ownership only apply to the initial schedule of local companies outlined in the 2021 LCA.

The GoG also prohibits foreign ownership of small-and-medium-scale mining (ASM) 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. However, 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, the Guyana Geology and Mines Commission (GGMC), offers little recourse for ASM disputes. The U.S. Embassy strongly encourages investors to thoroughly conduct their due diligence when exploring business opportunities.

The GoG maintains an investment screening mechanism through GOINVEST. Under this mechanism, investment agreements are prepared by GOINVEST, followed by a review by the Guyana Revenue Authority (GRA), and approval by the Minister of Finance ultimately approves the investment agreement, pending approval by the GRA. Industry specific investments can be subject to approval by the relevant ministries, like the recently established Local Content Secretariat within the Ministry of Natural Resources, which now approves all oil and gas related business operations.

Government policy focuses on attracting inward FDI. The GoG applies national treatment to all economic activities, except for certain oil and gas and mining operations. The World Trade Organization (WTO) published its most recent trade policy review of Guyana on March 2, 2022, in which it encouraged the GoG to invest in infrastructure and human capital development and reduce its dependence on fossil fuels. The most recent report reiterated prior recommendations for the GoG to increase transparency in government procurement and modernize of the government’s treatment of intellectual property rights.

World Trade Organization is available at the following link: https://www.wto.org/english/tratop_e/tpr_e/tp522_crc_e.htm 

President Irfaan Ali’s administration has emphasized its desire to diversify Guyana’s economy and expand business ties with the United States, Europe, the Middle East, and others. The GoG created a Diaspora Affairs Unit within the Ministry of Foreign Affairs and International Cooperation to encourage business ties with the Guyanese diaspora, especially the U.S. based diaspora. All companies operating in Guyana must physically register with the Registrar of Companies, there is no online platform. 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. Depending on the type of business, registration may take three weeks or more. Newly registered businesses are encouraged to immediately apply for a tax identification number (TIN) from the GRA. If a company employs Guyanese workers, the company must demonstrate compliance with the National Insurance Scheme (social security). Businesses in the sectors requiring specific licenses, such as oil and gas, mining, telecommunications, forestry, and banking must obtain operation licenses from the relevant authorities before commencing operations. Guyana has six municipal authorities which also assess municipal taxes: Anna Regina, Corriverton, Georgetown, Linden, New Amsterdam, and Rosehall.

GOINVEST 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 foreign and domestic private 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.

Resources

Guyana Deeds and Commercial Registry: https://dcra.gov.gy/
GO-INVEST: https://goinvest.gov.gy/
Guyana Revenue Authority: https://www.gra.gov.gy/ 

While the GoG is focused on attracting inward investment into Guyana, there are no restrictions for domestic investors to invest abroad. GOINVEST supports Guyanese investors and exporters looking to operate overseas.  In 2021, Guyana repealed and replaced its existing sovereign wealth fund legislation, the Natural Resource Fund Act. The passage of the revised NRF, along with the appointment of a board of directors, paves the way for the GoG to invest a portion of its oil revenues and royalties in global markets.

Legal, regulatory, and accounting systems are consistent with international norms. Guyana is a commonwealth nation and embraces the International Financial Reporting Standard (IFRS), under which all publicly traded companies are legally required to publish their annual reports. Guyana is a democratic country, whose constitution mandates the separation of the executive, legislative, and judicial branches of government.  In practice, however, many GoG processes are opaque and consistently cause confusion for investors and exporters. Regulations are developed through stakeholder consultations followed by parliamentary debate and eventual passage in Guyana’s National Assembly (parliament). While the GoG does not require companies to disclose environmental, social and governance (ESG) standards, it actively encourages ESG through investment policies and the LCDS. Guyana’s laws are publicly available on the Ministry of Legal Affairs website. Publicly listed companies’ finances and debt obligations are relatively transparent, but Guyana’s accounting and auditing firms are severely limited in their capacity to conduct thorough audits that comply with international best practices. Oversight mechanisms for public finances include the national assembly and the Auditor General Office.

As captured in the World Bank’s Doing Business Report, the GoG’s bureaucratic procedures are cumbersome, often involve multiple ministries that often have overlapping regulatory responsibilities. 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, most decision-making remains centralized. An extraordinary number of issues continue to be resolved in the presidential cabinet, a process that is perceived by many – especially new investors or bidders – as opaque and slow.

Resources

Ministry of Legal Affairs: https://mola.gov.gy/laws-of-guyana

Guyana has been a World Trade Organization (WTO) member since 1995 and adheres to Trade-Related Investment Measures (TRIMs) guidelines. Guyana is also a member of the Caribbean Community (CARICOM) and is working to harmonize its regulatory systems with the rest of the CARICOM member states. Guyana is a member of the United Nations Framework Convention on Climate Change (UNFCCC) and the reducing emissions from deforestation and forest degradation (REDD+) initiative.

Guyana has laws on intellectual property rights and patents. However, a lack of enforcement offers few protections in practice and allows for the relatively uninhibited distribution and sale of illegally obtained content.

Guyana’s legal system combines civil and common laws. Guyana’s judicial system operates independently from the executive branch. The Caribbean Court of Justice, located in Trinidad and Tobago, is Guyana’s highest court. Registered companies are governed by the Companies Act and contracts are enforced by Guyanese courts or through a mediator. Guyana has a commercial court in its High Court, which has both original and appellate jurisdiction.

Legislation exists in Guyana to support foreign direct investment, but the enforcement of these regulations continues to be inadequate. The objective of the Investment Act of 2004 and Industries and Aid and Encouragement Act of 1951 is 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.” Most recently the 2021 Local Content Act mandates certain levels of Guyanese participation (in the form of workforce, company ownership, and sourcing of materials) in the oil and gas sector. Companies should direct their inquiries about regulations on FDI to GOINVEST.

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. Guyana’s local content legislation was passed on December 30, 2022. The legislation ringfences 40 business lines for Guyanese businesses within the oil and gas industry.

The Competition Commission of Guyana was established under the 2006 Competition and Fair-Trading Act. The Competition and Fair-Trading act seek to promote, maintain, and encourage competition; to prohibit the prevention, restriction, or distortion of competition, the abuse of dominant trade positions; 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. For mergers and acquisitions within of the banking sector, the Bank of Guyana has ultimate oversight and approval.

The government can expropriate property in the public interest under the 2001 Acquisition of Land for Public Purposes Act, although there are no recent cases of expropriation. Adequate legislation exists to promote and protect foreign investment. However, enforcement is often ineffective. Many reports view Guyana’s judicial system as being slow and ineffective in enforcing legal contracts. All companies are encouraged to conduct due diligence and seek appropriate legal counsel for any potential questions prior to doing business in Guyana.

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 entered into force in December 2014.

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 is one ongoing investment dispute involving a U.S. telecommunications company, which previously held a legal monopoly in Guyana.

International arbitration decisions are enforceable under the 1931 Arbitration Act of British Guiana, 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 on average costs 27 percent of the value of the claim. 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 a Commercial Court 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. In practice, most business disputes are settled by mediation which avoids a lengthy court battle and keeps costs low to both parties. Guyanese state-owned enterprises are not widely involved in investor disputes. To date, there are no complaints on the court process relating to judgments involving state owned enterprises.

The 1998 Guyana Insolvency Act provides for the facilitation of insolvency proceedings.  The 2004 Financial Institutions Act 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% 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.

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 GOINVEST. The GoG utilizes investment incentives to advance its broader policy goals, such as boosting research and development, or spurring growth in a particular region. Guyana offers fiscal incentives for clean energy investments including value added tax (VAT) and import duty exemptions for renewable energy equipment, one off corporate tax holidays of two years, and a capital expenditure write off within two years. The GoG offers co-investing options for outlying regions.

Information on investment incentives in Guyana 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 

Guyana does not have free trade zones, however, the GoG is contemplating establishing free trade zones in Lethem, a Guyanese town on the Brazilian border that relies heavily on cross border commerce.

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

There are no data localization requirements in Guyana requiring foreign investors to establish or maintain a certain amount of data storage within the country. There is no visa requirement for U.S. citizens to visit Guyana. There are no government-imposed conditions to invest. However, if seeking tax concessions, an entity will be bound to an investment agreement.

A requirement to hire locally at least 80 percent of employees is applied equally to domestic and foreign investment projects. The GoG formalized this requirement in the oil and gas sector through with the passage of the LCA in 2021. While there are no concrete plans to expand the LCA model to other industries at this time, the GoG has expressed interest in protecting other industries from foreign competition.

Although no explicit government policy exits regarding performance requirements, 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. Foreign IT providers are not required to turn over source code and/or provide access to encryption.

There are no measures to prevent or restrict companies from transmitting customer or business data. The government agencies involved for local data storage include the National Data Management Authority and the Office of the Prime Minister.

Property rights are enforced but it is often time consuming to determine the rightful owner of a particular plot of land. Ownership of property can be unclear even among government entities and potential investors are encouraged to have a local lawyer review any potential property purchase before executing the deal.

Guyana has a dual registry system of property rights with distinct requirements, processes, and enforcement mechanisms.  The two types of registry systems are deeds (regulated by the Deeds and Commercial Registry) and title (regulated by the Land Registry) registries that operate in separate jurisdictions, which in theory helps avoid the problem of double entry and dual registration. However, the percentage of land in Guyana that lacks a clear land title is unknown and the lack of a digital registry with which to easily verify title further complicates the transfer of property rights. Companies often complain 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 as real estate and financial markets (especially primary ones, such as mortgage markets).  As previously stated, the judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The GoG is the country’s largest landowner. Property can be reverted to squatters who have squatted for over 10 years, but in most instances the GoG repossesses the land. Frustration arises when investors who have been leased land do not proceed with planned investments, so an ability to secure financing and move forward with projects is key.

Upon independence in 1966, Guyana adopted British law on intellectual property rights (IPR). Guyana’s relevant laws governing IPR are the 1956 Copyright Act and the 1973 Trademark Act and Patents and Design Act.  Local contacts report that numerous attempts to pass comprehensive reforms to this legislation have been unsuccessful. However, piecemeal modernization amendments contained in the 2005 Geographic Indication Act, the 2006 Competition and Fair-Trading Act, the 2000 Business Names Registration Act, and the 1999 Deeds Registry Authority Act have offered additional protection to local products and companies.  In the past year, there was no new IP laws enacted.

No modern legislation exists to protect the foreign-registered rights of investors. However, investors are encouraged to seek a lawyer to register and/or make an application for intellectual property. In the case of trademarks, registration is done through writing to the registrar, which once accepted after advertisement in the official gazette, the registrar inserts the particulars and issues a registration bearing the seal of the patent office. Guyana joined the World Intellectual Property Organization (WIPO) and acceded to the Berne and Paris Conventions in 1994. Guyana has not ratified a bilateral intellectual property rights agreement with the United States. The previous government drafted intellectual property rights legislation which has yet to be taken up in Parliament.

Many businesses report that the 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. Guyana has seen seizures of counterfeited food items by the Guyana Foods and Drugs Analyst Department (GFDD). However, the GFDD is severely short staffed and unable to police all commerce effectively. Local news media sources report 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.  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/.

Guyana is not mentioned in the United States Trade Representative’s 2021 Special 301 Report, nor is it named in its 2020 Review of Notorious Markets for Counterfeiting and Piracy.

The GoG is indifferent to foreign portfolio investment. Guyana has its own stock market, which is supervised by the Guyana Association of Securities Companies and Intermediaries (GASCI).  GASCI is a self- regulated organization. Dividends earned from the local stock exchange are tax free. Guyana’s stock market outpaced GDP growth in 2021 with a 46.1 percent increase in its market capitalization.  Despite growing interest in the local stock market, however, Guyana has not seen a new company listed for over a decade. Foreign investors can access credit on the local market if they satisfy local banking requirements. Credit is allocated based on risk profile and creditworthiness. Credit is available on market terms. The private sector has access to credit instruments though limited on the local market. The Central Bank respects IMF Article VIII with regard to payments and transfers for international transactions.

Guyana relies heavily on cash payments for most financial transactions, but credit cards and mobile payment options are increasingly common. The GoG’s 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 financial sector is regulated by the Bank of Guyana (BOG), the country’s central bank.  The BOG is empowered under the 1995 Financial Institutions Act and the Bank of Guyana Act to regulate the financial sector.  Under these regulations a bank operating in Guyana must maintain high levels of liquidity and a strong deposit and asset base. Approval from the BOG is required before operating in Guyana.

The BoG regularly performs stress tests to determine the vulnerability of licensed depository financial institutions (LDFIs). Guyanese LDFI’s ratio of reserves against non-performing loans increased by 1.9 percentage points to 37.2 percent as of mid-year 2021. Guyana’s banking system remains adequate with capital adequacy ratios (CAR) well above the prudential benchmark of 8 percent. Guyana’s banking stability index improved from 0.15 to 0.38 at the end of June 2021, reflecting improved performances in asset quality, profitability, and liquidity indicators. Non–bank financial institutions’ total assets, which includes depository and non-depository licenses and unlicensed financial institutions, grew by 8 percent.

Guyana has six commercial banks.  Foreign banks can provide domestic services or enter the market with a license from the BoG.  There are no restrictions on a foreigner’s ability to establish a bank account. The GoG recognizes a need to improve access to finance for both the private sector and private citizens, with the current financial institutions seen as slow, overly cautious, and full of bureaucratic red tape.

Guyana established a sovereign wealth fund, the Natural Resource Fund (NRF), in 2019, with the passage of the 2019 Natural Resources Act. While the NRF broadly conformed to the Santiago principles, President Irfaan Ali’s administration vowed to repeal and replace the 2019 NRF with a version that decentralized control over the fund and established a simpler withdrawal schedule. In December 2021, the Ali administration used its veto proof majority in parliament to unilaterally repeal and replace the existing law with the NRF 2021. While the revised law includes some improvements, like the creation of a board of directors and more intuitive withdraw schedule, it still affords the President broad reaching powers to appoint all the NRF’s key leadership positions, provides few limits on the investment or usage of the fund, and while a former member of the opposition was proposed for the board, the current opposition’s nominees were not accepted by the government. This prompted more concerns about transparent management of the fund moving forward. As of January 2022, the NRF holds $607.5 million, which under the revised law the GoG will be able to withdraw in its entirety in the coming year to meet 2022 budget allocations.

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 experience political interventions, driven by boards of directors filled with political appointees. Procurement on behalf of SOEs may be passed through the National Procurement and Tender Administration or handled directly by the SOE.

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.

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

• Combining the functions of the Public Corporations Secretariat (PCS) and the National Industrial & Commercial Investments Limited (NICIL);
• Preparing for the program strategy and annual program targets for privatization or liquidation Cabinet’s approval;
• Implementing the privatization of SOEs and assets selected for inclusion in the program;
• Participating in negotiations for the privatization of SOEs;
• Reviewing offers and making 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 program is strictly respected and followed;
• Monitoring operations of privatized 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 equal access to privatization opportunities. However, there are many reports that the process is opaque and favors politically connected local businesses. Currently, the GoG is interested in privatizing at least a portion of GUYSUCO.

U.S. firms are generally given equal access to these projects through a public bidding process. However, many bidders continue to complain about the criteria and question their unsuccessful attempt at securing a contract.  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.

Compared to responsible business conduct (RBC) norms in North America and Europe, Guyana-based businesses lag in adopting RBC policies and activities. However, there is increasing awareness of expectations for responsible business conduct. Guyana does not have a policy to encourage RBC. Most companies conform to their business responsibilities outlined by the Organization for Economic Co-operation and Development (OECD), including human rights and labor rights, information disclosure, environment, bribery, consumer interests, science and technology, competition, and taxation. Guyana’s laws align with the guidelines for RBC by the OECD. Despite these improvements, Guyana has human rights concerns, especially involving child labor in outlying regions and in the mining sector. The GoG enforces human rights laws but many report a lack of capacity to adequately enforce human and labor rights law

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 increasingly aware of RBC principles as the population becomes more 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.  Guyana joined the Extractive Industries Transparency Initiative (EITI) as a candidate country in October 2017.  Guyana is not a signatory of the Montreux Document.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Guyana’s Low Carbon Development Strategy 2030 (LCDS) is an executive branch led policy framework/roadmap for the country to maintain 99.5 percent of its largely intact forests, incentivize biodiversity conservation, invest in climate resilient infrastructure, and keep carbon emissions at 2019 levels while quintupling economic growth over the next 20 years. The impetus to establish the LCDS came from the GoG’s 2009 agreement with Norway to reduce emissions from deforestation and forest degradation (REDD+), which earned Guyana $250 million over ten years for reducing its annual deforestation rate from 0.12 to 0.05 percent. The latest version of the LCDS consists of four core objectives: accessing market-based mechanisms for Guyana’s forest carbon sequestration services, stimulate future growth through clean energy and sustainable economic activities, protect against climate change, and align with global climate goals. The LCDS contemplates active participation by the private sector but does not offer specific policies to incentivize their compliance. However, the GoG offers tax incentives and green loans for companies transitioning to clean energy sources. A market for tradeable permits, tax credits and pollution standards have yet to be developed and Guyana’s procurement policy does not include environmental and green growth considerations.

The law provides criminal penalties for corrupt practices by public officials. The relevant laws enacted include the Integrity Commission Act, State Assets Recovery Act, and the Audit Act. Notably, the Integrity Commission Board expired in February 2021, with no appointments made as of March 2022. Several media outlets reported on government corruption in recent years, and it remains a significant public concern.  Guyana has regulations to counter conflict of interests in the award of contracts. Media and civil society organizations continued to criticize the government for being slow to prosecute corruption cases.  The government passed legislation in 1997 that requires public officials to disclose their assets to an Integrity Commission prior to assuming office.  There are no significant compliance programs to detect bribery of government officials. Guyana’s Integrity Commission was re-constituted in February 2018 after a 12-year hiatus, but only collects reports of asset declarations and lacks any ability to investigate suspected irregularities, complaints, or issues. The Integrity Commission can only flag asst declarations for investigation by other authorities.

Widespread concerns remain about inefficiencies and corruption regarding the awarding of contracts, particularly with respect to concerns of collusion and non-transparency.  In his 2020 annual report, the Auditor General noted continuous disregard for the procedures, rules, and the laws that govern public procurement system.  There were reports of overpayments of contracts and procurement breaches.  Nevertheless, the country has made some improvements. According to Transparency International’s 2021 Corruption Perceptions Index (CPI), Guyana ranked 87 out of 180 countries for perceptions of corruption, falling 4 spots in comparison to 2020.

Companies interested in doing business in Guyana may contact a “watchdog” organization (international, regional, local nongovernmental organization operating in the country/economy that monitors corruption, such as Transparency International) for more information:

Transparency Institute of Guyana Inc.
157 Waterloo Street
Second Floor Private Sector Commission Building
North Cummingsburg
Georgetown
+592 231 9586
infotransparencygy@gmail.com 

Guyana has a high crime rate, and violence associated with drug and gold smuggling is on the rise. The country peacefully transitioned to a new government on August 2, 2020, after a 20 month-long extra-constitutional and electoral crisis, which saw few instances of politically incited violence. The GoG has committed to electoral reform in the wake of the 2020 electoral crisis to avoid future electoral impasses.

The security environment in the country continues to be a concern for many businesses. Businesses considering investing in Guyana are strongly encouraged to develop adequate security systems.

Guyana’s labor market is tightening due to high investments in the oil and gas sector. In 2017, the total population aged 15 and above residing in Guyana was 550,831. In the first quarter of 2021, the labor force participation rate was 51.1 percent. Unemployment stood at 15.1 percent in the first quarter of 2021. A concerning trend is an increase in youth unemployment, jumping from 30.2 percent in the first quarter 2020 to 31.4 percent in first quarter 2021. Guyana has witnessed an influx of Venezuelan migrants which predominantly work in mining areas and in the restaurant industry. The Ali implementation of LCA adds pressure on an already tight labor market by offering legal protections and incentives for Guyanese companies to service the oil and gas sector, further fueling the flight of labor and investment to the industry. Guyana has a national insurance scheme, but social safety net programs do not exist for the general population. Strikes are common in the sugar industry and may vary with the public sector during collective bargaining sessions. Guyana has a significant informal economy, accounting for a range of 30 and 50 percent of the job market, this is in part attributable to many Guyanese pursuing self-employment in unregulated jobs. In April 2022, GoG leadership suggested there was a labor shortage and they planned to draft a new migration policy.

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.  Guyana’s Human Development Index for 2020 increased to 0.67 from 0.682. Guyana’s literacy rate is estimated at 90%. There is an ongoing push for information and communications technology curriculum in Guyana’s schools to develop a talent pool for the industry.

Guyana has one of the highest emigration rates, 89 percent, in the world for nationals with a university degree. A significant number of businesses report 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 and capacity building opportunities for their employees.

The 1997 Trade Union Recognition Act 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 Labor Organization (ILO) Convention, protecting worker rights.  The public sector has a minimum monthly wage of approximately $350 while the private sector minimum wage is slightly lower at $300.

Brian Hall
Political and Economic Counselor

Benjamin Hulefeld
Economic and Commercial Officer

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

Haiti’s legislation encourages foreign direct investment. Import and export policies are non-discriminatory and are not based on nationality. Haitian and foreign investors have the same rights, privileges, and protections under the 1987 investment code. The Haitian government has made some progress in recent years to improve the legal framework, create and strengthen core public institutions, and enhance economic governance. The Haitian Central Bank continues to work with the International Monetary Fund (IMF) and the World Bank to implement measures aimed at creating a stable macroeconomic environment. The IMF concluded its most recent Article IV consultation (2019) with Haiti in January 2020. In April 2020, the IMF loaned Haiti $112 million through its rapid credit facility mechanism to provide liquidity to Haiti for expenditures to address COVID-19. Most recently, in August 2021, Haiti received an allocation of IMF’s Special Drawing Rights (SDR) equivalent to $224 million. While the IMF recommended using these funds to support COVID-19 measures and earthquake relief efforts, the IMF did not stipulate how these fuds were to be used.

While not discriminatory towards international investment specifically, the Haitian government’s economic policies fall short of providing a sound enabling environment for foreign direct investment. Despite the Haitian Central Bank’s periodic interventions in the foreign exchange market, the Haitian gourde continued to depreciate against the U.S. dollar. As of March 2022, the BRH benchmark rate has reached HTG/USD 104.7, having increased by 23.3 percent over the prior 12 months and the U.S. dollar banknotes remain scarce for businesses and regular citizens.

