Executive Summary
Haiti, one of the most urbanized nations in Latin America and the Caribbean region, occupies the western third of the island of Hispaniola. Haiti’s investment climate continues to present both important opportunities and major challenges for U.S. investors. With a market economy, ample arable land, and a young population, Haiti offers numerous opportunities for investors. Despite efforts by the Haitian government to achieve macroeconomic stability and sustainable private sector-led and market-based economic growth, Haiti’s investment climate is characterized by an unstable national currency (Haitian gourde, or HTG), persistent inflation, high unemployment, political uncertainty, and insecurity. The global outbreak of the coronavirus and resulting slowdown of economic activity, the August 2021 earthquake in the south of Haiti, the assassination of the Haitian president, and increasingly emboldened criminal actors further complicated the Haitian government’s capacity to achieve macroeconomic stability, create jobs, and encourage economic development through foreign trade and investment. In the absence of a functioning parliament and prior to President Moise’s assassination in July 2021, the Haitian government had taken additional steps to regulate commercial activity by presidential decree, with sudden regulatory changes the business community viewed as detrimental to a functioning market. As a free market system, the Haitian economy traditionally relies on its agricultural, construction, and commerce sectors, as well as the export-oriented apparel assembly industry. Although the business climate is challenging, Haiti’s legislation encourages foreign direct investment. The government has prioritized building and improving infrastructure, including boosting energy production, and has additionally designated agriculture, manufacturing, and tourism as key investment sectors. The Haitian investment code provides the same rights, privileges, and equal protection to local and foreign companies. Under Haitian law, Haiti’s business climate affords equal treatment to all investors, including women, minorities, and foreign nationals.
Haiti continues to face significant challenges and civil unrest. With no dates yet announced for national elections, it is anticipated that political uncertainty and a short-term economic policy focus will complicate the workings of an already opaque bureaucracy. Prime Minister Ariel