Despite passing anti-money laundering and anti-corruption laws to ensure that Haiti’s legislation corresponds with international standards, the government has not strictly followed the legal framework of these laws and has also failed to incentivize investment in Haiti. In early 2017, the Parliament enacted legislation making electronic signatures and electronic transactions legally binding. Other pieces of legislation that may improve Haiti’s investment climate remain pending, including incorporation procedures, a new mining code, and an insurance code. The Finance Ministry is implementing measures to improve revenue collection and control spending. The Ministry signed an agreement with Haiti’s Central Bank in November 2020 to strengthen fiscal discipline and limit government monetary financing. Despite these measures, monetary financing of the budget deficit over Fiscal Year (FY) 2021 has grown by 15 percent from FY2020 and stood at 15.8 billion gourdes (approximately $145 million) as of March 2022, six months into the fiscal year. The Center for the Facilitation of Investments (CFI), which operates under Haitian Ministry of Commerce oversight, was established to promote domestic and international investment opportunities in Haiti. In concept, the CFI could streamline the investment process by working with other government agencies to simplify procedures related to trade and investment; providing updated economic and commercial information to local and foreign investors; making proposals on investor incentives; and promoting investment in priority sectors. The CFI aims to offer tailored services to large international investors. In practice, the CFI has made limited progress to incentivize job creation and boost national production in agriculture, apparel assembly, and tourism. As examples, prior to the COVID-19 pandemic, Haiti’s Tourism Association reported a 60 percent loss of jobs in the sector in 2019. The apparel sector, the largest provider of jobs in the formal private sector, has reported great difficulties operating due to insecurity and recurring fuel shortages with adverse effect on contracts and employment.

The Haitian government does not impose discriminatory requirements on foreign investors. Haitian laws related to residency status and employment are reciprocal. Foreigners who are legal residents in Haiti and wish to engage in trade have, within the framework of laws and regulations, the same rights granted to Haitian citizens. However, Article 5 of the Decree on the Profession of Merchants reserves the function of manufacturer’s agent for Haitian nationals.

Foreign firms are also encouraged to participate in government-financed development projects. Performance requirements are not imposed on foreign firms as a condition for establishing or expanding an investment, unless indicated in a signed contract.

Foreign investors are permitted to own 100 percent of a company or subsidiary. As a Haitian entity, such companies enjoy all rights and privileges provided under the law. Additionally, foreign investors are permitted to operate businesses without equity-to-debt ratio requirements. Accounting law allows foreigners to capitalize using tangible and intangible assets in lieu of cash investments. Both Haitian and foreign investors enjoy the same rights and privileges. However, foreign investors residing in Haiti must obtain a residence permit and are expected to pay duties and taxes, in accordance with the scales and regulations applicable. Foreign investors are free to own real estate for the needs of their businesses and enjoy the same rights and prerogatives as Haitian investors. The reimbursement of debts contracted abroad for investments made in Haiti are not subject to any constraint or taxation.

Foreign investors are free to enter into joint ventures with Haitian citizens. The distribution of shares is a private matter between the two parties. However, the government regulates the sale and purchase of company shares. Investment in certain sectors, such as health and agriculture, requires special Haitian government authorization. Investment in “sensitive” sectors such as electricity, water, telecommunications, and mining require a Haitian government concession as well as authorization from the appropriate governmental agency. In general, natural resources are the property of the state, and the exploitation of mineral and energy resources requires concessions and permits from the Ministry of Public Works’ Bureau of Mining and Energy. Mining, prospecting, and operating permits may only be granted to companies established and resident in Haiti, and the establishment of new industrial mines cannot take place until an elected parliament passes an updated mining law, along the lines of a draft law initially presented in 2017.

Entrepreneurs are free to dispose of their properties and assets and to organize production and marketing activities in accordance with local laws.

Investors in Haiti can create the following types of businesses: sole proprietorship, limited or general partnership, joint-stock company, public company (corporation), subsidiary of a foreign company, and co-operative society. The most common business structures in Haiti are corporations. A draft law (Société de Droits law), which would facilitate the creation of other types of businesses in Haiti, such as LLCs, remains pending parliamentary approval when parliament is restored.

Haiti’s last investment policy review from the United Nations Conference on Trade and Development occurred in 2012. In general, Haiti’s political instability, weak institutions, and inconsistent economic policies impede the country’s ability to attract and direct foreign direct investment.

The World Trade Organization’s (WTO) 2015 Trade Policy Review stated that Haiti’s Investment Code and Law on Free Trade Zones is fully compliant with the Agreement on Trade-Related Investment Measures. The full report can be viewed at https://www.wto.org/english/tratop_e/tpr_e/tp427_e.htm .

While the Haitian government has made efforts to facilitate the launching and operating of businesses, the average time to start a business in Haiti is 189 days, according to the World Bank’s 2020 Ease of Doing Business Report. At present, it takes between 90 and 120 days to complete registration with the Commercial Registry at the Ministry of Commerce and obtain the authorization of operations (Droit de fonctionnement). The CFI also offers a service providing pre-registered and fully authorized companies in manufacturing, agribusiness, and real estate the opportunity to reduce their registration time. Once the Inter-Ministerial Investment Commission validates these established companies, the shares are transferred to the new owners.

Both foreign and domestic businesses can register at Haiti’s CFI: http://cfihaiti.com . All businesses must register with the Ministry of Commerce, the Haitian tax office, the state-owned Banque Nationale de Crédit, the social security office, and the retirement insurance office.

The Ministry of Commerce and Industry’s internet registry allows investors to search for and verify the existence of a business in Haiti. The registry will eventually provide online registration of companies through an electronic one-stop shop. In October 2020, CFI launched Spotlight, an initiative with the aim of promoting visibility of companies already established in Haiti and registered in the CFI database.

Neither the law nor the Haitian government restricts domestic investors from investing abroad. Still, Haiti’s outward investment is limited to a few enterprises with small investments. These investors are generally businesspersons with dual citizenship and others of Haitian origin who presently reside in the country in which their firms operate. The majority of these firms are service providers and not investment firms. There is no current program or incentive in place to encourage Haitian entrepreneurs to invest abroad.

Haitian laws are written to allow for transparency and to be applied universally. However, Haitian officials do not uniformly enforce these laws and the bureaucratic “red tape” in the Haitian legal system is often excessive.

Tax, labor, health, and safety laws and policies are also loosely enforced. The private sector often provides services, such as healthcare, to employees that are not entitled to coverage under Haitian government agencies or institutions. All regulatory processes are managed exclusively by the government and do not involve the private sector and non-governmental organizations.

Draft bills or regulations are available to the public through “Le Moniteur,” the official journal of the Haitian government, and information is sometimes made available online. Le Moniteur contains public agency rules, decrees, and public notices that Les Presses Nationales d’Haiti publishes.

According to the World Bank, Haitian ministries and regulatory agencies do not develop forward regulatory plans, nor do they publish proposed regulations prior to their adoption. Haitian law does not require a timeframe for public comment or review of proposed regulations.

Haiti is a member of the Caribbean Community (CARICOM), an organization of 15 states and dependencies established to promote regional economic integration. The CARICOM Single Market and Economy (CSME), created in 1989, aims to advance the region’s integration into the global economy by facilitating free trade in goods and services, and the free movement of labor and capital. CSME became operational in January 2006 in 12 of the 15 member states. Haiti, as a member of CARICOM, has expressed an interest in participating fully in CSME. However, to become eligible, Haiti must amend its customs code to align with CARICOM and WTO standards.

Haiti also adheres to the compulsory jurisdiction of the International Court of Justice on issues of international law, and of the Caribbean Court of Justice for the settlement of trade disputes within CARICOM.

Haiti is an original member of the WTO. As such, it has made several commitments to the WTO with regard to the financial services sector. These commitments include allowing foreign investment in financial services, such as retail, commercial, investment banking, and consulting. One foreign bank, Citibank, operates in Haiti. Haiti has committed to notifying the WTO Committee on Technical Barriers to Trade of all draft technical regulations. However, Haiti is not party to the Trade Facilitation Agreement.

As a former French colony, Haiti adopted the French civil law system. Judicial power is exercised by the Superior Magistrate Council, the courts of appeal, the courts of first instance, the courts of justice of the peace, and the courts of exception. Their operations, organization and competence are set by law. The Supreme Court, also known as the Superior Magistrate Council, is the highest court of the nation, followed in descending order by the Court of Appeals and the Court of First Instance. Haiti’s commercial code dates back to 1826 and underwent significant revisions in 1944. There are few commercial laws in place and there are no commercial courts. Injunctive relief is based upon penal sanctions rather than securing desirable civil action. Similarly, contracts to comply with certain obligations, such as commodities futures contracts, are not enforced. Haitian judges do not have specializations, and their knowledge of commercial law is limited. Utilizing Haitian courts to settle disputes is a lengthy process and cases can remain unresolved for years. Bonds to release assets frozen through litigation are unavailable. Business litigants often pursue out-of-court settlements.

Haiti’s legal system often presents challenges for U.S. citizens seeking to resolve legal disputes. In Haiti, judges are appointed for a set number of years. Public prosecutors are direct employees of the Ministry of Justice and can be transferred or suspended by the executive branch at any time. There are numerous allegations of undue political interference. Additionally, there are persistent claims that some Haitian officials use their public office to influence commercial dispute outcomes for personal gain. The Haitian government receives international assistance to increase the capacity of its oversight institutions and the capacity of the national police.

The Investment Code prohibits fiscal and legal discrimination against foreign investors. The code explicitly recognizes the crucial role of foreign direct investment in promoting economic growth. It also aims to facilitate, liberalize, and stimulate private investment, and contains exemptions to promote investments that enhance competitiveness in sectors deemed priorities, especially export-oriented sectors. Tax incentives, such as reductions on taxable income and tax exemptions, are designed to promote private investment. Additionally, the code grants Haitian and foreign investors the same rights, privileges, and equal protection. Foreign investors must be legally registered and pay appropriate local taxes and fees.

The code also established an Inter-Ministerial Investment Commission (CII) to examine investor eligibility for license exemptions as well as customs and tariff advantages. The Center for Facilitation of Investments (CFI) is the Technical Secretariat of the CII. The Prime Minister, or his delegate, chairs the CII, which is composed of representatives of the Ministries of Economy and Finance, Commerce, and Tourism, as well as those ministries that oversee specific areas of investment. The CII must authorize all business sales, transfers, mergers, partnerships, and fiscal exemptions within the scope of the code. The CII also manages the process of fining and sanctioning enterprises that disregard the code.

The following areas are often noted by businesses as challenging aspects of Haitian law: operation of the judicial system; publication of laws, regulations, and official notices; establishment of companies; land tenure and real property law and procedures; bank and credit operations; insurance and pension regulation; accounting standards; civil status documentation; customs law and administration; international trade and investment promotion; foreign investment regulations; and regulation of market concentration and competition. Although these deficiencies hinder business activities, they are not specifically aimed at foreign firms; rather, they appear to affect both foreign and local companies.

There is currently no law to regulate competition. Haiti is one of the most open economies in the region. The investment code provides the same rights, privileges, and equal protection to local and foreign investors. Anti-corruption legislation also criminalizes nepotism and the dissemination of inside information on public procurement processes. Haiti does not, however, have anti-trust legislation.

The 1987 Constitution allows expropriation or dispossession only for reasons of public interest or land reform and is subject to prior payment of fair compensation as determined by an expert. If the initial project for which the expropriation occurred is abandoned, the Constitution stipulates that the expropriation will be annulled, and the property returned to the original owner. The Constitution prohibits nationalization and confiscation of real and personal property for political purposes or reasons.

Title deeds are vague and often insecure. The Haitian government established the National Institute of Agrarian Reform to implement expropriations of private agricultural properties with appropriate compensation. The agrarian reform project, initiated under the Preval administration (1996-2001), was controversial among both Haitian and U.S. property owners. There have been complaints of non-compensation for the expropriation of property. Moreover, a revision of the land tenure code, intended to address issues related to the lack of access to land records, surveys, and property titles in Haiti, has been pending in parliament since 2014. A partnership between the private sector, Haitian government, and international organizations resulted in a guide on security land rights in Haiti, which was translated in 2016 and can be found here: https://www.land-links.org/wp-content/uploads/2019/09/Haiti-Land-Manual-2.pdf .

Haiti’s bankruptcy law was enacted in 1826 and modified in 1944. There are three phases of bankruptcy under Haitian law. In the first stage, payments cease to be made and bankruptcy is declared. In the second stage, a judgment of bankruptcy is rendered, which transfers the rights to administer assets from the debtor to the Director of the Haitian Tax Authority (Direction Generale des Impots). In this phase, assets are sealed, and the debtor is confined to debtor’s prison. In the last stage, the debtor’s assets are liquidated, and the debtor’s verified debts are paid prorated according to their right. The debtor is released from prison once the debtor’s verified debts are paid. In practice, the above measures are seldom applied. Since 1955, most bankruptcy cases have been settled between the parties.

The practice of mob looting remains a means for some to express their frustration with the country’s social inequities. Many companies went bankrupt after being attacked by violent protesters. Lack of insurance coverage and the complexity of compensation proceedings make it difficult for many to restart their businesses. The state does not have a court assessing the losses of businesses for state financial compensation for bodily or patrimonial damages. While the provisions of Article 356 of the Haitian Penal Code states perpetrators should be punished in hard labor in perpetuity, many of these crimes remained unsolved.

Although the concepts of real property mortgages and chattel mortgages – based on collateral of movable property, such as machinery, furniture, automobiles, or livestock to secure a mortgage – exist, real estate mortgages involve antiquated procedures and may fail to be recorded against the debtor or other creditors. Property is seldom purchased through a mortgage and secured debt is difficult to arrange or collect. Liens are virtually impossible to impose and using the judicial process for foreclosure is time consuming and often futile. Banks frequently require that loans be secured in U.S. dollars.

In order to attract investment to certain industries, the Investment Code privileges eligible firms with customs, tax, and other advantages. Investments that provide added value of at least 35 percent in the processing of local or imported raw materials are eligible for preferential status.

The statute, as modified by the FY2021 budget decree in October 2020, allows for a five-year income tax exemption. Industrial or crafts-related enterprises must meet one of the following criteria in order to benefit from this exemption:

• Make intensive and efficient use of available local resources (i.e., advanced processing of existing goods, recycling of recoverable materials);
• Increase national income;
• Create new jobs and/or upgrade the level of professional qualifications;
• Reinforce the balance of payments position and/or reduce the level of dependency of the national economy on imports;
• Introduce or extend new technology more appropriate to local conditions (i.e., utilize non-conventional sources of energy, use labor-intensive production);
• Create and/or intensify backward or forward linkages in the industrial sector;
• Promote export-oriented production;
• Substitute a new product for an imported product, if the new product presents a quality/price ratio deemed acceptable by the appropriate entity and comprises a total production cost of at least 60 percent of the value added in Haiti, including the cost of local inputs used in its production;
• Prepare, modify, assemble, or process imported raw materials or components for finished goods that will be re-exported;
• Utilize local inputs at a rate equal or superior to 35 percent of the production cost.

Companies that enjoy tax-exempt status are required to submit annual financial statements. Fines or withdrawal of tax advantages may be assessed to firms failing to meet the Code’s provisions. A progressive tax system applies to income, profits, and capital gains earned by individuals.

A law on Free Trade Zones (FTZ) was established in 2002. The law defines the conditions for operating and managing economic FTZs, with exemption and incentive regimes granted to investment in such zones. The law is not specific to a particular activity. Instead, it defines FTZs as geographical areas to which a special regime on customs duties and controls, taxation, immigration, capital investment, and foreign trade applies, and where domestic and foreign investors can provide services, import, store, produce, export, and re-export goods.

FTZs may be private or joint venture. The law provides the following incentives and benefits for enterprises located in FTZs:

• Full exemption from income tax for a maximum period of 15 years, followed by full taxation, per the FY2021 budget issued by decree in October 2020;
• Customs and tax exemptions for the import of capital goods and equipment needed to develop the area, with the exception of tourism vehicles;
• Exemption from all communal taxes (with the exception of proportional duties) for a period not exceeding 15 years;
• Registration and transfer of the balance due for all deeds relating to purchase, mortgages, and collateral.

Examples of functioning FTZs include one in the northeastern city of Ouanaminthe, where a Dominican company, Grupo M, manufactures clothing for a variety of U.S. companies at its CODEVI facility. Additionally, several U.S. apparel companies lease factory space in this free zone. All the factories at CODEVI combined employ over 18,200 workers as of September 2021.

In October 2012, the Haitian government, with the support of the Inter-American Development Bank and the United States government, opened the 617-acre Caracol Industrial Park in Haiti’s northeastern region. As of 2021, five companies are operating in the park: S&H Global, a South Korean company and the largest single private sector employer in Haiti; MAS Holdings, a Sri Lankan company; Everest, a Taiwanese factory; and two Haitian companies, Peintures Caraibes and Sisalco.

In 2015, three major FTZs were established: Agritrans, the first agricultural free trade zone in Haiti in Trou du Nord; Digneron, an entity of the Palm Apparel Group; and Lafito, a $150 million Panamax port and industrial park. Port Lafito, located 12 miles north of Port au Prince, includes port facility business services that cater to bulk and loose cargo imports, as well as terminal services to worldwide container service shipping lines.

In February 2021, the Government of Haiti authorized a new agro-industrial export free zone in the town of Savane-Diane (ZFAISD) in Artibonite Department, per the application of Haitian company Stevia Agro Industries S.A.

Foreign firms are encouraged to participate in government-financed development projects. However, performance requirements are not imposed on foreign firms as a condition for establishing or expanding an investment, unless indicated in a signed contract.

Under Haitian laws, foreign investors operate their businesses and use their assets to organize production freely. Companies are not forced to localize or to use local raw materials for the production of goods. Foreign information technology providers are not required to turn over source code or keys for encryption to any public agencies.

Foreign investors have noted that real property interests are affected by the absence of a comprehensive civil registry (cadastre). Lease agreement regulations are the same for locals and foreign investors. Many companies report that legitimate property titles are often non-existent and, if they do exist, they often conflict with other titles for the same property. Verification of property titles can take several months, and often much longer. Mortgages exist, but real estate mortgages are expensive and involve allegedly cumbersome procedures. Additionally, mortgages are not always properly recorded under the debtor or creditor’s name. Banks are also risk-averse to issue loans or mortgages. Squatting is not a common practice but was popular in the aftermath of the 2010 earthquake. As a factor in its overall Ease of Doing Business ranking, the World Bank ranks Haiti 182 out of 187 among countries globally on ease of registering property.

In Haiti, the measures to protect copyright date back to the 2005 decree of 9 January 1968 on the copyright of literary, scientific, and artistic works. Haitian law protects copyrights, patent rights, and inventions, as well as industrial designs and models, special manufacturers’ marks, trademarks, and business names. The law penalizes individuals or enterprises involved in infringement, fraud, or unfair competition; however, enforcement is weak. Some report that weak enforcement mechanisms, inefficient courts, and judges’ inadequate knowledge of commercial law may impede the effectiveness of statutory protections.

Haiti is a member of the World Intellectual Property Organization (WIPO). Haiti has completed accession to the Berne Convention for the Protection of Literary and Artistic Works and the Paris Convention for the Protection of Industrial Property. Haiti is a signatory to the Buenos Aires Convention of 1910, the Patent Law Treaty, and the Beijing Treaty on Audiovisual Performances.

Haiti is not mentioned in the United States Trade Representative (USTR) 2021 Special 301 Report or the 2021 Notorious Markets List. For additional information about the national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

The scale of financial services remains modest in Haiti. The banking sector is well capitalized and profitable. In principle, there are no limitations to foreigners’ access to the Haitian credit market, but limited credit is available through commercial banks. The free and efficient flow of capital, however, is hindered by Haitian accounting practices, which are below international standards. While there are no restrictions on foreign investment through mergers or acquisitions, there is no Haitian stock market, so there is no way for investors to purchase shares in a company outside of direct transactions. As summarized in the most recent (2020) IMF Article IV consultation for Haiti, however, the country has accepted the obligations of Article VIII and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions.

The standards that govern the Haitian legal, regulatory, and accounting systems do not comply with international norms. Haitian laws do not require external audits of domestic companies. Local firms calculate taxes, obtain credit or insurance, prepare for regulatory review, and assess real profit and loss. Accountants use basic accounting standards set by the Organization of Certified Professional Accountants in Haiti.

Administrative oversight in the banking sector is superior to oversight in other sectors. Under Haitian law, however, banks are not required to comply with internationally recognized accounting standards, and they are often not audited by internationally recognized accounting firms. Nevertheless, Haiti’s Central Bank requires that banks apply internal audit procedures. As part of their corporate governance all private banks also have in-house audit functions. Most private banks follow international accounting norms and use consolidated reporting principles. The Central Bank is generally viewed as one of the best-functioning Haitian government institutions.

While there are companies that issue shares and corporate bonds through financial intermediaries, these activities are often done in informal settings and through small groups in the primary market. The Central Bank is looking to expand the financial market in Haiti by creating two sub-committees for the development of financial markets and for the implementation of financial market infrastructure. Such platforms are expected to promote the mobilization and allocation of capital, long-term growth, and a solid legal, regulatory and institutional framework.

The banking sector has concentrated on credit for trade financing and in the expansion of bank branches to capture deposits and remittances. Telebanking has expanded access to banking services for Haitians. Foreign banks are free to establish operations in Haiti. Three major banking institutions (Unibank, Sogebank and Banque Nationale de Credit) hold roughly 81 percent, or 421.72 billion gourdes (approximately $3.9 billion), of total banking sector assets. With its acquisition of the Haitian operations of Scotiabank in 2017, Unibank became Haiti’s largest banking company, with a market share of 35 percent of deposits. As part of this deal, Scotiabank remains one of Unibank’s international correspondent banks. U.S.-based Citibank also has a correspondent banking relationship with Unibank. The bank also manages one of the only two privatization operations in Haiti, that of the flour mill “Les Moulins d’Haiti SEM” in which it is a partner of two U.S. companies: Continental Grain/Contigroup (New York) and Seaboard Corporation (Kansas City).

The three major commercial banks also hold 76 percent of the country’s total loan portfolio, while 70 percent of total loans are monopolized by 10 percent of borrowers. The concentration of holdings and limited number of borrowers increases the Haitian banking system’s vulnerability to systemic credit risk and restricts the availability of capital. The quality of loan portfolios in the banking system has slightly improved. Per the Haitian Central Bank, the ratio of nonperforming loans over total loans was 6.34 percent in December 2021, compared to 5.37 percent in December 2020. The Central Bank conducts regular inspections to ensure that financial institutions are in compliance with minimum capital requirements, asset quality, currency, and credit risk management.

The Central Bank’s main challenge is maintaining sound monetary policy in the context of a larger-than-expected government deficit and a depreciating local currency. The exchange rate suffers from continued pressure on the foreign exchange market. The Central Bank has made a series of interventions with the objective of supporting the value of the gourde by increasing the dollar supply in the foreign exchange market. Selling U.S. dollars in the foreign exchange market has also allowed the Central Bank to dry up the excess liquidity of the gourde in the market with the potential effect of tempering the inflation rate. Annual inflation accelerated to 25.2 percent as of February 2022, remaining on an upward trend since August 2021. As of the end of March 2022, Haiti’s stock of net international reserves was approximately $520 million.

There are no legal limitations on foreigners’ access to the domestic credit market. However, banks demand collateral of real property to grant loans. Given the lack of effective cadastral and civil registries, loan applicants face numerous challenges in obtaining credit. The banking sector is extremely conservative in its lending practices. Banks typically lend exclusively to their most trusted and credit-worthy clients. Based on a 2018 study by FinScope Haiti, only one percent of the adult population has access to a bank loan. The high concentration of assets does not allow for product innovation at major banks.

To provide greater access to financial services for individuals and prospective investors, the Haitian government’s banking laws recognize tangible movable property (such as portable machinery, furniture, and tangible personal property) as collateral for loans. These laws allow individuals to buy condominiums, and banks to accept personal property, such as cars, bank accounts, etc., as collateral for loans. USAID has a loan portfolio guarantee program with a diversified group of financial institutions to encourage them to expand credit to productive small and medium enterprises, and rural micro-enterprises. Haiti has a credit rating registry in effect for users of the banking sector but does not have the relevant legislation in place to establish a credit rating bureau.

Haiti’s Central Bank issued a series of monetary policy measures to alleviate the potential impact of COVID-19 on the financial system and the economy in March 2020. These measures included a reduction in the Central Bank’s policy rate to help lower interest rates on loans; the decrease of reserve requirement ratios to reduce the cost for banks to capture resources and grant loans; a reduction in the Central Bank’s refinancing rate to lower the cost of access to liquidity; the alleviation of loan repayment conditions for customers over a three-month period; the waiver of the Central Bank’s fees on interbank transfers to reduce transaction costs for customers; and the increase of limits on transactions through mobile payment services.

On July 2020, a decree was issued reorganizing the National Bank for Agricultural Development (BNDA). The bank is tasked with developing the agricultural sector through the financing of the entire value chain (production, breeding, processing, marketing, and equipment) through access to basic financial services for the greatest number of people, targeting those living in semi-urban and rural areas. The bank is installed in municipal agricultural offices, attached to the Ministry of Agriculture, Natural Resources and Rural Development (MARNDR). The bank is in partnership with the National Bank of Credit (BNC) with 63.8 million gourdes (approximately $584,623) in its portfolio and 700 million gourdes (approximately $6.4 million) out of a capital of 1 billion (approximately $9 million) planned for its launch. It uses its network for cash operations, such as disbursement and reimbursement.

The Haitian government published a decree dated August 2020 regulating micro-finance, with institutions granting small loans to entrepreneurs or retailers who operate according to the regulations of the Central Bank of Haiti. This decision is part of the framework of financial inclusion. Micro-finance institutions have access to the Central Bank programs and microcredits are more accessible to entrepreneurs and small traders than large financial corporations.

To date Haiti does not have a Sovereign Wealth Fund.

Per information released by the Central Bank in September 2018, since 2011 Haiti has levied a tax of $1.50 on all transfers into and out of the country, with the proceeds designated for the National Fund for Education. According to a Central Bank report in September 2019, more than $150 million has been collected since July 2011 on taxes from remittances from the diaspora.

Many Haitians mistrust the government because of high levels of corruption and criticize the government’s slow and ineffective response to natural disasters and social crises. Donors and critics have called for guarantees of oversight and accountability in the rebuilding process following the 2021 earthquake in the south.

The Haitian government owns and operates, either wholly or in part, several State-Owned Enterprises (SOE). The Haitian commercial code governs the operations of these SOEs. The sectors include food processing and packaging (a flourmill), construction and heavy equipment (a cement factory); information and communications (a telecommunications company); energy (the state electricity company, EDH); finance (two commercial banks, the Banque Nationale de Crédit and the Banque Populaire Haïtienne); and the national port authority and the airport authority. The law defines SOEs as autonomous enterprises that are legally authorized to be involved in commercial, financial, and industrial activities. All SOEs operate under the supervision of their respective sectorial ministry and are expected to create economic and social return. Today, some SOEs are fully owned by the state, while others are jointly owned commercial enterprises. The Haitian parliament, when it is functioning, has full authority to liquidate state enterprises that are underperforming. The majority of SOEs are financially sound. However, EDH receives substantial annual subsidies from the government to stay in business.

In response to the economic difficulties of the late 1990s and mismanagement of the SOEs, the government liberalized the market and allows foreign firms to invest in the management and/or ownership of some Haitian state-owned enterprises. To accompany the initiative, the government established the Commission for the Modernization of Public Enterprises in 1996 to facilitate the privatization process.

In 1998, two U.S. companies, Seaboard and Continental Grain, purchased shares of the state-owned flourmill. Each partner currently owns a third of the company, known today as Les Moulins d’Haiti. In 1999, a consortium of Colombian, Swiss, and Haitian investors purchased a majority stake in the national cement factory. In 2010, a state-owned Vietnamese corporation, Viettel, officially acquired 60 percent of the state telecommunications company Teleco (now operating as Natcom), with the Haitian government retaining 40 percent ownership. The government has allowed limited private sector investment in selected seaports. Competition is generally not distorted in favor of state-owned enterprises to the detriment of private companies.

The Haitian government has allowed private sector investment in electricity generation to compensate for EDH’s inability to generate sufficient power, though it has had contractual disputes with multiple independent power producers. Only one independent power producer, partially U.S.-owned E-Power, currently generates electricity for EDH in Port au Prince as of 2021. In 2019, the Haitian energy sector regulatory authority, ANARSE, issued a series of prequalification rounds for concessionaires to take over and expand electricity production, transmission, and distribution for several of the country’s regional grids, including the grid serving the Caracol Industrial Park. ANARSE launched a call for proposals for its “Improvement of Access to Electricity in Haiti” program. It aims to strengthen the regulatory and planning capacities of the electricity sector. ANARSE plans to establish a shortlist of firms or groups of firms for the development of a national plan for the development of the electricity sector. The plan will:

• Consult all stakeholders working in the energy sector to collect data;
• Collect and process the data collected and share the most relevant information with ANARSE and the Energy Cell of the Ministry of Public Works, Transport and Communications (MTPTC) in electronic format;
• Develop the national plan for the development of the electricity sector in Haiti over a period of 10 years;
• Organize public consultations; and
• Revise the development plan to take into account the comments made during the public consultations carried out to produce a complete and final version.

The Government of Haiti created the National Commission for Public Procurement (CNMP) to ensure that government contracts are awarded through competitive bidding and to establish effective procurement controls in public administration. The CNMP publishes lists of awarded government of Haiti contracts. The procurement law of 2009 requires contracts to be routed through CNMP. In 2012, however, a presidential decree substantially raised the threshold at which public procurements must be managed by the CNMP, resulting in what companies have identified as a decrease in transparency for many smaller government contracts. Moreover, the government frequently enters into no-bid contracts, sometimes issued using “emergency” authority derived from natural disasters, even when there is no apparent connection between the alleged emergency and the government contract, according to foreign investors.

Awareness of responsible business conduct among producers and consumers is limited but growing, including corporate social responsibility (CSR) activities. Irish-owned telecommunications company Digicel, for example, sponsors an Entrepreneur of the Year program and has built 120 schools in Haiti. Natcom provides free internet service to several public schools throughout the country. Les Moulins d’Haiti, partially owned by U.S. firm Seaboard Marine, provides some services, including electrical power, to surrounding communities. In the aftermath of the 2010 earthquake, many firms provided logistical or financial support to humanitarian initiatives, and many continue to contribute to reconstruction efforts. Haiti’s various chambers of commerce have also become more supportive of business ethics and social responsibility programs. During the COVID-19 pandemic, many Haitian, U.S., and other foreign-owned firms donated to prevention and treatment measures.

The Haitian government has not established any incentives to encourage to responsible business conduct.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Corruption, including bribery, raises the costs and risks of doing business in Haiti. U.S. firms have complained that corruption is a major obstacle to effective business operation in Haiti. They frequently point to requests for payment by customs officials in order to clear import shipments as examples of solicitation for bribes.

Haitian law, applicable to individuals and financial institutions, criminalizes corruption and money laundering. Bribes or attempted bribes toward a public official are a criminal act and are punishable by the criminal code (Article 173) for one to three years of imprisonment. The law also contains provisions for the forfeiture and seizure of assets. In practice, however, the law is unevenly and rarely applied.

Transparency International’s Corruption Perception Index for 2021 ranked Haiti in the second lowest spot in the Americas region and 164 out of 180 countries worldwide, with a score of 20 out of 100 in perceived levels of public corruption.

The Haitian government has made some progress in enforcing public accountability and transparency, but substantive institutional reforms are still needed. In 2004, the Government of Haiti established the Anti-Corruption Commission (ULCC), but the organization lacks the necessary resources and political independence to be effective. In 2008, parliament approved the law on disclosure of assets by civil servants and high public officials prepared by ULCC, but to date, compliance has been almost nonexistent.

In February 2022, the ULCC announced the launch of the anti-Corruption circuit at the Court of Cassation. Made up of magistrates from the Courts of First Instance and Courts of Appeal of Haiti, the anti-corruption circuit aims to strengthen judicial efficiency and put an end to impunity in relation to corruption cases.

Haiti’s Superior Court of Auditors and Administrative Disputes (CSCCA) is currently one of Haiti’s few independent government institutions, responsible for reviewing draft government contracts; conducting audits of government expenditures; and clearing all government officials, including those at the political level, to manage public funds. In November 2020, however, the Haitian government published a decree limiting the authority of the Audit Court. The CSCCA had issued three reports in January 2019, May 2019, and August 2020 citing improper management practices by the Haitian government and the alleged wastage of nearly $2 billion of the Petrocaribe funds. Public anger over the Petrocaribe scandal has since burgeoned into a grassroots movement against widespread corruption in Haiti.

The CSCCA publicly calls on Haitian authorities to take measures to influence public expenditure by implementing monitoring and evaluation and consolidating investment expenditure to better assess the effectiveness of public spending. For nearly a decade, the Haitian state has faced a structural deficit in the management of its public resources. Despite many efforts undertaken to improve fiscal performance, the Haitian State is still in a situation of insufficient resources to respond to the pressures exerted on public spending.

Haiti is not a party to the OECD Anti-Bribery Convention.

Any corruption-related activity can be reported to the Haitian Anti-Corruption Unit, responsible for combatting corruption:

Hans Jacques Ludwig Joseph
Director General
Unite de Lutte Contre la Corruption
13, rue Capotille, Pacot, Port-au-Prince, Haiti
Telephone: (509) 2811-0661 / (509) 2816-7071
Email: info@ulcc.gouv.ht

Marilyn B. Allien
President
Fondation Heritage pour Haiti
Petion-Ville, Haiti
Telephone: (509) 3452-1570
Email: admlfhh@yahoo.com / heritagehaiti@yahoo.com

The U.S. government partners with Haiti in its efforts to strengthen the rule of law and enhance public security; pursue economic growth through increased domestic resource mobilization and support for private investment; and strengthen good governance and anti-corruption efforts. President Jovenel Moise was assassinated on July 7, 2022, seven months before the end his five-year term. His administration has faced repeated challenges due to frequently changing executive branch leadership, an ineffective parliament followed by a parliamentary lapse beginning in January 2020, legislative elections not being held as scheduled in October 2019, allegations of widespread corruption, weak rule of law, and a deteriorating economy. These factors have hindered both reconstruction efforts and the passage of important legislation. Sporadic protests since mid-2018 have stemmed from a number of factors, including a lack of progress in the fight against corruption and a lack of viable economic options. Haiti’s political situation remains fragile.

Political and civil disorder, such as periodic demonstrations triggered by fuel shortage, increases in fuel prices and worsening insecurity often interrupt normal business operations. Gang violence continues to plague urban centers. Kidnapping, murders, and sexual and gender-based violence by gangs in their struggle to expand their territorial control have a detrimental impact on the population. The Haitian National Police is seeking to improve the effectiveness of its anti-gang operations, take a more balanced approach between prevention and repression, and increase its presence in sensitive areas. The judiciary suffers from serious structural weaknesses, as evidenced by a lack of judges at every level, high absenteeism, executive influence, and increasing numbers of prolonged pretrial detainees. In recent months, Prime Minister Ariel Henry has continued to engage in dialogue with actors from all political backgrounds in an attempt to broaden the consensus around a single, unified vision that would lead to the restoration of fully functional and democratically elected institutions. Although the government has not yet published a revised electoral calendar, momentum seems to be building around an effort to form an inclusive, credible, and effective interim electoral council that would inspire confidence among a critical mass of national stakeholders.

Damage to businesses and other installations frequently occurs as a result of political and civil disorder. Over the past 10 years, multiple incidents of property damage to offices, stores, hotels, hospitals, fuel stations, and car rental companies and dealerships have been reported in the media and to the U.S. Embassy in Port-au-Prince. Property destruction and vandalism ranges from broken windows to arson and looting. Employees and tourists have also been victims of violence. Kidnapping for ransom is a frequent occurrence in Port-au-Prince. While improvements in the Haitian National Police’s technical and operational capabilities have maintained some semblance of order, violent crime, including looting of businesses, remains a serious problem, along with criminal gang control of a number of Port-au-Prince’s marginalized areas.

More information is available at:

https://travel.state.gov/content/travel/en/international-travel/International-Travel-Country-Information-Pages/Haiti.html

https://www.state.gov/u-s-relations-with-haiti/

The special legislation of the Labor Code of 1984 establishes and governs labor regulations. Under the Code, the Minister of Social Affairs and Labor enforces the law and maintains good relationships with employers and workers. Normal working hours consist of 8-hour shifts and 48-hour workweeks. In September 2017, the Haitian government passed a labor law to permit three eight-hour shifts in a working day, although this has not been fully implemented for all sectors in Haiti. Workers’ social protection and benefits include annual leave, sick leave, health insurance, maternity insurance, insurance in case of accident at work, and other benefits for unfair dismissal.

Labor unions are generally receptive to investment that creates new jobs, and support from the international labor movement, including the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), is building the capacity of unions to represent workers and engage in social dialogue. The Ministry of Labor and Social Affairs is in the process of revising a new labor code that will better comply with international labor standards.

According to U.S. and other companies, relations between labor and management in Haiti have at times been strained. In some cases, however, industries have autonomously implemented good labor practices. In addition to local entities, the International Labor Organization (ILO) has an office in Haiti and operates an ongoing project with the apparel assembly industry to improve productivity through improvement in working conditions. The ILO, with the support of the U.S. Department of Labor, launched Better Work Haiti, a program that was designed to verify compliance with international labor standards and spur job creation in the garment sector.

Since the inception of Better Work Haiti, the garment sector has seen improvement in occupational safety and health across the factories. Employers have increased their efforts to improve chemical safety, and over 95 percent of local factories have initiated policies to create a safer work environment as well as provide good working conditions to garment workers. Wages vary depending on the economic sector. As of February 2022, the minimum wage for the garment sector was 685 gourdes for eight hours of work or (approximately $6.27) in the export-oriented apparel industry. Better Work Haiti’s biannual report found most factories in compliance with the labor law. The most recent report is available at: https://betterwork.org/portfolio/better-work-haiti-23rd-biannual-compliance-synthesis-report/ ort/ .

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

Robert Kemp
Economic Counselor
Embassy of the United States of America
Boulevard du 15 Octobre, Tabarre 41
Port-au-Prince, Haiti
Please address email correspondence to PAPECON@state.gov.

The Government of Jamaica (GoJ) is open to foreign investment in all sectors of the economy. The GOJ made significant structural changes to its economy, under International Monetary Fund (IMF) guidance during the six-year period to 2019, 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 established a 90-day window for development approvals.

The GOJ amended its public procurement regime 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/epps/home.do .

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 metrics 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 141 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/ ).

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 retain records of legal and beneficial owners for seven years.  The GOJ 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.  Post is not aware of any formal screenings that exist for foreign investments.  Incentives are available to local and foreign investors alike, including various levels of tax relief.

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 2017 and an OECD review took place in 2004. 

No domestic or foreign civil society organizations have provided useful reviews of investment policy-related concerns within the past five years.

Businesses can easily 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).  All that is needed is a device with access to the internet, an approved reserved name, proof of address (any recent document used to verify your current address such as a utility bill or driver’s license), and a valid ID (Driver’s License, Passport or Voters Id).  The website gives detailed instructions throughout the process.

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

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).  The PDMA targets a three percent GGL-to-GDP ratio by 2027. 

Jamaica has adopted IFRS Standards including the IFRS for SMEs Standard for all companies. Jamaica adopted IFRS Standards in 2000 by Resolution of the members of the ICAJ.

The Jamaica Corporate Governance Code 2021 was officially launched on Friday, February 25, 2022. The Code remains the only tool of its kind to date in the Caribbean aimed at helping entities – public and private – to implement Corporate Governance best practices in keeping with international standards.  The Code, which was prepared by the PSOJ Corporate Governance Committee through funding by IDB Invest is available for viewing and download here: https://www.psoj.org/corporate-governance-2/.

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).

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 World Bank 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.

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. 

The Fair-Trading Commission (FTC), an agency of the Ministry of Industry, Investment and Commerce, 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 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.

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  

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.

(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. 

(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.

As at March 2022 there were 164 entities operating in Jamaica’s Special Economic Zones (SEZ), occupying over 25 million square feet.  Operations in Jamaica’s SEZs include business process outsourcing (BPO); warehousing and distribution; manufacturing; and assembly and production facilities.  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.  

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.

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.

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.  With less than half of land in Jamaica registered, it can take a long time for landowners to secure titles.  

Squatting is also a major challenge in Jamaica, with an estimated 20 percent of the population living as squatters.  Three-quarters of these 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 landowner).  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  

Jamaica has one of the stronger intellectual property (IP) protection regimes in Latin America and the Caribbean according to the U.S. Chamber of Commerce’s Intellectual 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.  It is relatively easy to register IP, and the Jamaica Intellectual Property Office (JIPO) assists parties interested in registering IP and supports investors’ 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.  IP violations tend to be more in relation to physical goods, while electronic IP 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 Act and has been removed from the USTR Special 301 Watchlist.  The Act came into force in February 2022.  The Geographical Indications Act (GI) of 2004 is now fully in force and is TRIPS compliant, protecting products whose particular quality or reputation is attributable to its geographical origin.  The Trademarks (Amendment) Act of 2021 went into force in March 2022, bringing into effect the Madrid Protocol.  General law provides protection for trade secrets and protection against unfair competition is guaranteed under the Fair Competition Act.  The Madrid Protocol allowing for international registration of a trademark on the basis of a single application takes effect on March 27, 2022.

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 and 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 counter terrorism and organized crime branch (C-TOC) in 2015 to boost IP 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 2021, over $60 million in counterfeit goods were destroyed by state agencies.  The amount increased significantly due to the destruction of goods seized by Jamaica Customs in 2017.  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, and in recent cases the cost started at $250,000.  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/.

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.

At the end of 2021 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 2021.  Commercial banks held assets of approximately $14 billion at the end of 2021.  Non-performing loans (NPL) of $200 million at end December 2020, were 3 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.  The modernization efforts continued in 2020 with the passage of the Bank of Jamaica Amendment Act to allow for, among other things: (1) full-fledged inflation targeting; (2) improved capitalization, governance, transparency, and accountability; (3) monetary policy decisions to be devolved to a monetary policy committee; and (4) the central bank Governor to account to Parliament.  The Act will therefore remove the power of the government to give monetary policy direction to the central bank.  These changes will move Jamaica’s financial governance framework closer in line with international standards.   

In May of 2020, the BOJ, as a part of their ongoing retail payments reform, ventured into the digital innovation that is fast becoming a feature of global central banks, central bank digital currency (CBDC).  CBDC is a digital form of central bank issued currency and is therefore legal tender.  It is not to be confused with cryptocurrency, which is privately issued and not backed by a central authority.  CBDC is fully backed by the Central Bank, the sole issuer.  The Bank of Jamaica will roll out the digital Jamaican dollar in 2022 after a successful pilot during 2021.

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

Jamaican SOEs are most prominent in the agriculture, mining, energy, and transport sectors of the economy.  Of 149 public bodies, 54 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.   

As part of its economic reform program, 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 (IPOs): a 62-megawatt wind farm, which raised almost $40 million, and a toll highway, which raised almost $90 million.  The GOJ is in planning to divest the Jamaica Mortgage Bank and its minority interest in the electricity provider, the Jamaica Public Service, through public offerings.  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.    

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

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.  

Recent years have seen increased disputes over bauxite mining rights in Jamaica’s Cockpit Country, an area inhabited by the semi-autonomous Maroon population.  In January 2022, the Jamaican government granted a Jamaican-owned subsidiary of an international firm rights to mine on more than one thousand acres of previously protected land claimed by the Maroons despite protests by community representatives.

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 the last couple years and it remained a significant cause 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.  Three Ministers of government demitted office between 2018 and March 2022, 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 2021, Transparency International gave Jamaica a score of 44 out of a possible 100 on the Corruption Perception Index (CPI). 

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, mostly attributed to gangs, is rooted in poverty, unemployment, social neglect, and transnational crime, including so-called “lottery-scamming”, and is a serious problem in Jamaica.  Gang violence is highly concentrated in inner-city neighborhoods but can occur elsewhere.  The Jamaica Constabulary Force recorded 1,463 murders in 2021, a per capita homicide rate of roughly 50 per 100,000, the highest homicide rate in Latin America and the Caribbean in 2021.  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 (of March 2022) assesses Jamaica at Level 3, 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).

Jamaica had an estimated labor force of 1.3 million as of October 2021 with an unemployment rate of 7.1 percent.  Women make up 46.2 percent of the labor force and have an unemployment rate of 9 percent.  Unemployment is highest within the 14-19 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.  

Data from the Statistical Institute of Jamaica (STATIN) show that the number of women securing employment is gradually increasing.  According to STATIN’s October 2021 Labor Force Survey, of the 76,600 additional persons gaining jobs to expand the employed labor force by 6.6 per cent to 1,234,800, women accounted for 43,700.  This out-turn represents 57 per cent of the overall additional jobs generated and pushed the number of gainfully employed females by 8.5 per cent up to 558,600.  While the margin of increase for males was smaller, at 39,900 or 5.1 per cent, the overall number of men in jobs was significantly larger, at 676,200 (https://jis.gov.jm/government/ministries/).

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.  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.  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 has an Industrial Disputes Tribunal (IDT) to which the Minister of Labor and Social Security may refer disputes unsettled at the local level.    

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 yet to be ratified.  In conjunction with the ILO and local stakeholders, the GOJ passed legislation guiding flexible working arrangements. 

The informal economy (encompassing pure tax evasion, the irregular economy and illegal activities) represents a large and growing share of the overall economy.  This growing sector represents a diverse group of enterprises and workers, ranging from local peddlers to relatively sophisticated small entrepreneurs.  Tax evaders reduce revenue the Jamaican tax system would otherwise receive.  Tax evasion therefore contributes to lower levels of government services, higher taxes on the rest of the economy and larger government deficits.  Irregular economic activity is the least virulent portion of the informal economy, and even has beneficial aspects.  Irregular activity generates goods, services and jobs that might otherwise be unavailable.  

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

The government of St. Kitts and Nevis strongly encourages foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens.

The country is home to the ECCB, the Eastern Caribbean Securities Exchange (ECSE), and the Eastern Caribbean Securities Regulatory Commission.

In the federation, each island has a separate investment promotion agency, the St. Kitts Investment Promotion Agency (SKIPA), and the Nevis Investment Promotion Agency (NIPA).  Both agencies have introduced several investment incentives for businesses that consider locating in the federation.  SKIPA and NIPA provide “one-stop shop” facilitation services to investors, guiding them through the various stages of the investment process.

The government encourages investment in all sectors, but targeted sectors include financial services, tourism, real estate, agriculture, information and communication technologies, international education services, renewable energy, ship registries, and limited light manufacturing.

Local laws do not dictate any limits on foreign control in St. Kitts and Nevis.  Foreign investors may hold up to 100 percent of an investment.  Local enterprises generally welcome joint ventures with foreign investors to access technology, expertise, markets, and capital.

Foreign investment in St. Kitts and Nevis is generally not subject to any restrictions, and foreign investors receive the same treatment as citizens.  The only exception to this is the requirement that foreign investors obtain an Alien Landholders License to purchase residential or commercial property.

The OECS, of which St. Kitts and Nevis is a member, has not conducted a World Trade Organization (WTO) trade policy review in the last three years. No civil society organization has provided a review of investment policy-related concerns.

SKIPA and NIPA facilitate domestic and foreign direct investment in priority sectors and advise the government on the formation and implementation of policies and programs to attract investment.  Both agencies provide business support services and market intelligence to investors.

Businesses must register with the Financial Services Regulatory Commission, the Registrar of Companies, the Ministry of Finance, the Inland Revenue Department, and the Social Security Board. It is not mandatory to use an attorney prepare to incorporation documents.

Local laws do not place any restrictions domestic investors seeking to do business abroad.  Local companies in St. Kitts and Nevis 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.

St. Kitts and Nevis does not have a bilateral investment treaty with the United States.  It has a Double Taxation Agreement with the United States, but this agreement is limited solely to social security benefits.  St. Kitts and Nevis’s Double Taxation Agreements meet Organization for Economic Cooperation and Development (OECD) standards, as well as Tax Information Exchange Agreements standards.  St. Kitts and Nevis maintains double taxation agreements with several countries including Denmark, Norway, Sweden, and the UK.  It has Double Taxation Conventions (DTCs) with Monaco, San Marino, and some Caribbean Community countries.  St. Kitts and Nevis is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting and is party to the OECD’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax. St. Kitts and Nevis is also party  to the following agreements:

The Treaty of Chaguaramas established the Caribbean Community (CARICOM) to promote economic integration among its 15 member states.  Investors operating in St. Kitts and Nevis have preferential access to the entire CARICOM market.  The Revised Treaty of Chaguaramas established the CSME, which permits the free movement of goods, capital, and labor within CARICOM member states.

The Revised Treaty of Basseterre established the OECS.  The OECS consists of seven full members: Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines, and four associate members: Anguilla, Martinique, Guadeloupe, and the British Virgin Islands.  The OECS aims to promote harmonization among member states concerning foreign policy, defense and security, and economic affairs.  The six independent countries of the OECS ratified the Revised Treaty of Basseterre, establishing the OECS Economic Union in 2011.  The Economic Union established a single financial and economic space within which all factors of production, including goods, services, and people, move without hindrance.

The European Community and the Caribbean Forum (CARIFORUM) the CARICOM states signed an Economic Partnership Agreement (EPA) in 2008.  CARIFORUM consists of the independent Anglophone CARCOM member states, the Dominican Republic, and Suriname. The overarching objectives of the EPA are to alleviate poverty in CARIFORUM states, to promote regional integration and economic cooperation, and to foster the gradual integration of the CARIFORUM states into the world economy by improving their trade capacity and creating investment-conducive environments.  The EPA promotes trade-related developments in areas such as competition, intellectual property, public procurement, the environment, and protection of personal data.

The UK and the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) states CARIFORUM signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union.  The CARIFORUM-UK EPA eliminates all tariffs on all goods imported from CARIFORUM states into the UK, while Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.

The UK and CARIFORUM signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union.  The CARIFORUM-UK EPA eliminates tariffs on all goods imported from CARIFORUM states into the UK, while those Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.

The objective of the Caribbean Basin Initiative is to promote economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying economies, and expanding exports.  The Caribbean Basin Initiative permits duty-free entry of products manufactured or assembled in St. Kitts and Nevis into the United States.

The Caribbean/Canada Trade Agreement (CARIBCAN) is an economic and trade development assistance program for Commonwealth Caribbean countries.  Through CARIBCAN, Canada provides duty-free access to its national market for most products originating in Commonwealth Caribbean countries.

The Government of St. Kitts and Nevis provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The St. Kitts Ministry of Finance and SKIPA and the Nevis Ministry of Finance and NIPA provide oversight of the system’s transparency as it relates to investment. The government does not promote or require environmental, social, and governance disclosures by companies.

The incorporation and registration of companies differs somewhat on the country’s two constituent islands.  In St. Kitts, the Companies Act regulates the process.  In Nevis, the Nevis Island Business Corporation Ordinance regulates the incorporation of companies.  There are no nationality restrictions for directors in a company, and in general, national treatment is applied.  All registered companies must have a registered office in St. Kitts and Nevis.

Rulemaking and regulatory authority lies with the unicameral parliament of St. Kitts and Nevis.  The parliament consists of 11 members elected in single-seat constituencies (eight from St. Kitts and three from Nevis) for a five-year term.

Although St. Kitts and Nevis does not have legislation that guarantees access to information or freedom of expression, access to information is generally available in practice.  The government maintains an information service and a website where it posts information such as directories of officials and a summary of laws and press releases.  The government budget and limited debt obligation information are available on the website:  https://www.gov.kn/ .  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 in St. Kitts and Nevis.

The independent Office of the Ombudsman guards against abuses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating any complaint relating to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice due to the exercise of the administrative function of that officer or body.

Regulations are developed nationally and regionally.  Nationally, the relevant line ministry reviews regulations.  Ministries then submit the results of their reviews to the Ministry of Justice, Legal Affairs and Communications for the preparation of the draft legislation.  Subsequently, the Ministry of Justice, Legal Affairs and Communications reviews all agreements and legal commitments (national, regional, and international) to be undertaken by St. Kitts and Nevis to ensure consistency prior to finalization.  SKIPA has the main responsibility for project-level supervision, while the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes. Regulatory actions under the purview of the country’s Financial Services Regulatory Commission are posted on its website.

St. Kitts and Nevis’s membership in regional organizations, particularly the OECS and its Economic Union, commits it to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.  The enforcement mechanisms of these regulations include penalties or legal sanctions.

As a member of the OECS and the Eastern Caribbean Customs Union, St. Kitts and Nevis subscribes to a set of 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, St. Kitts and Nevis is obligated to implement regionally developed regulations, such as legislation passed under OECS authority, unless specific concessions are sought.

The St. Kitts and Nevis Bureau of Standards develops, establishes, maintains, and promotes standards for improving industrial development, industrial efficiency, the health and safety of consumers, the environment, food and food products, and the facilitation of trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, St. Kitts and Nevis, through the St. Kitts and Nevis Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

St. Kitts and Nevis ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate reductions in trade costs, and enhance participation in the global value chain.  St. Kitts and Nevis has already implemented some TFA requirements.  A full list is available at:  https://tfadatabase.org/members/saint-kitts-and-nevis.

St. Kitts and Nevis bases its legal system on the British common law system.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court (ECSC), junior judges, and magistrates administer justice in the country.  The ECSC 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 matters and makes determinations on interpretation of the Constitution.  Parties may appeal to the ECSC, an itinerant court that hears appeals from all OECS members.  Final appeal is to the Judicial Committee of the Privy Council of the UK.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In its appellate jurisdiction, the CCJ considers and determines appeals from CARICOM member states, which are parties to the Agreement Establishing the Caribbean Court of Justice.  Currently, St. Kitts and Nevis is subject only to the original jurisdiction of the CCJ.

The United States and St. Kitts and Nevis 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.

St. Kitts and Nevis’ policy is to attract foreign direct investment into the priority sectors identified under its National Diversification Strategy.  These include financial services, tourism, real estate, agriculture, information technology, education services, and limited light manufacturing.  However, investment opportunities also exist in renewable energy and other services.  The main laws concerning foreign investment include the Fiscal Incentive Act, the Hotels Aid Act, and the Companies Act.

SKIPA and NIPA offer websites useful for navigating procedures and registration requirements for foreign investors at  https://investstkitts.kn  and  https://investnevis.org .  St. Kitts also offers an online investment handbook at  https://goldenbookskn.com .

Under St. Kitts and Nevis’ citizenship by investment (CBI) program, foreign individuals can obtain citizenship without needing to establish residence (or gaining voting rights).  Applicants are required to undergo a due diligence process before citizenship can be granted.  A minimum investment for a single investor to qualify is $200,000 in real estate or a $150,000 contribution to the Sustainable Growth Fund. Applicants must also provide a full medical certificate and evidence of the source of funds.  Applications for CBI status for real estate projects should be submitted to SKIPA for review and processing.  Further information is available at:  http://www.ciu.gov.kn/ .

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 to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  St. Kitts and Nevis does not have domestic legislation regulating competition.

St. Kitts and Nevis employs eminent domain laws which allow the government to expropriate private property.  The government is required to compensate owners.  There are also laws that permit the acquisition of private businesses, and the government claims such laws are constitutional.  The concept of eminent domain and the expropriation of private property is typically governed by laws that require governments to adequately compensate owners of the expropriated property at the time of its expropriation or soon thereafter.  In some cases, the procedure for compensation of owners favors the government valuation.

The U.S. Embassy in Bridgetown is aware of two separate and outstanding cases involving the seizure of private land by the government.

In the first case, the government of St. Kitts and Nevis was ordered in 2013 to pay a judgement to the American claimant in a series of installments. After completing the first two installments to the American claimant in 2013 and 2014, the government subsequently defaulted. Although a local court ordered the government to pay the 2015 and 2016 installments, it has yet to do so. The government alleges that another individual has made a claim on part of the property and that it must wait until a court determines the outcome of the other claim before completing payments to the American claimant. In 2020, a court ruled that the balance of payment due was to be deposited by the government into a court-controlled account to facilitate payment upon resolution of the other property claim. During the reporting period, the government did not deposit the balance into a court-controlled account. By the end of 2021, no further payments had been made to the estate of the American claimant. The court case deciding on the competing claim has not yet been scheduled.

In the second case, in 2015, an American company signed an agreement with the government to provide 2 million gallons of water. According to the American company, the government expropriated the company’s drilling equipment in 2018 without compensation. In 2019, the government agreed to pay a $1 million settlement to the company and to deposit an additional $500,000 into an escrow account. The company subsequently agreed to a settlement of $750,000 in addition to the escrow deposit. Although the government agreed to the payments, it has not released the funds. According to the Ministry of Foreign Affairs, an additional agreement was reached between the parties in December 2020, regarding the delivery of water and the payment of all fees. The U.S. Embassy in Bridgetown continues to recommend caution when conducting business in St. Kitts and Nevis.

St. Kitts and Nevis has a bankruptcy framework that grants certain rights to debtor and creditor, including the ability of creditors to pursue necessary actions to resolve outstanding debts.

To increase investment in the country, the government of St. Kitts and Nevis implemented a series of investment incentives codified in the Fiscal Incentives Act.  The Fiscal Incentives Act includes a tax holiday of up to 15 years; additional tax rebates of up to five years; exemption from customs duties on material and equipment deemed necessary to establish or update an enterprise; repatriation of profits, dividends, royalties, and imported capital by arrangement with the Ministry of Finance; and protection of investment through government agreement.  Four types of enterprises qualify for tax holidays.  The length of the tax holiday for the first three types of enterprises depends on the amount of value added in St. Kitts and Nevis.  The Fiscal Incentives Act (Amendment) Bill, 2019, amended the definition of the fourth type of enterprise, known as enclave industry.  Enclave enterprises are now permitted to sell goods within the CARICOM region and in the local market, in addition to exporting these goods.

Companies that qualify for tax holidays may import duty-free all equipment, machinery, spare parts, and raw materials used in production.

The Hotels Aid Act provides relief from customs duties on items brought into the country for use in the construction, extension, and equipping of a hotel of not less than ten bedrooms.  In addition, the Income Tax Act provides special tax relief benefits for hotels of more than 30 bedrooms.  These hotels are exempt from income tax for ten years.  If the hotel contains fewer than 30 bedrooms, gains or profits are exempt from income tax for five years.

Value Added Tax is levied on the total accommodation charges of a hotel or guest house and on the cost of food and beverages sold by a restaurant.  This total tax rate is ten percent.

Tax laws do not require investors in St. Kitts and Nevis to pay a capital gains tax.  Qualified companies enjoy full exemption from taxes on corporate profits for a period not exceeding 15 years.  Corporate tax does not apply to exempt companies or to enterprises that were granted tax concessions.  There is no personal income tax.  Additional tax concessions are available at the end of the tax holiday period.

Normally, individuals and ordinary companies remitting payments to parties outside St. Kitts and Nevis must deduct ten percent withholding tax from profits, administration, management or head office expenses, technical services fees, accounting and audit expenses, royalties, non-life insurance premiums, and rent.  However, this tax does not apply to profits of an approved enterprise such as exempt trusts, limited partnerships, companies, or foundations.

The Unincorporated Business Tax Act mandates a levy on the gross revenue of services provided by professionals such as doctors, lawyers, dentists, and other specified persons listed in the schedule at a rate of four percent.

The government of St. Kitts and Nevis does not issue guarantees or jointly finance foreign direct investment projects.

No incentives are offered for businesses owned by underrepresented investors such as women.

For 2-5MW investments in solar, wind, and waste-to-energy, 10MW investments in geothermal energy, and investments in LED and solar streetlights, the government of St. Kitts and Nevis offers exemptions from import duties and custom service charges on related equipment. Due to the small market size, these incentives have had limited impact to date on facilitating green investment.

There are no foreign trade zones, free ports, or special economic zones in St. Kitts and Nevis.  However, there are four fully developed industrial sites where production facilities can be constructed to specifications and leased at nominal rates.  The Development Bank of St. Kitts and Nevis manages and services the sites on behalf of the government.

St. Kitts and Nevis does not mandate local employment.  The provisions of the Labor Code outline the requirements for acquiring a work permit and prohibit anyone who is not a citizen of St. Kitts and Nevis or the OECS from engaging in employment without a work permit.  When St. Kitts and Nevis grants work permits to senior management because no qualified nationals are available for the post, the government may recommend a counterparty trainee who is a citizen.  There are no excessively onerous visa, residency, or work permit requirements.

As a member of the WTO, St. Kitts and Nevis 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 may hold up to 100 percent of an investment.  Except for the requirement to obtain an Alien Landholders License, foreign investment in St. Kitts and Nevis is not subject to any restrictions, and foreign investors receive national treatment.  There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance.  There are no measures or draft measures that prevent or restrict companies from freely transmitting customer or other business-related data outside the country.

Civil law protects physical property and mortgage claims.  Foreign investors are required to obtain an Alien Landholders License to purchase residential or commercial property.  The cost of these licenses is ten percent of the value of the land, plus fees associated with an attorney or other local service provider.  Cabinet grants these licenses.  Foreign investors are not required to pay the Alien Landholders License Tax in areas designated as special development zones, such as Frigate Bay or certain parts of the Southeast Peninsula.  The Land Registry Act of 2017 was enacted to modernize records, identify property owners, and register clear land titles.

St. Kitts and Nevis has a legislative framework supporting its commitment to the protection of intellectual property rights (IPR).  While the legal structures governing IPR are adequate, enforcement is inconsistent.  The Intellectual Property Office of St. Kitts and Nevis (IPOSKN) is responsible for administering all laws related to IPR and overseeing the registration of patents, trademarks, and service marks.  Its website is  https://ipo.gov.kn .

St. Kitts and Nevis is signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Berne Convention for the Protection of Literary and Artistic Works.  It is also a member of the UN World Intellectual Property Organization (WIPO).

Article 66 of the Revised Treaty of Chaguaramas establishing the CSME commits all 15 members to implement IPR protection and enforcement.  The CARIFORUM-EU EPA contains the most detailed obligations regarding IPR in any trade agreement to which St. Kitts and Nevis is party.  The CARIFORUM-EU EPA recognizes to the protection and enforcement of IPR. Article 139 of the CARIFORUM-EU 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 Rights (TRIPS).”

The Customs Department of St. Kitts and Nevis can seize prohibited or counterfeit goods.  However, the courts rule on the forfeiture and disposal of such goods.  Complainants arrange with Customs to secure the goods until a judgment is rendered.  St. Kitts and Nevis is in the process of reviewing its existing laws in relation to the importation of counterfeit and prohibited goods.

St. Kitts and Nevis is not included in the United States Trade Representative (USTR) 2021 Special 301 Report or USTR’s 2020 Review of Notorious Markets for Counterfeiting and Piracy.

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/ .

St. Kitts and Nevis is a member of the ECCU.  As such, it 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 the buying and selling of financial products for the eight member territories.  In 2021, the ECSE listed 164 securities, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities.  Market capitalization stood at $1.9 billion.  St. Kitts and Nevis is open to portfolio investment.

St. Kitts and Nevis accepted the obligations of Article VIII of the IMF Agreement, Sections 2, 3 and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions.  The private sector has access to credit on the local market through loans, purchases of non-equity securities, trade credits, and other accounts receivable that establish a claim for repayment.

The eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act.  The Act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters.  St. Kitts and Nevis is a signatory to this agreement, and the ECCB controls St. Kitts and Nevis’s currency and regulates its domestic banks.

Domestic and foreign banks can establish operations in St. Kitts and Nevis.  The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business.  The ECCB regulates financial institutions.  As part of ongoing 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 as stable.  Assets of commercial banks totaled $2.5 billion (6.8 billion Eastern Caribbean dollars) at the end of 2019.

St. Kitts and Nevis is well served by bank and non-bank financial institutions.  There are minimal alternative financial services.  Some citizens still participate in informal community group lending.

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 and appointed a Committee of Ministers of Finance on Correspondent Banking to monitor the issue.

In 2019, the ECCB started an 18-month financial technology pilot to launch a Digital Eastern Caribbean dollar (DXCD) with its partner, Barbados-based Bitt Inc.  An accompanying mobile application, DCash, was officially launched in March 2021 in four pilot countries including St. Kitts and Nevis.  While initially declared a success, its platform crashed in early 2022 and remained offline for almost two months before resuming in March, raising questions about the project’s reliability. The digital Eastern Caribbean currency was intended to operate alongside physical Eastern Caribbean currency.

St. Kitts and Nevis enacted the Virtual Assets Bill, 2020, to regulate virtual currencies with the expectation that they will become increasingly prevalent.  The bill is intended to facilitate the ease of doing business in a cashless society, and to combat theft, fraud, money laundering, Ponzi schemes, and terrorist financing.

Neither the government of St. Kitts and Nevis, nor the ECCB, of which St. Kitts and Nevis is a member, maintains a sovereign wealth fund.

State-owned enterprises (SOEs) in St. Kitts and Nevis work in partnership with ministries, or under their remit to carry out certain specific ministerial responsibilities.  There are currently ten SOEs in St. Kitts and Nevis in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.  They are all wholly owned government entities.  Each is headed by a board of directors to which senior managers report.  A list of SOEs can be found at  http://www.gov.kn .

St. Kitts and Nevis does not currently have a targeted privatization program.

The private sector is involved in projects that benefit society, including support of environmental, social, and cultural causes.  The government encourages corporate social responsibility but does not have regulations in place to mandate such activities by private companies.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

St. Kitts and Nevis has a national climate strategy via its updated Nationally Determined Contribution (NDC), submitted in 2021, and is currently finalizing a national adaptation plan for which it has received funding under the Green Climate Fund. It does not have a specific strategy for monitoring natural capital. The NDC includes a pledge to reduce greenhouse gas emissions by 60 percent by 2030 and has identified several mitigation strategies to achieve this goal. These include an effort to transition to 100 percent renewable energy by 2030, improvements to efficiency in electricity transmission and distribution, and development of electric vehicle infrastructure. The government hopes to receive substantial external support, primarily from the international community, in pursuit of these goals. Beyond the previously mentioned investment incentives, there are no current regulatory incentives in place to achieve policy outcomes that preserve biodiversity, clean air, and other desirable ecological benefits. Public procurement policies do not currently consider environmental and green growth considerations.

The law provides criminal penalties for official corruption, and the government generally implements these laws effectively.  Media and private citizens reported government corruption was a problem.

Public officials are not subject to financial disclosure laws.  The Financial Intelligence Unit and the police force’s white-collar crime unit investigate reports on suspicious financial transactions, but these reports were not available to the public.

Government agencies involved in enforcement of anti-corruption laws include the Royal St. Kitts and Nevis Police Force, the Director of Public Prosecutions, and the Financial Intelligence Unit.  The Financial Intelligence Unit investigates financial crimes, but no independent body has been established to handle allegations of government corruption.

Simone Bullen-Thompson
Solicitor-General
Legal Department
Church Street, Basseterre, St. Kitts and Nevis
Tel: 869-465-2170
Email:  simone_bullen@hotmail.com

St. Kitts and Nevis does not have a recent history of politically motivated violence or civil disturbance. St. Kitts and Nevis’ general elections are constitutionally due in 2025.

St. Kitts and Nevis has a labor force of approximately 25,000 with a literacy rate of 98 percent.  Local colleges largely meet the country’s technical and training needs.  There is also a large pool of professionals to draw from in fields such as law, medicine, information technology, and accounting.  Many of the professionals in St. Kitts and Nevis trained in the United States, Canada, the wider Caribbean, or the UK, and often also gain work experience before returning to St. Kitts and Nevis.

The government set the minimum wage at $3.31 an hour.  The law provides for a 40-hour workweek and for premium pay for work above the standard workweek.  There is no legal prohibition on excessive or compulsory overtime.  Although not required by law, workers generally received at least one 24-hour rest period per week.  The law also calls for paid holidays and work on rest days to be paid at double the standard rate, as well as equal pay for equal work.

According to the IMF, the informal economy is among the smallest in the region and is estimated to represent no more than 25 percent of GDP. The informal economy has extremely limited impact on contracts, industry access, and other economic aspects that might impact investment opportunities.

Although there is no legislation governing the organization and representation of workers, the constitution speaks to the freedom of association and the right to organize and collective bargaining.  St. Kitts and Nevis ratified the International Labor Organization (ILO) Conventions on freedom of association and the right to organize and collective bargaining.  The law permits the police, civil servants, hotel workers, construction workers, and employees of small businesses to organize staff associations.  Staff associations do not have bargaining powers but are used to network and develop professional standards.

Local laws allow labor unions to organize and to negotiate for better wages and benefits for union members.  A union representing more than fifty percent of the employees at a company may apply for the company to recognize the union for collective bargaining.  Companies generally recognize the establishment of a union if the majority of its workers voted in favor of organizing the union, but the companies are not legally obligated to do so.  Collective bargaining takes place on a workplace-by-workplace basis and is not industry-wide.

In practice, but not by law, there are restrictions on strikes by workers who provide essential services, such as the police and civil servants.  The law prohibits anti-union discrimination but does not require employers found guilty of such action to rehire employees who were fired for union activities.  However, the employer must pay lost wages and severance pay.  The ILO Committee of Experts reported in 2015 that workers are not protected against antiunion discrimination during recruitment or on the job.  The ILO provided technical assistance to the government in labor law reform, labor administration, employment services, labor inspection, and occupational safety and health.

The Labor Commissioner mediates all types of disputes between labor and management.  By law, the system of industrial relations in St. Kitts and Nevis allows for labor grievances through a process of conciliation and mediation by the Department of Labor and the Commissioner, an independent hearing, arbitration, and finally a court of law.  In practice, however, few disputes go to the Commissioner for resolution.  If neither the Commissioner nor the Ministry of Labor can resolve the dispute, the law allows a case to be brought before a civil court.

The law does not provide remedies for labor law violations, and the Ministry of Labour does not provide information on the adequacy of resources, inspections, and penalties for violations.  Penalties are outdated and fines are insufficient to deter violations.  The Department of Labour provided employers with training on their rights and responsibilities.

Investors in St. Kitts and Nevis are responsible for maintaining workers’ rights and safeguarding the environment.  While there are no specific health and safety regulations, the Factories Act provides general health and safety guidance to Labor Ministry inspectors.  The Labor Commission settles disputes over safety conditions.  Workers have the right to report unsafe work environments without jeopardy to continued employment, and workers may leave such locations without jeopardy to their continued employment.

* Source for Host Country Data: Eastern Caribbean Central Bank  https://www.eccb-centralbank.org/statistics/dashboard-datas/ .

Table 3: Sources and Destination of FDI
St. Kitts and Nevis does not appear in the IMF’s Coordinated Direct Investment Survey (CDIS).

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

The Government of Saint Lucia strongly encourages foreign direct investment (FDI).  Invest Saint Lucia has introduced several investment incentives for businesses that consider locating in Saint Lucia, encouraging both domestic and foreign private investment.  Invest Saint Lucia is managed by a Chief Executive Director and is overseen by a board of directors appointed by the government under the Office of the Prime Minister and Minister of Commerce, International Trade, Investment, Enterprise Development and Consumer Affairs. The state-run agency Invest Saint Lucia provides “one-stop shop” facilitation services to investors, helping to guide them through the various stages of the investment process.  It assesses investment proposals for viability and in accordance with the laws of Saint Lucia and provides investment promotion services.

Applicable government agencies, rather than Invest Saint Lucia, grant investment concessions. Government policies provide liberal tax holidays, a waiver of import duty on imported plant machinery and equipment and imported raw and packaging materials, and export allowance or tax relief on export earnings.  Various laws provide fiscal incentives to encourage establishing and expanding foreign and domestic investment.

The Saint Lucian government encourages investment in all sectors, but targeted sectors include tourism, smart manufacturing and infrastructure, information and communication technologies, alternative energy, education, and business/knowledge processing operations.

Local laws do not place any limits on the amount of foreign ownership or control in the establishment of a business in Saint Lucia.  The government allows 100 percent foreign ownership of companies in any sector.  Currently, there are no restrictions on foreigners investing in military or security-related businesses or natural resources.  Trade licenses and other approvals/licenses may be required before establishment.

Invest Saint Lucia evaluates all FDI proposals and provides intelligence, business facilitation, and investment promotion to establish and expand profitable business enterprises in Saint Lucia.  Invest Saint Lucia also advises the government on issues that are important to the private sector and potential investors and advocates for an improved business climate, growth in investment opportunities, and improvements in the international competitiveness of the local economy.  It focuses on building and promoting Saint Lucia as an ideal location for investors, seeking and generating new investment in strategic sectors, facilitating domestic and foreign direct investment as a one stop shop for investors, and identifying major issues and measures geared towards assisting the government in the ongoing development of a National Investment Policy.

The Government of Saint Lucia 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.

The OECS, of which Saint Lucia is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

All potential investors applying for government incentives must submit their proposals for review by Invest Saint Lucia to ensure the projects are consistent with the national interest and provide economic benefits to the country.  Invest Saint Lucia offers an online resource that is useful for navigating the laws, rules, procedures, and registration requirements for foreign investors.  It is available at  http://www.investstlucia.com/ .

The Registry of Companies and Intellectual Property office maintains an e-filing portal for most of its services, including company registration.  Relevant officials can review applications submitted electronically.  Applicants, however, must pay the registration fee in-person at the Registry office.  The Registry of Companies and Intellectual Property office can only accept payment in the form of cash and checks.  Personal checks are not accepted.  It is advisable to consult a local attorney prior to starting the process.  Further information is available at  http://www.rocip.gov.lc .

The general practice for starting a business is to retain an attorney to prepare all incorporation documents.  A business must register with the Registry of Companies and Intellectual Property Office, the Inland Revenue Authority, and the National Insurance Corporation.  The Government of Saint Lucia continues to support the growth of women-led businesses.  The government seeks to support equitable treatment of women in the private sector through non-discriminatory processes for business registration, awarding of fiscal incentives, and assessing investments.

The Government of Saint Lucia is committed to the full participation of people with disabilities in the society and the economy.  It actively engages with people with disabilities in society to ensure the equal participation of people with disabilities in formal and informal sectors of the economy.

The Government of Saint Lucia prioritizes investment retention as a key component of its overall economic strategy.  While the Government of Saint Lucia is encouraging more domestic savings, it continues to require significant foreign investment to fill the investment gap.

Local laws do not place ay restrictions on domestic investors seeking to do business abroad.  The government actively encourages local companies in Saint Lucia 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.

Saint Lucia does not have a bilateral investment treaty with the United States.  Saint Lucia has bilateral investment treaties with the United Kingdom, Germany, and the Caribbean Community (CARICOM).  Saint Lucia is also party to the following:

Saint Lucia has signed taxation agreements with other CARICOM countries.  There is no taxation treaty with the United States, but there is a bilateral Tax Information Agreement.

The legal framework in Saint Lucia seeks to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Commerce, International Trade, Investment, Enterprise Development, and Consumer Affairs in the Office of the Prime Minister and Invest Saint Lucia provide oversight on the transparency of the system as it relates to investment.  The government offers a range of incentives for foreign investors.  The Invest Saint Lucia Act addresses government policy for attracting investment.  The Trade License Act, Aliens Licensing Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Tourism Incentives Act, Investment and Stimulus Act, and Fiscal Incentives Act also impact foreign investment.  The government announced plans to update these pieces of legislation to ensure that Saint Lucia remains compliant with international tax and exchange of information requirements.

Rulemaking and regulatory authority lie with the bicameral parliament.  The parliament consists of a lower house, which has 17 members elected for five-year terms in single-seat constituencies, and a Senate with 11 appointed members.

Relevant laws govern all regulations relating to foreign investment in Saint Lucia.  These laws are developed in the respective ministries and drafted by the Office of the Attorney General.  FDI is covered by the enacting legislation for Invest Saint Lucia, the citizenship by investment program, and some sector-specific laws such as the Fiscal Incentives Act or tourism-related laws.  Saint Lucia’s laws are available online at  http://www.govt.lc .

Although some draft bills are not subject to public consultation, the government often solicits input from various stakeholder groups and via town hall meetings when formulating new legislation.  The government also uses public awareness efforts such as television and radio call-in programs to inform and shape public opinion.  The government publishes copies of proposed laws and regulations in the Official Gazette before they are presented in the House of Assembly.  Although Saint Lucia does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains an information service website on which it posts information such as directories of officials and a summary of laws and press releases.  The government budget and an audit of that budget are available on the website.  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 in Saint Lucia.  The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Saint Lucia to be largely compliant.  The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.

The Office of the Parliamentary Commissioner or Ombudsman is a constitutional entity created to guard against abuses of power by government officers in the performance of their duties.  The Office of the Parliamentary Commissioner is independent.  The Parliamentary Commissioner investigates complaints relating to actions or omissions by any government official or government body where such actions or omissions cause an injustice or harm a member of the public.

In developing regulations, respective ministries advise the Ministry of Home Affairs, Justice, and National Security regarding necessary elements and parameters of proposed legislation.  The Ministry of Home Affairs, Justice, and National Security subsequently drafts legislation, ensuring compatibility with the nation’s domestic and international legal commitments.  Invest Saint Lucia has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.  Saint Lucia’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to ensure the fulfillment of its various treaty obligations, although there are some minor differences in implementation from country to country.  The enforcement mechanisms of these regulations include financial penalties and other sanctions.

As a member of the OECS and the ECCU, Saint Lucia subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  Each participating member state is expected to coordinate and adopt, where possible, common national policies, with the objective of progressive harmonization of relevant policies and systems across the region.  Saint Lucia is obligated to implement regionally developed regulations, such as legislation passed under OECS authority, unless it seeks specific concessions not to implement such regulations.

The Saint Lucia Bureau of Standards is a statutory body established under the Standards Act.  It establishes, maintains, and promotes standards for improving industrial development and efficiency, promoting the health and safety of consumers, and protecting the environment, food products, quality of life, and the facilitation of trade.  It also conducts international standards consultations and training.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, Saint Lucia is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.  Saint Lucia is working to improve customs efficiency, modernize customs operations, and address inefficiencies in the clearance of goods.

Saint Lucia ratified the WTO Trade Facilitation Agreement (TFA) in December 2015.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate reductions in trade costs, and enhance participation in the global value chain.  Saint Lucia has already implemented several TFA requirements.

Saint Lucia bases its legal system on the British common law system, but its civil code and property law are influenced by French law.  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 matters and makes determinations on the interpretation of the constitution. Parties may appeal first to the Eastern Caribbean Supreme Court.  The final court of appeal is the Judicial Committee of the Privy Council of the United Kingdom.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001 by the Agreement Establishing the CARICOM Single Market and Economy.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In its appellate jurisdiction, the CCJ considers and determines appeals from the CARICOM member states that are parties to the Agreement Establishing the CCJ.  Currently, Saint Lucia is subject only to the original jurisdiction of the CCJ.

The United States and Saint Lucia 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.

The judicial system remains relatively independent of the executive branch of government and is free of political interference in judicial matters.

Invest Saint Lucia’s FDI policy is to actively pursue FDI in priority sectors and advise the government on the formation and implementation of policies and programs to attract sustainable investment.  Invest Saint Lucia reviews all proposals for investment concessions and incentives to ensure the projects are consistent with the national interest and provide economic benefits to the country.

Invest Saint Lucia provides “one-stop shop” facilitation services to investors to guide them through the various stages of the investment process.  Invest Saint Lucia offers a website that is useful to navigate the laws, rules, procedures, and registration requirements for foreign investors:  http://www.investstlucia.com/ .

Under Saint Lucia’s CBI program, foreign individuals may obtain citizenship in accordance with the Citizenship by Investment Act of 2015, which grants the right to citizenship by investment.  Program applicants are required to submit to a due diligence process before citizenship can be granted.  The minimum investment for a single applicant to qualify is a $100,000 contribution to the National Economic Fund.  A $190,000 contribution covers a family of four made up of the principal applicant, spouse, and up to two dependents.  Alternatively, a real estate purchase valued at $300,000 or more will also qualify.  There are also provisions for enterprise investment in approved projects and a government bond option.  In response to the Covid-19 pandemic, the unit also created a special Covid-19 Relief Bond with a minimum investment of $250,000.  This bond option is available until the end of 2022.  More information on the citizenship by investment program is available at  https://www.cipsaintlucia.com .

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM member states.  Member states are required to establish and maintain a national competition authority. CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM. Saint Lucia does not yet have legislation regulating competition. The OECS agreed to establish a regional competition body to handle competition matters within its single market.

Under the Land Acquisition Act, the government can acquire land for a public purpose.  The government must serve a notice of acquisition to the person from whom the land is acquired.  Saint Lucia employs a system of eminent domain to pay compensation in such cases.  There were no reports that the government discriminated against U.S. investments, companies, or landholdings.  There are no laws forcing local ownership in specified sectors.

There is one case of expropriation involving an American citizen-owned property. An American citizen purchased 32 acres of land in Saint Lucia in 1970. The government expropriated the land in 1985 by an act of law. The claimant has been seeking redress and those efforts have been unsuccessful to date. The government denied the claimant’s request without explanation in 2014. The government has been largely unresponsive to repeated attempts by the claimant to appeal the decision. The government also claims to have lost property records that the claimant says support their ownership claim. The U.S. Embassy in Bridgetown continues to advocate with the government to ensure the claimant is allowed to fully exercise their due process rights.

Saint Lucia has a limited bankruptcy framework that grants certain rights to debtors and creditors. The act was updated in 2020.

The Government of Saint Lucia provides incentives to encourage investment by providing tax and non-tax concessions to businesses that can add value to the country’s economic development.  Approval for incentives is granted by the Cabinet upon application, taking into consideration the type, size, scope, and employment potential of the business.

Saint Lucia’s Trade License Act, Aliens Licensing Act, International Business Companies Act, Development Incentives Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Fiscal Incentives Act, Tourism Incentives, and Tourism Stimulus and Investments Act together constitute a broad framework of incentives for foreign investors.

Except for pork and chicken, there are no requirements for an enterprise to purchase a fixed percentage of goods from local sources.  Companies purchasing chicken must purchase a minimum of 28 percent locally produced chicken.  Companies purchasing pork must purchase a minimum of 40 percent locally produced pork.

The Fiscal Incentives Act of 1974 provides for fiscal incentives to facilitate local and foreign investment in the productive sectors of Saint Lucia’s economy.  The law gives export-oriented manufacturing enterprises special consideration.  Investors may apply for incentives with the relevant ministry or ministries, providing a copy of the application to Invest Saint Lucia.  The criteria for fiscal incentive qualification are that an enterprise must be incorporated and registered in Saint Lucia; contribute to the economic development of Saint Lucia; utilize domestic human and natural resources; form linkages with other economic sectors; contribute to foreign exchange earnings; train local personnel; and introduce plant upgrades via technological transfers.

The Fiscal Incentives Act provides a list of incentives, including a tax holiday of up to 15 years for approved projects, a waiver of import duty on imported machinery and plant equipment, a waiver of import duty on imported raw and packaging materials, and an export allowance on export earnings. Under the Fiscal Incentives Act, four types of enterprises qualify for tax holidays.  The length of the tax holiday for the first three depends on the amount of value added in Saint Lucia.  The fourth type, known as enclave industry, must produce goods exclusively for export outside the CARICOM region.  The government amended the Fiscal Incentives Act in early 2020 to expand incentives offered to local businesses as a means of spurring development and investment.  The Fiscal Incentives Act now includes four subsectors of the service industry: creative industry, professional services, spa and wellness, and information and communications technology.

The standard corporate income tax rate is 30 percent.  An International Business Company (IBC) may elect either to be exempted from paying income tax or to be liable for income tax on the chargeable income of the company at the rate of 1 percent.  An IBC is not subject to stamp duties, withholding tax, or capital gains tax.  Amendments to the act passed in 2017 sought to encourage IBCs to establish headquarters in Saint Lucia by offering various incentives, including a waiver of customs duty on materials, articles, or equipment used exclusively by the company’s head office, and exemption from income tax for employees.

Various special licensing requirements apply to the acquisition of land, development of buildings, expansion of existing construction, and certain aspects of the tourism industry.  Individuals or corporate bodies who are not citizens and seek to acquire land may require a license prior to execution, depending upon the amount of land.

The Special Development Areas Act encourages investment in designated areas throughout the island. These areas include Vieux-Fort, Anse la Raye, Soufriere, Canaries, Choc Estate, and Dennery.  Special concessions offered under this law include exemption on stamp duty and import duty on inputs for the construction of new buildings and the renovation or refurbishment of existing buildings; land and house tax; stamp duty payable by vendors and purchasers on the initial purchase of property; higher tax allowances; and accelerated depreciation.  Types of businesses that may qualify for these concessions are residential complexes, commercial or industrial buildings, facilities directed towards the improvement or expansion of services to the tourism sector, water-based activities, tourism projects highlighting the heritage and natural environment of Saint Lucia, arts and cultural investments, agriculture-based activities, and fisheries-based activities.

The Tourism Incentives Act effectively provides for earnings exemption from income tax. This exemption would apply to a tourism project managed by or on behalf of a company entitled to distribute profits to shareholders or debenture holders as capital monies. The project would be free of tax during the two-year period following the end of the tax holiday.  The act also allows for customs duty exemptions and permits the duty-free importation of materials and equipment used exclusively in connection with the construction and equipping of the tourism project.  The Tourism Stimulus and Investment Act also allows for the waiver of VAT and property tax.

Saint Lucia maintains a Free Zone.  It is an enclosed area treated for customs purposes as lying outside the customs territory of the island.  Goods of foreign origin may be held pending eventual transshipment, re-exportation and, in some cases, importation into the local market without payment of customs duties.  There are various types of companies operating in the Free Zone, including distributors of appliances, furniture, household and office supplies/items; manufacturers; duty-free suppliers of liquor, cigarettes, fragrances, wines, and pharmaceuticals.

The Free Zone Act aims to promote export development and foreign investment projects in a “bureaucracy-free, duty-free, and tax-free” environment for prescribed activities.  Incentives include exemption from customs duties, taxes, and related charges on all classes of goods entering the Free Zone for commercial or operating purposes.  There are no restrictions or taxes on foreign exchange transactions and no taxes on dividends for the first 20 years of operation.  There are also no work permit fees for management personnel of Free Zone businesses, and no import or export licenses or price controls.  Finally, there is no company income tax for the first five years, and thereafter a reduced corporate income tax.  The Free Zone Act was last amended in 2018.

The Government of Saint Lucia does not mandate local employment.  However, the government expects foreign investors to add value to the local economy, which can be achieved by providing local employment.

The 2006 Labor Code provides guidelines for employment, dismissal, and payment of severance and other benefits.  It also defines permanent employment, fixed term employment, and contract for service.

The government requires all non-CARICOM citizens and companies intending to conduct business in Saint Lucia and who own more than 49 percent of the company’s shares to obtain a trade license.  The Ministry of Commerce, Manufacturing, Business Development, Cooperatives and Consumer Affairs issues trade licenses. Under the Foreign National and Commonwealth Citizens (Employment) Regulation, anyone outside OECS seeking to conduct business or be employed in Saint Lucia must apply for a work permit.  Applications are available from the Labor Department of the ministry with responsibility for labor.  There are no excessively onerous visa, residency, or work permit requirements.

While there are no formal performance requirements, the government encourages investments that create jobs and increase exports and foreign exchange earnings.  Local laws do not place any restrictions on foreign investment in Saint Lucia. Foreign investors are entitled to receive the same treatment as nationals of Saint Lucia.  Foreign investors seeking to purchase property for residential or commercial purposes must obtain an Alien Landholding License.  No sectors are officially closed to private enterprise, although some activities, such as telecommunications, utilities, broadcasting, banking, and insurance require government licenses.  There is no restriction on foreign ownership of a local enterprise or participation in a joint venture.  There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (e.g. back doors into hardware and software keys for encryption, etc.).

Civil law protects physical property and mortgage claims.  There are some special license requirements pertaining to acquisition of land, development of buildings, expansion of existing construction, and special standards for various aspects of the tourism industry. Individuals or corporate bodies who are not CARICOM nationals and who seek to acquire land must apply for and obtain an alien landholder’s license as required under the Alien Landholding Act prior to acquisition.

Saint Lucia has two primary provisions governing the protection of intellectual property rights. They are the copyrights act and the trademarks act.

Saint Lucia is a member of the ECCU.  As such, it is a member of the Eastern Caribbean Securities Exchange (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 the buying and selling of financial products for the eight member territories.  As of March 2021, there were 164 securities listed on the ECSE, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities. Market capitalization stood at $703 million (1.9 billion Eastern Caribbean dollars), representing a 6.9 percent increase from 2020.  Saint Lucia is open to portfolio investment.

Saint Lucia has 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 payments and transfers for current international transactions.  Foreign tax credit is allowed for the lesser of the tax payable in the foreign country or the tax charged under Saint Lucia tax law.  The private sector has access to credit on the local market through loans, purchases of non-equity securities, and trade credits and other accounts receivable that establish a claim for repayment.

The eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act.  The act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters.  Saint Lucia is a signatory to this agreement and the ECCB controls Saint Lucia’s currency and regulates its domestic banks.

The Banking Act is a harmonized piece of legislation across the ECCU.  The Minister of Finance usually acts in consultation with, and on the recommendation of, the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.

Domestic and foreign banks can establish operations in Saint Lucia.  The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business.  The ECCB regulates financial institutions.  As part of ongoing 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 Saint Lucia as stable.  Assets of commercial banks totaled $2.8 billion (6.4 billion Eastern Caribbean dollars) at the end of 2019.  In its latest annual report, the ECCB listed the commercial banking sector in Saint Lucia as stable. Saint Lucia is well-served by bank and non-bank financial institutions.

The Caribbean region has witnessed a withdrawal of correspondent banking services by the 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 monitor the issue.

Bitt, a Barbadian company, developed digital currency DCash in partnership with the ECCB. The first successful DCash retail central bank digital currency (CDBC) consumer-to-merchant transaction took place in Grenada in February 2021 following a multi-year development process. 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 2019. Bitt launched DCash in Saint Lucia in March 2021. In January 2022, the platform experienced a system interruption, and its operation was suspended. The platform regained full functionality at the end of March 2022 following system upgrades. Saint Lucia does not have any specific legislation to regulate cryptocurrencies.

Neither the Government of Saint Lucia, nor the ECCB (of which Saint Lucia is a member) maintains a sovereign wealth fund.

State-owned enterprises (SOEs) in Saint Lucia work in partnership with ministries or under their remit, carrying out specific ministerial responsibilities.  There are 39 SOEs in Saint Lucia operating in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.

SOEs in Saint Lucia do not generally pose a threat to investors.  The Saint Lucian government established most SOEs with the goal of creating economic activity in areas where it perceives the private sector has very little interest.  SOEs are wholly owned government entities and are headed by boards of directors to which senior management reports.  A list of SOEs in Saint Lucia is available at  http://www.govt.lc/statutory-bodies .

Saint Lucia currently does not have a targeted privatization program.

Saint Lucia’s government and citizens are known to engage in responsible business conduct.  The private sector typically engages in projects that benefit society, and support environmental, social, and cultural causes.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Saint Lucia remains susceptible to natural disasters and other effects due to climate change. Saint Lucia has developed a multi-stakeholder policy framework on the environment that focuses on climate resilience and adaptation, disaster risk reduction, protection of biodiversity, effective natural resources and environmental management through the enforcement of policies, legislation and regulations. The National Environmental Policy was amended in 2019 to lay out a coherent strategy to adopt and implement policies and regulations as it relates to hazard mitigation, climate change adaption, and developing planning processes and procedures. Saint Lucia is party to the Paris Agreement. In 2021, the government updated its Nationally Determined Contribution to the United Nations to signal its commitment to limiting the global average temperature increase and the 2030 Agenda for Sustainable Development.

Most locals and foreigners do not view corruption related to foreign business and investment as a major problem in Saint Lucia.  There are, however, isolated reports of allegations of official corruption, particularly among customs officials.  Local laws provide for access to information.  The law also requires government officials to present their financial assets annually to the Integrity Commission.  While authorities do not make public the disclosure reports filed by individuals, the commission submits a report to parliament each year.  The commission lacked the ability to compel compliance with the law, and as a result, compliance was low.

The Parliamentary Commissioner, Auditor General, and Public Services Commission are responsible for combating corruption.  Parliament can also appoint a special committee to investigate specific allegations of corruption.  The country is a party to the Inter-American Convention against Corruption and acceded to the United Nations Convention against Corruption in 2011.

Saint Lucia has laws, regulations, and penalties to combat corruption, notably the Integrity in Public Life Act of 2004.  Government agencies involved in enforcement of anti-corruption laws include the Royal Saint Lucia Police Force, the Director of Public Prosecutions, the Integrity Commission, and the Financial Intelligence Unit.

Contact at the government agency or agencies that are responsible for combating corruption:

Vacant (previous Chairman resigned in September 2021 and his successor is yet to be named)
Chairman
Integrity Commission
2nd Floor, Graham Louisy Administrative Building, Waterfront Castries, Saint Lucia
(758) 468-2187
icstlucia@gmail.com

Paul Thompson
Director
Financial Intelligence Authority
Gablewoods North P.O., Castries LC02 501, Saint Lucia
(758) 451-7126
slufia@candw.lc

Saint Lucia is considered politically stable and does not have a recent history of political violence.  Elections are peaceful and considered generally free and transparent.  The next election is constitutionally due in 2026.

There is no formal national minimum wage in Saint Lucia, though a government-appointed minimum wage commission recommended establishing a minimum wage.  The legislated workweek is 40 hours, with a maximum of eight hours per day.  Overtime hours are at the discretion of the employer and the agreement of the employee.  Pay is time-and-a-half for work over eight hours and double for work on Sundays and public holidays.  Workers paid monthly are entitled to a minimum of 14 paid vacation days after one year.  Workers paid on a daily or biweekly schedule have a minimum of 14 vacation days after 200 working days.

Special legislation covers work hours for shop assistants, agricultural workers, domestic workers, and workers in industrial establishments.  Labor laws, including occupational health and safety standards, apply to all workers whether they are in the formal or informal sectors.

Under the Foreign National and Commonwealth Citizens (Employment) Regulation, anyone outside of the OECS wanting to conduct business or be gainfully employed in Saint Lucia must apply for a work permit.  Applications can be obtained from the Labor Department, which is currently under the auspices of the Ministry Education, Innovation, Gender Relations, and Sustainable Development.

According to the World Bank, Saint Lucia had an estimated labor force of approximately 102,250 in 2020.  The most available literacy rate is of 72.8 percent (2010 census).  The local state college, which offers technical and vocational courses, meets most of the country’s technical and training needs.  There is also a pool of professionals to draw from in fields such as law, medicine, business, information technology, and accounting.  Many of the professionals in Saint Lucia trained in the United States, Canada, the United Kingdom, or the wider Caribbean, where many of them gained work experience before returning to the country.

The law, including applicable statutes and regulations, specifies the right of most workers to form and join independent unions, strike, and bargain collectively.  The law also prohibits anti-union discrimination, and workers fired for union activity have the right to reinstatement.

The law places restrictions on the right to strike by workers who provide essential services such as police and fire departments, health services, and utilities (electricity, water, and telecommunications).  Workers in these organizations must give 30 days’ notice before striking.  Once workers give notice, authorities usually refer the matter to an ad hoc tribunal set up under the Essential Services Act.  The government selects tribunal members, following rules to ensure tripartite representation.  The ad hoc labor tribunals try to resolve disputes through mandatory arbitration.  The ministry’s labor commissioner monitors violations of labor law.

The government does not effectively enforce labor laws, and there were insufficient resources for investigation and enforcement of labor standards.  The Ministry of Education, Innovation, Gender Relations, and Sustainable Development employed five labor officers (inspectors) who, due to financial constraints, focused mainly on occupational health and safety concerns.  The government sets appropriate occupational safety and health standards.

Violations of the labor code can result in fines of up to $1,371 ($3,704 Eastern Caribbean dollars) and up to two years in prison. The labor department is currently drafting updated legislation to improve enforcement.

Investors in Saint Lucia are responsible for maintaining workers’ rights and safeguarding the environment.  The Labor Commissioner settles disputes over safety issues.  Workers have the right to report or leave unsafe work environments without jeopardy to their continued employment.

* Source for Host Country Data: Eastern Caribbean Central Bank –  https://www.eccb-centralbank.org/statistics/gdp-datas/comparative-report/1 

Table 3: Sources and Destination of FDI
Data not available; Saint Lucia does not appear in the IMF’s Coordinated Direct Investment Survey (CDIS).

Table 4: Sources of Portfolio Investment
Data not available; Saint Lucia does not appear in the IMF Coordinated Portfolio Investment Survey (CPIS).

Political/Economic Section
U.S. Embassy Bridgetown, Barbados
+1 (246) 227-4000
BridgetownPolEcon@state.gov

The government of St. Vincent and the Grenadines, through Invest SVG, strongly encourages FDI, particularly in industries that create jobs and earn foreign currency.  The government is open to all investment, but is currently prioritizing investment in niche markets, particularly tourism, international financial services, agricultural processing, light manufacturing, renewable energy, scientific and medical research, creative industries, and information and communication technologies.

Invest SVG’s FDI policy is designed to attract investment into priority sectors.  It advises the government on the formation and implementation of policies and programs that attract and facilitate investment.  The government offers special incentive packages for foreign investments in the hotel industry and light manufacturing.  The government offers other incentive packages on an ad hoc basis.

There are no limits on foreign control in St. Vincent and the Grenadines, nor are there requirements for local investment or ownership in locally registered companies, although non-nationals must apply for a license from the Prime Minister’s Office to acquire more than 50 percent of a company.  An attorney must submit the application and Cabinet must approve it.  Companies holding at least five acres of land may restrict or prohibit the issue or transfer of their shares or debentures to non-nationals.

The government has not officially closed any industries to private investment, although some activities such as telecommunications, utilities, broadcasting, banking, and insurance require a government license.

The OECS, of which Saint Vincent and the Grenadines is a member, has not conducted a World Trade Organization (WTO) trade policy review since 2014. There have also not been any investment policy reviews by civil society organizations in the past five years.

Invest SVG facilitates domestic and foreign direct investment in priority sectors and advises the government on the formation and implementation of policies and programs to attract investment.  Invest SVG provides business support services and market intelligence to all investors.  It also reviews all investment projects applying for government incentives to ensure they conform to national interests and provide economic benefits to the country.  Its website is  http://www.investsvg.com .  In addition to its website, the country 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://theiguides.org/public-docs/guides/saintvincentandthegrenadines .

The general practice is to retain an attorney to prepare all incorporation documents.  Local laws dictate that a business must register with the Commerce and Intellectual Property Office (CIPO), the Ministry of Trade, the Inland Revenue Department, and the National Insurance Service.  The CIPO has an online information portal that describes the steps to register a business in St. Vincent and the Grenadines.  There is no online registration process, but the required forms are available online.  These must be printed and submitted to the CIPO.  More information is available at  http://www.cipo.gov.vc .

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

St. Vincent and the Grenadines has not signed a bilateral investment treaty with the United States.  The country, however, has bilateral tax treaties with the United States, Canada, the UK, Denmark, Norway, Sweden, and Switzerland.   In 1989, Germany and St. Vincent and the Grenadines signed a treaty for the Encouragement and Reciprocal Protection of Investment.  In 2018, St. Vincent and the Grenadines and the UAE concluded an Agreement on the Avoidance of Double Taxation on Income and an Agreement for the Promotion and Protection of Investments.  St. Vincent and the Grenadines is also party to the following economic communities and organizations:

Caribbean Community

The Treaty of Chaguaramas established the Caribbean Community (CARICOM) in 1973.  Its purpose is to promote economic integration among its 15 member states.  Investors operating in St. Vincent and the Grenadines have preferential access to the entire CARICOM market.  The Revised Treaty of Chaguaramas (RTC) established 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.

Organization of Eastern Caribbean States

The Revised Treaty of Basseterre established the OECS.  The OECS consists of seven full members (Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines), and three associate members (Anguilla, Martinique, and the British Virgin Islands).  Guadeloupe signed an accession agreement to the OECS in 2019.  The purpose of the Treaty is to promote harmonization among member states in foreign policy, defense and security, and economic affairs.  The six independent countries and Montserrat ratified the Revised Treaty of Basseterre establishing the OECS Economic Union, which entered into force in 2011.  The Economic Union established a single financial and economic space within which goods, services, and people move without hindrance.

CARIFORUM-EU Economic Partnership Agreement

The Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) and the European Community signed an Economic Partnership Agreement (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 EPA promotes trade-related developments in areas such as competition, intellectual property, public procurement, the environment, and the protection of personal data.

CARIFORUM-UK Economic Partnership Agreement

The UK and the CARIFORUM states signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union.  The CARIFORUM-UK EPA eliminates all tariffs on all goods imported from CARIFORUM states into the UK, while those Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.

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 imports.  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 St. Vincent and the Grenadines 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 most products originating in Commonwealth Caribbean countries.

St. Vincent and the Grenadines uses transparent policies and laws to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  Accounting, legal, and regulatory practices are generally transparent and consistent with international norms.  The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the profession in St. Vincent and the Grenadines.

Rulemaking and regulatory authority rests in the unicameral House of Assembly, which has fifteen elected members and six appointed senators who sit for a five-year term.  The Public Accounts Committee and Director of Audits ensure the government follows administrative processes.

National laws govern all regulations relating to foreign investment.  Ministries develop these laws, and the Ministry of Legal Affairs drafts them.  Laws pertaining to Invest SVG also govern FDI.  Invest SVG has the main responsibility for investment supervision, while the Ministry of Economic Planning, Sustainable Development, Industry, Information, and Labor tracks investments to collect information for national statistics and reporting purposes.

The government publishes most draft bills in local newspapers for public comment.  In addition, the government circulates bills at stakeholder meetings.  Some bills and laws are published on the government website at  www.gov.vc .  The government sometimes establishes a select committee to suggest amendments to specific draft bills.  In some instances, these mechanisms may also apply to investment laws and regulations.  There is no obligation for the government to consider proposed amendments prior to implementation.  The government discloses information on public finances and debt obligations.  The annual budget address can be found online.

The country’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.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.  The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found St. Vincent and the Grenadines to be largely compliant.  The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.

Local laws dictate that an external company must be registered with the Commercial Registry in St. Vincent and the Grenadines if it wishes to operate in the country.  Companies using or manufacturing chemicals must first obtain approval of their environmental and health practices from the St. Vincent and the Grenadines National Standards Institution and the Environmental Division of the Ministry of Health.

As a member of the OECS and the ECCU, St. Vincent and the Grenadines subscribes to a set of 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, the country must implement regionally developed regulations, such as legislation passed under the OECS Authority, unless it seeks specific concessions not to do so.

The country’s Bureau of Standards is a statutory body which prepares and promulgates standards in relation to goods, services, processes, and practices.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, St. Vincent and the Grenadines must harmonize all national standards to international norms to avoid creating technical barriers to trade.

St. Vincent and the Grenadines ratified the WTO Trade Facilitation Agreement (TFA) in 2017 and subsequently notified its Category A measures.  Included in the Trade Facilitation Agreement are measures to improve risk management techniques and a post-clearance audit system to eliminate delays and congestion at the port.  While St. Vincent and the Grenadines has implemented some TFA requirements, it has missed two implementation deadlines.  A full list of measures undertaken pursuant to the TFA is available at  https://tfadatabase.org/members/saint-vincent-and-the-grenadines .

The country’s legal system is based on the British common law system.  The constitution guarantees the independence of the judiciary.  The judicial system consists of lower courts, called magistrates’ courts, and a family court.  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 constitutional matters.  Parties may appeal first to the Eastern Caribbean Supreme Court, a court that hears appeals from all OECS members.  The final court of appeal is the Judicial Committee of the UK Privy Council.

The country has a strong judicial system that upholds the sanctity of contracts and prevents unwarranted discrimination towards foreign investors.  The government treats foreign investors and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.  The police and court systems are generally unbiased in commercial matters.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  St. Vincent and the Grenadines is only subject to the original jurisdiction of the CCJ.

The United States and St. Vincent and the Grenadines 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.

Invest SVG provides guidance on the relevant laws, rules, procedures, and reporting requirements for investors.  Invest SVG has the authority to screen and review FDI projects.  The review process is transparent and contingent on the size of capital investment and the project’s projected economic impact.  The investor must complete a series of steps to obtain a business license.  These steps are listed at  http://www.investsvg.com .  All potential investors seeking an incentive package must submit their proposals for review by Invest SVG to ensure the project is consistent with the nation’s laws and interests and would provide economic benefits to the country.

Local enterprises generally welcome joint ventures with foreign investors to access technology, expertise, markets, and capital.

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 to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  There is no legislation to regulate competition in St. Vincent and the Grenadines.

Under the Land Acquisition Act, the government may acquire land for a public purpose.  The government must serve a notice of acquisition to the person from whom the land is acquired.  A Board of Assessment determines compensation and files its award in the High Court.  The value of the land is based on the amount for which the land would be sold on the open market by a willing seller.  Under the Alien’s (Land-Holding Regulation) Act, the government can hold properties forfeit without compensation if the terms of investment are not met.  The U.S. Embassy is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in St. Vincent and the Grenadines.

The Bankruptcy and Insolvency Act governs the country’s bankruptcy framework and grants certain rights to debtors and creditors.

Through the Fiscal Incentives Act, St. Vincent and the Grenadines offers many incentives to investors and provides the necessary information on the laws, criteria, and application procedures to qualify for these incentives.

The list of incentives includes exemption from or reduction of duty payments on the importation or purchase of materials and other equipment for use in construction and operation of the business.  Other incentives are the exemption from or a reduction of duty on the importation or purchase of vehicles for use in operation of the business, and a reduction of property tax of up to ten percent for land and buildings used in the operation of the business.

The government also provides tax holidays as an investment incentive.  Group I enterprises (50 percent or more local value added) enjoy a 15-year tax holiday; Group II enterprises (25 to 49 percent local value added) are granted 12 years; Group III enterprises (10 to 24 percent local value added) receive ten years.  Enclave enterprises (producing wholly for markets outside of CARICOM) enjoy a 15-year tax holiday.  The Industry Unit under the Ministry of Finance, Economic Planning, Sustainable Development, and Information Technology administers this act.  These fiscal incentives may be granted to manufacturing and processing companies producing “Approved Products.”  Companies must apply to the Cabinet to become “Approved Enterprises” producing such products.  Local value is determined by the percentage of annual sales not contributed by imported materials and services, non-CARICOM national labor, profits, and other income payments distributed to members outside of CARICOM, and depreciation on imported machinery and equipment.  Tax holidays are also granted to capital-intensive industries investing at least $9.25 million (25 million Eastern Caribbean dollars).

Local laws dictate that companies must meet export performance requirements to take advantage of certain tax incentives.  For example, enclave enterprises must produce goods exclusively for export outside the CARICOM region.  Foreigners may finance investments using domestic or foreign capital sources.  The Fiscal Incentives Act confers income tax credits in the form of export allowance to qualifying enterprises for the export of approved products.

In the tourism sector, the Hotels Aid Act provides incentives for the renovation, refurbishment, and expansion of existing hotels and for the construction of new hotels.  Concessions for expansions of not less than five guest rooms are also available.  The Ministry of Tourism administers the act.

The corporate tax rate ranges from 15 to 30 percent, except for companies granted tax holidays under the Fiscal Incentives Act.  Companies manufacturing goods for local or export markets and which have maintained a special account conforming to Comptroller of Inland Revenue requirements have access to reduced tax rates.  Offshore businesses are also subject to value added tax (VAT) on taxable goods imported into St. Vincent and the Grenadines.  VAT is 16 percent.  An international company may import machinery and equipment free from certain taxes and custom duties if the imports are capital goods to be used in a company’s business.

The government recognizes trusts if they are in writing and follow the formal requirements for a deed or settlement under the International Trust Act.  The act recognizes several types of international trusts: protective or spendthrift trusts, charitable trusts, and purpose trusts.  A Registrar of Trusts has direct regulatory responsibilities relating to registration, certificate issuance, and review of trust documentation.  At least one trustee must be registered and licensed for an international trust to be registered.  The government confers certain benefits on registered trusts, including exemptions from various taxes and duties provided the settler was not insolvent at the time the trust was created or did not become insolvent because of the creation of the trust.  The exemptions include income tax, excise tax, customs duties, and stamp duty exemptions.  These are applicable if certain conditions are met, one of which being that the trust must not be domiciled in the country.  The Comptroller of Inland Revenue is empowered to assess a trust’s eligibility for tax exemptions and may require the registered trustee to provide financial information.

According to the Trust Act, if at least one beneficiary of a registered trust becomes a resident after the trust is registered, and if the trust is in good standing, the fact of the residency of the beneficiary will not invalidate the trust.  Neither the trust nor its beneficiaries will be entitled to tax exemptions for any year during which the trust had one or more resident beneficiaries.  An international trust, except one that is an international company, will not become void or voidable due to a settler’s bankruptcy, insolvency, or liquidation, the law of the settler’s domicile or ordinary residence notwithstanding.

While there is no formal legislation in relation to incentives in the information and telecommunications sector, commercial presence and establishment is at the discretion of the Cabinet on advice from the National Telecommunications Regulatory Commission.

The Export Free Zones Act of 1999 provides for the designation or establishment of export free zones, which allow for the duty-free import of inputs for processing and export.  While allowable under law, there are no foreign trade zones or free trade zones in St. Vincent and the Grenadines.

The government does not mandate local employment.  The Employment of Foreign Nationals and Commonwealth Citizens Act provides foreign nationals or Commonwealth citizens must obtain valid work permits.  The ministry responsible for national security oversees work permit applications.  The government may modify or cancel work permits after a seven-day notice if the holder fails to comply with the conditions of the permit.

There is no requirement that enterprises purchase a fixed percentage of goods from local sources.  There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (back doors into hardware and software keys for encryption, etc.).  The country has not adopted any specific data protection legislation.

The Aliens’ Land Holding Act regulates the holding of land and mortgages related to land by individuals who are non-nationals and companies controlled by non-nationals.  Non-nationals must apply for and be granted a license to hold land.  The breach of any condition of the license authorizes forfeiture to the government of the interest held by the non-national.  License conditions may require that land be developed within a specific timeframe.  Non-nationals must use a locally licensed attorney to apply for a land license. The applications are processed through the office of the Prime Minister. If approved, the non-national must file the license at the Registry of the High Court.  The Registry collects all applicable registration fees and stamp duties.

St. Vincent and the Grenadines has a legislative framework protecting intellectual property rights (IPR).  While legal structures governing IPR are adequate, enforcement measures are inconsistent.  The administration of IPR laws is the responsibility of the Office of the Attorney General.  The CIPO administers the registration of patents, trademarks, and service marks.  St. Vincent and the Grenadines is signatory to the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works.  It is also a member of the UN World Intellectual Property Organization and is a signatory to its treaties.  St. Vincent and the Grenadines is not listed in the U.S. Trade Representative’s 2022 Special 301 Report or in its 2021Review of Notorious Markets for Counterfeiting and Piracy.

Article 66 of the Revised Treaty of Chaguaramas establishing the CSME commits all 15 members to implement stronger intellectual property protection and enforcement.  The EPA between CARIFORUM states and the European Community contains the most detailed obligations with respect to intellectual property in any trade agreement to which St. Vincent and the Grenadines is a party.  The EPA recognizes the protection and enforcement of intellectual property.  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).”

The Enforcement Division of the Customs and Excise Department spearheads the preventative and enforcement aspects of IPR protection, which includes the detention, seizure, and forfeiture of counterfeit goods.  The Enforcement Division also conducts investigations of customs offenses and administers fines and penalties.

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/ .

St. Vincent and the Grenadines is a member of the ECCU.  As such, it is also a participant on the Eastern Caribbean Securities Exchange (ECSE) and the Regional Government Securities Market.  The ECSE is a regional securities market established by the ECCB and regulated by the Eastern Caribbean Securities Regulatory Commission.  The Securities Act of 2001 regulates activities on the ECSM.

The ECSE and its subsidiaries, the Eastern Caribbean Central Securities Depository and the Eastern Caribbean Central Securities Registry, facilitate activities on the ECSE.  The main activities are the primary issuance and secondary trading of corporate and sovereign securities, the clearance and settlement of issues and trades, maintaining securities holders’ records, and providing custodial, registration, transfer agency, and paying agency services while respecting listed and non-listed securities.  As of March 2021, there were 164 securities listed on the ECSE, comprising 140 sovereign debt instruments, 13 equities, and 11 corporate debt securities. Market capitalization stood at $703 million (1.9 billion Eastern Caribbean dollars), representing a 6.9 percent increase from 2020.   St. Vincent and the Grenadines is open to portfolio investment.

St. Vincent and the Grenadines 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.  St. Vincent and the Grenadines does not have a credit bureau.

Eight participating governments passed the Eastern Caribbean Central Bank Agreement Act.  The act provides for the establishment of the ECCB, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves, and other related matters.  St. Vincent and the Grenadines is a signatory to this agreement.  Therefore, the ECCB controls the country’s currency and regulates its domestic banks.

The Banking Act 2015 is a harmonized piece of legislation across all 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 St. Vincent and the Grenadines.  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 St. Vincent and the Grenadines as stable.  Assets of commercial banks totaled $833 million (2.25 billion Eastern Caribbean dollars) at the end of December 2019.  The reserve requirement for commercial banks was six percent of deposit liabilities.

The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S., Canadian, and European banks due to risk management concerns.  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.

Bitt, a Barbadian company, developed digital currency DCash in partnership with the ECCB. The first successful DCash retail central bank digital currency (CDBC) consumer-to-merchant transaction took place in Grenada in February 2021 following a multi-year development process. 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 2019. Bitt launched DCash in St. Vincent and the Grenadines in August 2021. In January 2022, the platform experienced a system interruption, and its operation was suspended. The platform regained full functionality at the end of March 2022 following system upgrades.  St. Vincent and the Grenadines does not have any specific legislation to regulate cryptocurrencies.

Neither the government of St. Vincent and the Grenadines nor the ECCB, maintains a sovereign wealth fund.

There are several state-owned enterprises (SOEs) operating in the following sectors: water, transportation, housing, transportation (ports), electricity, tourism, information and communication, telecommunications, investment and investment services, financial services, fisheries, agriculture, sports and culture, civil engineering, and infrastructure.

SOEs in St. Vincent and the Grenadines are wholly owned government entities.  They are headed by boards of directors to which senior managers report.  They are governed by their respective legislation and do not generally pose a threat to investors, as they do not have a mandate to compete with private-sector companies.  There is no single published list of SOEs, though information about individual SOEs is available.

There are no targeted privatization programs in St. Vincent and the Grenadines.

The government and the public view responsible business conduct positively.  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 employees of local and foreign-owned enterprises volunteer and when companies 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 sometimes partners with NGOs and generally encourages philanthropy.

There are no alleged or reported human or labor rights concerns relating to responsible business conduct of which foreign businesses should be aware.

St. Vincent and the Grenadines is not a signatory of the Montreux Document on Private Military and Security Companies or a participant in the International Code of Conduct for Private Security Service Providers’ Association.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Saint Vincent and the Grenadines remains susceptible to natural disasters and other effects due to climate change. Saint Vincent and the Grenadines has developed a multi-stakeholder policy framework on the environment that focuses on climate resilience and adaptation, disaster risk reduction, protection of biodiversity, effective natural resources, and environmental management through the enforcement of policies, legislation, and regulations. The National Economic, Social and Development Plan seeks to address sustainable national development and is working toward integrated climate change adaptation. The National Adaptation Plan seeks to fulfill the government’s UN obligations and integrate all policies, programs and activities as it relates to climate change. Saint Vincent and the Grenadines is party to the Paris Agreement.

The law provides criminal penalties for official corruption, and the government generally implements these laws.  St. Vincent and the Grenadines is a signatory to the Inter-American Convention Against Corruption, but not to the UN Anti-Corruption Convention.

The Director of Public Prosecutions has the authority to prosecute a number of corruption-related offenses.  Corruption allegations are investigated by the Royal St. Vincent and the Grenadines Police Force.  There is generally no statutory standard obligation for public officers to disclose financial information to a specific authority.  If confiscation proceedings are initiated or contemplated against a corrupt official, the courts can order disclosure of financial information.  The Financial Intelligence Unit has the authority to conduct financial investigations with a court order.

The law also provides for public access to information.  Only a narrow list of exceptions outlining the grounds for nondisclosure exists, but there is no specific timeline for relevant authorities to make the requested response or disclosure.  There are no criminal or administrative sanctions for not providing a response and there is no appeal mechanism for review of a disclosure denial.

Sejilla McDowall
Director of Public Prosecutions
Office of Public Prosecutions
Frenches Gate, Kingstown
Telephone: 784-457-1344
Email:  dppsvg@vincysurf.com

Colin John
Commissioner of Police
Royal St. Vincent and the Grenadines Police Force
Kingstown
Telephone: 784-457-1211
Email:  svgpolice@gmail.com

St. Vincent and the Grenadines 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 in 2025.

According to the World Bank, St. Vincent and the Grenadines had an active labor force of approximately 54,945 persons in 2020.  The government generally enforces labor laws, and penalties are sufficient to deter violations.  The law, including related regulations and statutory instruments, provides for the rights of workers to form and join unions of their choice, bargain collectively, and conduct legal strikes.  The law also provides that it is lawful to conduct peaceful picketing in contemplation of a trade dispute.  Trade unions and leaders of the trade union movement enjoy a strong voice in the labor and economic affairs of the country.

The law prohibits antiunion discrimination and dismissal for engagement in union activities.  Although the law does not require reinstatement of workers fired for union activity, a court may order reinstatement.

The International Labor Organization has noted with concern the discretionary authority of the government over trade union registration, and the government’s unfettered authority to investigate the financial accounts of trade unions.

The Trade Disputes (Arbitration and Inquiry) Act Chapter 215 provides for establishment of an arbitration tribunal and a board of inquiry in connection with trade disputes and allows provision for the settlement of such disputes.  Labor unions and businesses are generally satisfied with the arbitration panels, which have tripartite representation.  One of the mandates of the Department of Labor is to serve as a dispute resolution mechanism.

The Wages Council Act establishes the Wages Council, which addresses minimum wages, hours of work, overtime, vacation, sick leave, and maternity leave for specified categories of workers.  Employers who fail to pay minimum wages are subject to orders for the payment of the wages.  The statutory minimum wages are set out in regulations under the Wages Council Act.  The hours of work for specified categories of workers are usually eight hours per day with overtime generally calculated at a rate of time and a half and double time for work done on Sundays and public holidays.

The Equal Pay Act makes provision for the removal and prevention of discrimination, based on the sex of the employee, in the rates or remuneration for males and females in paid employment.  Teachers, police officers, public servants, the Medical Association, industrial workers, and some members of the private sector, especially in financial services, operate under collective bargaining agreements.

The Protection of Employment Act No. 20 of 2003 allows for severance.  Article 27 (1) allows employees to ask that their services be deemed as severed after six weeks of being laid off from work.  There is typically no unemployment insurance or other social security safety net programs for workers laid off for economic reasons.  The government, however, offered limited cash grants to some workers whose employment was impacted by the layoffs related to the COVID-19 pandemic.

The law provides for a minimum working age of 16.  This provision is generally observed in practice.  Compulsory primary and secondary education policies reinforce minimum age requirements.  The Labor Department has a small cadre of labor inspectors who conduct spot investigations of enterprises and checked records to verify compliance with the labor laws.  These inspectors may refer cases to the police and the public prosecutor’s office for legal action against an employer who employs underage workers.

Investors in the country are responsible for maintaining workers’ rights and safeguarding the natural environment.  Workers have the right to report and/or leave unsafe work environments without risking their continued employment.

* Source for Host Country Data: Eastern Caribbean Central Bank https://eccb-centralbank.org/statistics/dashboard-datas/ 

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

Table 4: Sources of Portfolio Investment
Data not available.

Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
Telephone Number:  +1 246 –227 4000
Email Address:  BridgetownPolEcon@state.gov

The government encourages FDI, particularly in the tourism and financial services sector. The National Investment Policy (NIP) and the Commercial Enterprises Act (CEA) encourage foreign investment in the following sectors of the economy: tourism; international business centers; aircraft and maritime services; marinas; information and data processing; information technology services; light industry manufacturing and assembly; agro-industries; aquaculture; food and beverage processing; banking and other financial services; offshore medical centers and services; e-commerce; arbitration; international arbitrage; computer programming; software design and writing; bioinformatics and analytics; and data storage and warehousing.

After the September 2021 elections, the new administration established the Ministry of Tourism, Investments and Aviation headed by the Deputy Prime Minister. This new ministry is charged with promoting the tourism sector and driving economic development with investments in non-traditional sectors. The new administration stressed its commitment to an investment-friendly environment and touted plans to diversify the economy through targeted investments in non-traditional sectors such as light manufacturing, technology, agriculture and fisheries, extractive industries, and renewable energy. Since taking office, the government has also shown its willingness to engage investors from relatively untapped markets, such as the Middle East.

Operating from the Office of the Prime Minister, the Bahamas Investment Authority (BIA) ( www.bahamas.gov.bs/bia ) administers investment policies, functions as the investment facilitation agency, and assists investors in navigating the sometimes-cumbersome approvals process. All foreign investors must apply for BIA approval. If operating in Grand Bahamas’ free port area, investors must seek approval from Invest Grand Bahama, the investment arm of the Grand Bahama Port Authority (GBPA) – a privately owned organization that oversees the city of Freeport. Newly elected administrations consistently support investment and generally honor agreements made by previous administrations.

The Bahamas reserves the following 15 sectors of the economy for Bahamian investors: wholesale and retail operations (although international investors may engage in the wholesale distribution of any product they produce locally); agencies engaged in import or export; real estate agencies and domestic property management; domestic newspapers and magazine publications; domestic advertising and public relations firms; nightclubs and restaurants except specialty, gourmet, and ethnic restaurants, and those operating in a hotel, resort or tourist attraction; security services; domestic distribution of building supplies; construction companies except for special structures requiring foreign expertise; personal cosmetic or beauty establishments; commercial fishing including both deep water fishing and shallow water fishing of crustaceans, mollusks, fish, and sponges; auto and appliance services; public transportation including boat charters; and domestic gaming. The government does make exceptions, and the Embassy is aware of several cases in which it granted foreign investors full market access.

The government does not give preferential treatment to investors based on nationality, and investors have equal access to incentives, including land grants, tax concessions, and direct marketing and budgetary support. The government provides guidelines for investment through the National Investment Policy (NIP), administered by the BIA, and through the Commercial Enterprises Act (CEA), administered by the Ministry of Economic Affairs. The CEA provides incentives to domestic and foreign investors to establish specific projects, including approval of work permits for senior posts and the expedited issuance of work permits.

The National Economic Council (NEC) must grant special approval for foreign investment projects valued at $10 million or more, those with national security implications, or those that require environmental and economic impact assessments. The NEC is comprised of government ministers, including the Prime Minister in his dual role as the Minister of Finance. The approval process generally requires review by multiple government agencies and a BIA recommendation prior to NEC consideration.

Bureaucratic impediments are not limited to the NEC approvals process. The country continues to lag behind on international metrics related to starting a business, registering property, acquiring construction permits, accessing credit, and resolving property disputes. Significant delays in the approvals process have occurred, including cases where the government failed to respond to investment applications.

To fast-track FDI and mobilize local investments the new administration is establishing the independent agency Bahamas Invest. Bureaucratic delays, functionality, and transparency are expected to improve under this new agency. Investment priorities are likely to include public-private partnerships, tourism, infrastructure, technological upgrades, renewable energy investments, and climate adaptability projects. Bahamas Invest will include a Domestic Investment Board to support Bahamian businesses and an Investment Compliance Unit to ensure international investors comply with government statutes. BIA will serve as the investment promotion arm of Bahamas Invest.

Foreign investors have the right to establish private enterprises and most companies operate unencumbered once approved. Key considerations for approval include economic impact, job creation, infrastructure development, economic diversification, environmental protection, and corporate social responsibility. With the assistance of a local attorney, investors can create the following types of businesses: sole proprietorship, limited or general partnership, joint stock company, or subsidiary of a foreign company. The most popular all-purpose vehicles for foreign investors are the International Business Company (IBC) and the Limited Duration Company (LDC). Both benefit from income, capital gains, gift, estate, inheritance, and succession tax exemptions. Investors are required to establish a local company and register to operate in The Bahamas.

A Beneficial Ownership Registry established in 2021 requires legal entities (defined as companies incorporated, continued, or registered in The Bahamas) to file beneficial ownership information with the Registrar General within 15 days of identifying any person as a beneficial owner of that legal entity. Investment screening mechanisms assess the creditworthiness of principals, capital investment, land and personnel requirements, financial arrangements, and economic and environmental impacts. It is not clear if national security risks are assessed.

The Bahamas is the only Western Hemisphere country not in the WTO, and therefore has never benefitted from a WTO trade policy review. None of the OECD, UNCTAD, or the UN Working Group on Business and Human Rights have conducted investment policy reviews.

In April 2020, the government appointed an Economic Recovery Committee (ERC) to recommend policies to addresses the economic impact of the COVID-19 pandemic. The public-private coalition recommended significant changes to the investment landscape. The ERC’s full report can be accessed via https://opm.gov.bs/economic-recovery-committee-executive-summary-report-2020/ .

In 2017, The Bahamas government streamlined the process to start a business with the launch of an e-business portal. The new process allows companies to apply for or renew their business licenses online from the Department of Inland Revenue ( http://inlandrevenue.finance.gov.bs/business-licence/copy-applying-b-l/ ). The government claims approvals are normally granted within seven working days, provided all required information and documentation has been submitted correctly.

Foreign owned companies must provide evidence of BIA approval when applying for business licenses. Foreign companies and most larger businesses, regardless of national affiliation, are not eligible for provisional licenses, expedited renewals, or new business license fee exemptions.

All companies with an annual turnover of $100,000 or more are required to register with the government to receive a Tax Identification Number and a Value Added Tax Certificate. The lengthy registration process is generally viewed as an impediment to the ease of doing business.

The Bahamas government neither promotes nor prohibits its citizens from investing internationally, however, all outward direct investments by residents require the prior approval of the Exchange Control Department of the Central Bank of The Bahamas ( https://www.centralbankbahamas.com/exchange-control-notes-and-guidelines ). The Central Bank considers the probable impact an investment could have on The Bahamas’ balance of payments, specifically business activities that promote the receipt of foreign currency.

In an effort to maintain adequate foreign reserves during the pandemic, the Central Bank suspended purchases of foreign currency on May 4, 2020 for transactions that could jeopardize the country’s ability to maintain a fixed, one-to-one exchange rate with the U.S. dollar. The Central Bank also suspended investments in U.S.-dollar denominated funds. The Central Bank began reauthorizing these investments on October 1, 2021 after the country’s foreign reserves stabilized.

The Bahamas has no bilateral investment agreements but has signed tax information exchange agreements with 34 countries, including the United States in 2002. The agreement designates The Bahamas as a qualified jurisdiction and provides U.S. companies tax credits for conventions and related corporate expenses. Tax information exchange agreements signed to date can be accessed via https://www.bahamas.gov.bs/wps/portal/public/International%20Agreements .

The Bahamas was the first country in the Caribbean region to sign the Foreign Account Tax Compliance Agreement (FATCA) with the United States. Since September 2015, The Bahamas has implemented a non-reciprocal, inter-governmental agreement (Model 1B) to satisfy the obligations of the agreement. Additionally, in January 2017, the government implemented the OECD-developed Common Reporting Standard (CRS) through the Automatic Exchange of Financial Account Information Act and has activated exchange relationships with 63 partners ( www.taxreporting.finance.gov.bs/ ).

The Bahamas is a signatory to the 2008 Economic Partnership Agreement between the Caribbean Forum (CARIFORUM) and the European Union, and the 2019 Economic Partnership Agreement between CARIFORUM and the United Kingdom. Both agreements provide for the asymmetric liberalization of trade in goods and services between CARIFORUM and the other signatories and include specific commitments on investments and trade-in services. The Bahamas has not yet ratified either trade agreement, but provisionally applies both.

The Bahamas is a member of the Caribbean Community (CARICOM) but does not participate in the single market, single economy, or the customs union. The Bahamas does not have a free trade agreement with the United States but is a signatory to the US-CARICOM Trade and Investment Framework Agreement (2013).

The Bahamas’ accounting, legal, and regulatory systems are generally consistent with international norms. The Bahamas has no equivalent to the U.S. Federal Register, but the government regularly updates its website ( www.bahamas.gov.bs ) to list draft legislation, bills before parliament, and its legislative agenda. Proposed legislation is available at the Government Publications Office, and public and private sector engagement is usually encouraged. Public consultation on investment proposals is not required by law. The Embassy is unaware of any informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations that restrict foreign participation in the economy.

Throughout 2021, the government passed legislation to improve the country’s fiscal governance and enhance transparency and accountability. The Public Debt Management Act (2021) enshrines debt management policies into law and improves central government and state-owned enterprise (SOE) debt transparency. The Public Finance Management Act (2021) expands budgetary and fiscal reporting requirements for central government and SOEs. The Statistics Act (2021) transforms the current Department of Statistics into a quasi-independent National Statistics Institute. The Public Procurement Act (2021) brings transparency and accountability to government tenders and contracts. Only the Statistics Act has been fully implemented. In late 2021, the new administration confirmed its intention to amend these laws, as well as the Fiscal Responsibility Act passed in 2018. The Embassy is not aware of a timeline for the proposed amendments, which skeptics argue could stymie the original intent of enacting an ambitious transparency regime.

Although efforts have been made to meet international best practices, The Bahamas’ supreme audit institution, the Office of the Auditor General, has not published a timely government budget audit report for several years. The last publicly available audit covers fiscal year 2018/2019. The U.S. Global Accountability Office is assisting the Office of the Auditor General to identify ways to fulfill its reporting obligations.

The government made key budget documents publicly available, including the executive budget proposal, enacted budget, and end of fiscal year report. The government also submitted a Supplementary Budget following elections in September 2021. Budget documents include estimates of revenue and expenditure (including estimates from prior years), the budget communication (the budget speech), appropriation bills, tax bills, resolutions, and proposed legislative changes. The government also publicizes information on debt obligations, including that of SOEs, during the annual budget submissions to the Parliament. Budget documents are available at www.bahamas.gov.bs  and www.bahamasbudget.gov.bs .

The Bahamas is not a member of the WTO, so it does not notify the WTO Committee on Technical Barriers to Trade (TBT) of draft technical regulations. As part of WTO accession negotiations relaunched in 2018, The Bahamas announced it is reviewing investment policies with the aim of developing comprehensive, WTO-compliant investment legislation. However, the Embassy is not aware of significant progress in this area in 2021. The Bahamas is not a member of UNCTAD’s international network of transparent investment procedures.

The Bahamas Bureau of Standards and Quality (BBSQ), launched in 2016, governs standards for goods and services, particularly metrology (weights and balances). BBSQ also cooperates with other ministries on quality standards, such as sanitary and phytosanitary standards with the Ministry of Agriculture and Marine Resources and the Bahamas Health and Food Safety Agency (BAHFSA). BBSQ serves as the country’s focal point on trade barrier issues and has received technical support on the development of national standards from the EU and the Caribbean Regional Organization for Standards and Quality (CROSQ). Trade barriers are not a hindrance to trade with the United States, and U.S. products are widely accepted.

The Bahamas legal system is based on English common law and foreign nationals are afforded full rights in legal proceedings. Contracts are legally enforced through the courts, however, there are some instances where civil disputes get tied up in the court system for years. Throughout 2020 and 2021, a U.S. investor and a government utility company were engaged in a civil dispute concerning the termination of a contract, non-payment for services provided, and ownership of equipment and materials. This case was settled in late 2021 with the local courts awarding the U.S. investor full payment and retention of its equipment.

The judiciary is independent, and allegations of government interference in the judicial process are rare. With the recommendation of the Prime Minister, the Governor General appoints the highest-ranking officials in the judicial system, including the Chief Justice of the Supreme Court, the Attorney General, the Director of Public Prosecutions, and the President of the Court of Appeals. The Bahamas is a member of the Commonwealth of Nations and uses the Privy Council Judicial Committee in London as the final court of appeal for civil and criminal matters.

The Bahamas continues to advance efforts to develop its reputation as a center for international arbitration by drafting legislation, namely the International Commercial Arbitration Bill (2021) which updates the Arbitration Act (2009). The Bill governs domestic arbitration and incorporates key provisions of the Model Law of the United Nations Commission on International Trade Law (UNCITRAL). The legislation has not yet passed. In 2020, The Bahamas also established an Alternative Dispute Resolution unit, and developed a two-year strategic plan to promote this method for settling commercial and other types of disputes.

Judgments by British courts and select Commonwealth countries can be registered and enforced in The Bahamas under the Reciprocal Enforcement of Judgments Act. Court judgments from other countries, including those of the United States, must be litigated in local courts and are subject to local legal requirements. The government is taking steps to modernize the justice system and increase judicial transparency and efficiency. Efforts throughout 2021 included implementation of an Integrated Case Management System, a Court Automated Payment System, Digital Court Reporting and Bail Management Systems, the launch of a Digitization Unit, and the expansion of the Bahamas Judicial Education Institute. The Court Services Bill (2020) has not yet been debated or enacted. This law would give the courts more autonomy and control over their administrative, financial, and operational affairs. There has been little movement on the construction of a new Supreme Court complex.

While some public pronouncements have been made on FDI policies, no major laws, regulations, or judicial decisions have been passed since publication of the 2021 Investment Climate Statement. The government has drafted a Foreign Investment Bill purported to codify the existing National Investment Policy, align with international investment best practices, and bring additional transparency, accountability, and predictability to the country’s foreign investment process. The Embassy is not aware of efforts to advance this bill in 2021.

The government committed to establishing Bahamas Invest – a new, autonomous agency to oversee a modern investment regime and fast-track investments. Bahamas Invest remains in the planning stages.

All relevant laws, rules, procedures, and reporting requirements for investors can be found on the website of the Bahamas Investment Authority (BIA) ( www.bahamas.gov.bs/bia ).

The Utilities Regulation and Competition Authority (URCA) regulates and imposes antitrust restrictions in the telecommunications and energy sectors. However, there is no legislation governing competition or anti-trust. A Competition (antitrust) Bill was drafted in 2018 in line with The Bahamas’ CARIFORUM-EU obligations and WTO accession requirements. Initial public consultations were held in August 2018. The Embassy is not aware of efforts to advance the Bill in 2021.

Property rights are protected under Article 27 of the country’s constitution, which prohibits the deprivation of property without prompt and adequate compensation. There have been compulsory acquisitions of property for public use, but in all instances, there was satisfactory compensation at fair market value.

The March 2020 Emergency Power (COVID-19) Regulations granted the government authorization to requisition any building, ship, aircraft, or article if it is reasonably required for any statutory purpose for the duration of the emergency. At the conclusion of the requisition, the government was to make prompt and adequate compensation to the owner. The Embassy is not aware of any instance in 2021 where the government invoked this law. The Emergency Power Regulations expired with the cancelation of the state of emergency in October 2021.

Company liquidations, voluntary or involuntary, proceed according to the Companies Act. Liquidations are routinely published in newspapers in accordance with legislation. Creditors of bankrupt debtors and liquidated companies participate in the distribution of the bankrupt debtor’s or liquidated company’s assets according to the statute. U.S. investors should be aware that there is no equivalent to Chapter 11 bankruptcy law provisions to protect assets located in The Bahamas.

The Credit Reporting Act was passed in February 2018 to improve credit reporting systems and better assess borrowers’ risk. The Central Bank confirmed Italian-based CRIF S.P.A. launched The Bahamas’ first credit bureau in April 2021, but it is not yet fully functional. Bahamian commercial banks and personal lenders will be required to share their clients’ credit history with CRIF. CRIF will provide lenders access to credit reports. The Central Bank identified 45 entities as credit information providers as of October 2021.

Tax relief is by far the most compelling and significant investment incentive in The Bahamas. The government does not impose taxes on income, estates, or inheritances. Other incentives for investment include waivers on import duties, property tax abatement, and, in some cases, land grants or extended leases for private development at below-market rates. Certain incentives are negotiated directly with the Bahamas Investment Authority (BIA) and require the approval of the National Economic Council (NEC).

Other investment incentives are outlined in concessionary legislation such as the Hotels Encouragement Act, the Bahamas Vacation Plan and Timeshare Act, the Agricultural Manufacturers Act, the Family Islands Development Encouragement Act, the Industries Encouragement Act, the Tariff Act, the International Persons Landholding Act, the City of Nassau Revitalization Act, the Hawksbill Creek Agreement, Grand Bahama Act, and the Commercial Enterprises Act. BIA either administers the legislation or acts as the intermediary between the foreign investor and relevant government ministry or agency. Further information on investment incentives is available at http://www.bahamas.gov.bs .

The city of Freeport is a 233-square-mile Free Trade Zone on the island of Grand Bahama. The Hawksbill Creek Agreement (1955) between the Bahamas government and the Grand Bahama Port Authority guarantees the “special economic zone” until 2054. Businesses operating in Freeport must obtain a license from the Grand Bahama Port Authority, but are exempt from most taxes (including property, excise, import, and business taxes). The government has made efforts to regulate business activities and extract tax revenues from the free zone, but most have been litigated to the Port’s benefit.

In the aftermath of Hurricane Dorian in September 2019, the islands of Abaco and Grand Bahama were both declared Special Economic Recovery Zones (SERZ), which allowed residents and businesses to benefit from wide-ranging tax exemptions and incentives. In December 2021, the government extended most of the tax concessions to December 2022, including the tax-free sale of fuel and importation of building materials and household goods, continuing tax concessions on replacement vehicles, and a value-added tax (VAT) discount on the sale of real estate valued up to $500,000.

The Bahamas maintains few formal performance requirements for investments. During the approvals process, an investor provides proof of adequate and legitimate sources of funding and, depending on the type of investment, produces economic and environmental impact assessments. The government negotiates requirements on a project-by-project basis, and, in the case of large developments, offers a Heads of Agreement between the government and the investor. These agreements include government obligations to the investor. There is no official mandate to hire local personnel, though many Heads of Agreement stipulate a percentage of workers must be Bahamian.

The government encourages commercial enterprises to source from local producers and transfer skills to the local labor market. This engagement is a part of the negotiations with the government during the approval phase, and it is common for an investor to gain concessions where they can benefit local businesses, create jobs, or support the transfer of skills and technology.

In January 2022, the government announced a policy that required investors, including large resorts, wholesalers, and retailers to purchase at least forty percent of agricultural and marine products from local producers. This policy is not supported by legislation, and the Embassy understands it is negotiated directly with investors.

The government negotiates and sometimes facilitates work permits for key employees as part of the investment approvals process, usually under the Commercial Enterprises Act (CEA). For non-essential services, the government requires investors to document efforts to recruit local Bahamians as part of their applications for work permits, but the law does not stipulate an exact percentage. Buyers of second homes can apply for permanent residency (not citizenship) and benefit from expedited approval for home purchases that exceed $500,000. The government generates revenue by collecting fees for work permits. Depending on the category, work permits range from $1,000 to $15,000 annually. Fees can be assessed and paid at www.immigration.gov.bs .

Despite the high number of second-home owners in The Bahamas, local and international investors describe the process of registering property as difficult. The time to complete the registration process is lengthy, and there has been limited progress on establishing digital land registries or time limits for procedures. Successive governments have committed to creating a digital land registry to improve market transparency, facilitate the ease of doing business, and ensure households and businesses have secure titles.

The government does not publish statistics regarding the percent of land without clear title. Unoccupied property cannot revert to other owners, such as squatters. This leads to a high incidence of unoccupied, derelict, and partially constructed residences. The commercial district of downtown Nassau suffers from a high incidence of abandoned buildings. Successive governments have promised but failed to address the situation.

Land ownership in The Bahamas is founded on English law and can include crown land, commonage land, and generational land. The investor’s secured interest in mobile and immobile property is recognized and enforced by law. Mortgages in real property and legal rights in personal property are recorded with the Registrar General of The Bahamas.

The Embassy has received reports of problems obtaining clear title to property, often delaying real estate transaction closings. This can be due to the seller having no legal right to convey or because separate claims to ownership arose after a purchase was made.

In 2019, the government took steps to strengthen Intellectual Property Rights (IPR) in response to pressure from the business community and as part of its protracted WTO accession process. These regulations cover patents, trademarks, copyrights, integrated circuits, false trade descriptions, new plant varieties, and geographic indicators. The government anticipates the new regulations will bring The Bahamas into compliance with the terms of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. The Embassy is not aware of new IP-related laws or regulations introduced in 2021. The Bahamas is a member of the World Intellectual Property Organization (WIPO) but has not ratified the WIPO Internet treaties. The Bahamas is also a signatory to the following intellectual property conventions and agreements.

Berne Convention for the Protection of Literary and Artistic Works

Paris Convention for the Protection of Industrial Property

Universal Copyright Convention (UCC)

Convention establishing the World Intellectual Property Organization (WIPO)

Convention on the means of prohibiting and preventing the illicit import, export, and transfer of ownership of cultural property

The Bahamas has not recently been listed as a country of concern in the U.S. Trade Representative’s (USTR) Special 301 Report and is not included in USTR’s 2020 Review of Notorious Markets for Counterfeiting and Piracy.

The Bahamas’ intellectual property registry is maintained by the Department of the Registrar General ( https://www.bahamas.gov.bs/rgd ), and enforcement is coordinated by the Royal Bahamas Police Force with support from Bahamas Customs. The Copyright Royalty Tribunal, established under the Copyright Act, is responsible for royalty-related activities, such as collecting and distributing royalties.

U.S. companies should be aware that intellectual property is primarily a private right, and the U.S. government cannot enforce rights for private individuals in The Bahamas. It is the responsibility of the rights’ holders to register, protect, and enforce their rights where relevant, and retain counsel and advisors where necessary. Companies may wish to seek advice from local attorneys or IP consultants who are experts in Bahamian law.

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/ .

The government encourages free capital markets, and the Central Bank supports this through its regulatory functions. The Bahamas is an Article VIII member of the IMF and has agreed not to restrict currency transactions, such as payments for imports. The Bahamas Securities Commission regulates the activities of investment funds, securities, and capital markets ( www.scb.gov.bs ). The Bahamas International Stock Exchange (BISX), established in 1999, excludes foreign investors and is regulated by the Securities Commission of The Bahamas.

There are no legal limitations on foreigners’ access to the domestic credit market, and commercial banks make credit available at market rates. The government encourages Bahamian-foreign joint ventures, which are eligible for financing through both commercial banks and the Bahamas Development Bank ( http://www.bahamasdevelopmentbank.com/ ).

The government does not prohibit its citizens from investing internationally. However, all outward direct investments by residents, including foreign portfolio investments, require the prior approval of the Exchange Control Department of the Central Bank of The Bahamas ( https://www.centralbankbahamas.com/exchange-control-notes-and-guidelines ). Applications are assessed by their probable impact on The Bahamas’ balance of payments.

In an effort to maintain adequate foreign reserves during the economic crisis brought on by the pandemic, the Central Bank suspended purchases of foreign currency on May 4, 2020 for specific transactions that could drain reserves and jeopardize the country’s ability to maintain a fixed, one-to-one exchange rate with the U.S. dollar. The Central Bank also suspended Bahamian investments in U.S.-dollar denominated investment. The Central Bank resumed access to these facilities on October 1, 2021 as the country’s foreign reserves stabilized.

The financial sector of The Bahamas is highly developed and consists of savings banks, trust companies, offshore banks, insurance companies, private pension funds, cooperative societies, credit unions, commercial banks, a development bank, a publicly controlled pension fund, a housing corporation, and the state-owned Bank of The Bahamas. These institutions provide a wide array of services via several types of financial intermediaries. The financial sector is regulated by the Central Bank of The Bahamas, the Securities Commission, the Insurance Commission, the Inspector of Financial and Corporate Service Providers, the Gaming Board, and the Compliance Commission.

In the domestic banking sector, four of the eight commercial banks are subsidiaries of Canadian banks, three are locally owned, and one is a branch of Citibank, a U.S.-based institution which has operated for more than fifty years providing corporate and investment banking services in the country. Continued reorganization by Canadian banks, including closure of several brick-and-mortar branches, has severely limited banking services on some of the less populated islands.

All domestic commercial banks have correspondent banking relationships, and the Embassy is not aware of any of these relationships being in jeopardy. According to the Central Bank’s December 2021 Quarterly Economic Review, the private sector delinquency or non-performing rate on commercial bank loans increased to 9.6 percent at the end of 2021 from a pre-pandemic level of 8.0 percent. The Central Bank believes this rate will stabilize and begin to decline before the end of 2022.

The Central Bank responded to the loss of brick-and-mortar banks by introducing the “Sand Dollar” in December 2019, the first central bank-backed digital currency in the world. The introduction of the new digital currency provides individuals with efficient access to financial services. Its launch has facilitated the financial inclusion of unbanked and underbanked residents. To date, nine firms (including clearing banks, money transfer services, credit unions and payment service providers) have successfully completed a cybersecurity assessment and been authorized to distribute Sand Dollars within their proprietary mobile wallets.

In February 2021, the Central Bank collaborated with Mastercard and Island Pay (a local digital payment platform) to launch Sand Dollar prepaid cards allowing the option to instantly convert the digital currency to traditional Bahamian dollars and pay for goods and services anywhere Mastercard is accepted. As of December 2021, the Central Bank estimated 20,000 individuals utilized Sand Dollars and approximately $300,000 of the digital currency is in circulation. The bank has prioritized interoperability with the automated clearing house, so there can be direct linkages between Sand Dollar wallets and local deposit accounts. When this interoperability exercise is complete, additional businesses are expected to accept Sand Dollar as payments.

Although Sand Dollar accounts and transactions are theoretically subject to the same stringent anti-money laundering and Know Your Customer (KYC) safeguards as traditional commercial banks, the Embassy continues to work with the Central Bank to ensure there is capacity to enforce safeguards and account audit capabilities. Additional information on the Sand Dollar can be accessed via www.sanddollar.bs/ .

The Bahamian government passed omnibus legislation to manage the oil and gas sector in 2017 but has not yet promulgated supporting regulations. The legislation calls for the creation of a sovereign wealth fund which has yet to be completed. Discussions of a possible sovereign wealth fund were reignited when the Isle of Man-registered Bahamas Petroleum Company began exploratory oil drilling in Bahamas waters. The company confirmed in February 2021 that its exploratory drilling did not produce commercially viable quantities of oil and exited the market.

Nonetheless, the recently elected administration committed to present legislation to support a Sovereign Wealth Fund in early 2022 to monetize the concessionary access to Crown Land and Seabed leases already provided to foreign investors. Future Crown Land investments and royalty payments from exports of the country’s natural resources (such as salt, sand, rock, and aragonite) are also likely to contribute to the fund.

State-owned enterprises are active in the utilities and services sectors of the economy. A list of the 25 SOEs is available on www.bahamas.gov.bs . Key SOEs include Bahamasair Holdings Ltd. (the national airline), Public Hospitals Authority, Civil Aviation Authority, Nassau Airport Development Authority, University of The Bahamas, Health Insurance Authority, Bank of The Bahamas, Bahamas Power and Light (BPL), Water and Sewerage Corporation (WSC), Broadcasting Corporation of The Bahamas (ZNS), Nassau Flight Services, and the Hotel Corporation of The Bahamas.

In April 2019, the government announced plans to introduce a State-Owned Enterprises Bill to impose proper corporate governance and address the risk inefficient SOEs pose to the government’s financial health. The Embassy is unaware of efforts to advance this Bill in 2021. However, a suite of legislation passed in March 2021 aimed at improving the country’s fiscal governance may also improve the performance and accountability of SOEs.

Within the past decade, no SOE has returned profits or paid dividends, although SOEs account for significant government expenditure with approximately $419 million budgeted for fiscal year 2021-2022. The government has maintained SOE reforms are integral to its fiscal consolidation plans and confirmed commitments to reduce subsidies by $100 million annually over the next four years. The savings from SOE reform are expected to assist with meeting additional debt servicing obligations.

The government has permitted foreign investment in sectors where SOEs operate and has approved licenses to private suppliers of electrical and water and sewerage services. These licenses have been issued for private real estate developments or where there is limited government capacity to provide services. The city of Freeport on the island of Grand Bahama has its own licensing authority and maintains monopolies for the provision of electricity, water, and sanitation services.

The government has not taken definitive steps to privatize SOEs but has proposed public-private partnerships as the preferred model going forward. Foreign investors are allowed to participate in privatization programs. The government divested 49 percent of the Bahamas Telecommunication Company in 2011 to U.S.-based Cable & Wireless Communications. The government also issued a second license for cellular services and retained 51 percent equity in the new company, Cable Bahamas/Aliv. In February 2019, the government entered a 25-year, $250 million lease agreement with UK-based Global Ports Holdings to redevelop the Nassau Cruise Port. In May 2021, the company announced it successfully raised over $130 million through its private bond offering.

Local and foreign companies operating in The Bahamas have progressively become more committed to the tenets of responsible business conduct (RBC). Local and foreign companies have led RBC-related initiatives, including educational programs directed at capacity building for specific industries, the maintenance of public spaces, financial and technical assistance to charitable organizations, and commitments to sustainability and environmental responsibility.

There have been no high-profile or controversial instances of corporate violations of human or labor rights, but civil society remains active in bringing attention to social issues. The Bahamas has strong trade unions, and labor laws prohibit discrimination in employment based on race, creed, sex, marital status, political opinion, age, HIV status, or disability.

The Bahamas does not adhere to the OECD Guidelines for Multinational Enterprise.

The country is already suffering the effects of climate change with rising water levels and more intense storms, including hurricane Dorian in 2019, from which the islands of Grand Bahama and Abaco are still recovering. In 2016, The Bahamas ratified the Paris Agreement and established its Nationally Determined Contribution (NDC). The NDC commits the Bahamas to reducing greenhouse gas emissions by 30% by 2030, conditional upon international support. The government remains dedicated to meeting this goal. The Prime Minister led a large delegation to COP26 and has prioritized climate change action. The Ministry of the Environment is developing a national climate change strategy.

The Embassy is not aware of any regulatory incentives to achieve policy outcomes or specific public procurement policies that include environmental or green growth considerations, such as resource efficiency, pollution abatement, or climate resilience.

The government’s laws to combat corruption by public officials have been inconsistently applied. The law provides criminal penalties for corruption, and the government generally implemented the law effectively when applied. However, there was limited enforcement of conflicts of interest related to government contracts and isolated reports of officials engaging in corrupt practices, including accepting small-scale “bribes of convenience.” The political system is plagued by reports of corruption, including allegations directing contracts to political supporters and providing favorable treatment to wealthy or politically connected individuals. In The Bahamas, bribery of a government official is a criminal act carrying a fine of up to $10,000, a prison term of up to four years, or both.

The current administration has accused the former administration of inappropriate spending and misappropriation of millions of dollars, particularly during the state of emergency issued due to the COVID-19 pandemic. The Emergency Power (COVID-19) Regulations, passed in March 2020, granted widespread powers to the government during the state of the emergency. For example, the legislation allowed the government to bypass normal spending rules and procurement processes, although it did require the government to present Parliament with reports of contracts and pandemic-related funding within six weeks of the expiration of the state of emergency. Despite the state of emergency expiring and being extended several times throughout 2020 and 2021, the former administration failed to report. The Emergency Power Regulations expired for the final time without extension in October 2021.

The new administration has called into question several contracts awarded to companies and individuals by the former administration under the Emergency Power Regulations and has ordered forensic audits of government ministries and agencies. Initial findings suggest significant misappropriation of funds. The former administration admitted it failed to report but denies allegations of corruption. The new administration also accused the former administration of $821 million in undisclosed liabilities and unfunded obligations identified in the former administration’s pre-election report. The former administration denies these allegations, explaining the reporting irregularities were due to differences in accounting methodologies.

As of April 2022, no criminal charges have been filed against members of the former government for these corruption allegations. The current government pledged any decision to prosecute would be supported by independently collected and verified evidence.

The Public Disclosure Act requires senior public officials, including senators and members of Parliament, to declare their assets, income, and liabilities annually. For the 2021 deadline, the government gave extensions to all who were late to comply. The government did not publish a summary of the individual declarations, and there was no independent verification of the information submitted. The campaign finance system remains largely unregulated with few safeguards against quid pro quo donations, creating a vulnerability to corruption and foreign influence.

In September 2021, the government enacted the Public Procurement Act (2021), which overhauls the administration of government contracts to improve transparency and accountability. Senior government officials have called for the legislation to be amended to reflect government capabilities and strengthened with new regulations. Though functional, most agencies with large procurement budgets do not utilize the existing e-procurement portal or registry. Senior Officials purport that the existing e-procurement portal requires modernization to improve functionality.

According to Transparency International’s 2021 Corruption Perceptions Index, The Bahamas ranked 30 out of 180 countries with a score of 64 out of 100. There are no specific protections for NGOs involved in investigating corruption. U.S firms have identified corruption as an obstacle to FDI and have reported perceived corruption in government procurement and in the FDI approvals process.

The government does not, as a matter of government policy, encourage or facilitate illicit drug production or distribution, nor is it involved in laundering the proceeds of the sale of illicit drugs.  No charges of drug-related corruption were filed against government officials in 2021.

The Bahamas ratified major international corruption instruments, including the Inter-American Convention against Corruption in 2000, and has been a party to the Mechanism for Follow-Up on the Implementation of the Inter-American Convention against Corruption (MESICIC) since 2001. The Bahamas is not party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Government agency or agencies responsible for combating corruption:

Royal Bahamas Police Force
Anti- Corruption Unit
P.O. Box N-458
(242) 322-4444
Email: info@rbpf.bs 

Watchdog organizations:

Citizens for a Better Bahamas
Transparency International (Bahamas Chapter)
(242) 322-4195
Website: www.abetterbahamas.org 
Email: info@abetterbahamas.org 

Organization for Responsible Governance (ORG)
Bay Street Business Center, Bethell Estates
East Bay Street (at Deveaux St.)
Website: www.orgbahamas.com 
Phone: 1-242-828-4459
Email:  info@orgbahamas.com 

The Bahamas has no history of politically motivated violence and, barring a few incidents leading up to general elections in 2021, the political process is violence-free and transparent. The 2021 incidents were minor and included damage to political party installations and billboards, social media harassment, and altercations between political party supporters.

The labor force is considered well-educated by international literacy and numeracy standards, and both skilled and unskilled labor is readily available. Although a formal Labor Force Survey has not been completed since December 2019 when the unemployment rate was 10.7 percent, government and international agencies estimate the 2021 unemployment rate at 20 to 25 percent due to the pandemic. The National Statistical Institute expects to complete the next Labor Force Survey in May 2022.

Under normal conditions, wage rates are lower than in the United States but higher than most countries in the region. The minimum wage is $5.25 per hour ($210 per week), although the government is considering increasing the wage to $6.25 per hour ($250 per week). There are significant numbers of documented and undocumented foreign workers. There are 40,000 registered work permit holders in The Bahamas, and the majority are designated as unskilled or semi-skilled. This group is comprised primarily of Haitian nationals.

The Bahamian government has granted special permission to several construction projects to bring in foreign workers. These concessions were negotiated as part of the Heads of Agreement for specific, large-scale investments. In most other cases, the employment of foreigners requires applying for individual work permits. Bahamian labor law governs all workers, both foreign and domestic.

The Fair Labor Standards Act (FLSA) requires at least one 24-hour rest period per week, paid annual vacations, and employer contributions to National Insurance (Social Security). The Act also requires overtime pay (time and a half) for working more than 40 hours a week or on public holidays. A 1988 law provides for maternity leave and the right to re-employment after childbirth. The Minimum Labor Standards Act, the Employment Act, Health and Safety at Work Act, Industrial Tribunal and Trade Disputes Act, and the Trade Union and Labor Relations Act were passed in 2001 and early 2002. Foreign workers also have the right to social security benefits after five consecutive years of contributions.

Bahamian law grants labor unions the right to free assembly and association and to bargain collectively. The unions and associations exercise these rights extensively, particularly in state-owned industries. The Industrial Relations Act governs the right to strike, which requires a simple majority of union members to vote in its favor. The Ministry of Labor oversees strike votes and manages overall industrial relations. Industrial unrest occurred throughout 2021 due to the effects of the pandemic and longstanding issues such as outstanding industrial agreements and delayed promotions. Demonstrations were organized by the Bahamas Public Services Union, the Union of Public Officers, the Nurses Union, the Doctors Union, the Consultant Physicians Staff Association, the Bahamas Educators and Managerial Union, Customs, Immigration and Allied Workers Union, the Union of Tertiary Educators, and the Union of Teachers.

In 2016, the government amended legislation to require employers to inform the Minister of Labor in instances where more than ten people were being laid off.

The Bahamas ratified most International Labor Organization (ILO) Conventions and domestic law recognizes international labor rights. The Department of Labor’s Inspection Section has been strengthened to investigate occupational safety and health issues, including both on request and random inspections. The country is committed to eliminating the worst forms of child labor, and the Ministry of Labor has periodically inspected grocery stores and other establishments where child labor in commonplace to ensure the enforcement of laws governing child labor.

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

Political-Economic Section
U.S. Embassy Nassau
New Providence, The Bahamas
P.O. Box N-8197
Telephone: (242) 322-1181
Email: NassauCommercialDL@state.gov 

The GoTT 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 the country’s investment promotion agency that assists investors through the process of setting up a non-energy business and provides aftercare services once established. Specifically, it provides market information, offers advice on accessing investment incentives, assists with regulatory and registry issues, and provides property and location services. It also assists with general problem solving and advocacy to the government.

While TT 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.

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.

There are no limits on foreign ownership. 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 or limitations applied to U.S. investors.

TT maintains an investment screening mechanism for foreign investment related to specific projects that have been submitted for the purpose of accessing sector-specific incentives, such as for those offered in the tourism industry. Information on criteria to access the development incentives are listed in various legislative acts such as the Tourism Development Act of 2001.

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

The Business & Human Rights Resource Centre noted concerns about the expansion of Chinese investment in TT in 2019.

The GoTT’s business facilitation efforts focus primarily on investor services (helping deal with rules and procedures) through its investment promotion agency and is attempting to make the rules more transparent and predictable overall. However, more work needs to be done to achieve efficient administrative procedures and dispute resolution. TT ranks 158th of 190 countries for registering property, 174th for enforcing contracts, and 160th 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 . In 2022, the Global Enterprise Registration Network (GER) gives the TT business registration website an above-average score of 8.5 out of 10 for its single electronic window, and a below average score of 4 out of 10 for providing information on how to register a business ( http://www  .TTconnect.gov.tt ). While the process is clear, the inability to make online payments and submit online certificate requests are the two primary reasons for the low score. A feedback mechanism allowing users to communicate with authorities is a strength of the TT business registration website. Foreign companies can use the website and business registration requires completion of seven procedures over a period of 10 days. The agencies with which a company must typically register include:

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

The GoTT does not promote or incentivize outward investment. The GoTT does not restrict domestic investors from investing abroad.

Through the TT Fair Trading Commission, the GoTT develops transparent policies and effective laws to foster market-based competition on a non-discriminatory basis and establishes “clear rules of the game.” 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 GoTT 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. International financial reporting standards are required for domestic public companies. The GoTT promotes but does not require companies’ environmental, social and corporate governance disclosures to facilitate transparency to help investors and consumers distinguish between high- and low-quality investments.

Proposed laws and regulations are often published in draft form electronically for public review at http://www.ttparliament.org/  , though there is no legal obligation to do so. The GoTT often solicits private sector and business community comments on proposed legislation, although there is no timeframe for the length of a consultation period when it happens, nor is reporting mandatory on the consultations.

All draft bills and regulations are printed in the official gazette and other websites:

• 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 that the GoTT 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: https://www.central-bank.org.tt 

TT is not a part of a regional economic block, although it participates in the Caribbean Community (CARICOM), a regional trading bloc that gives duty-free access to member goods, free movement to some CARICOM nationals, 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 GoTT has not consistently notified the World Trade Organization (WTO) Committee on Technical Barriers to Trade (TBT) of draft technical regulations.

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 and resolution of legal claims is 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, TT 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.

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 include:

• http://www.legalaffairs.gov.tt 
• https://www.rgd.legalaffairs.gov.tt 
• http://www.tradeind.gov.tt 
• https://investmentpolicy.unctad.org/investment-laws/laws/46/trinidad-and-tobago-foreign-investment-act 

The TT Fair Trading Commission is an independent statutory agency 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. No cases that involve foreign investment have arisen in the past 12 months. The agency adheres to fair and transparent norms and procedures. The agency’s decisions can be appealed to the judicial system.

The GoTT 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.

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 out 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.

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. There are no specific incentives for underrepresented investors such as women. Additional information is available on the following websites:

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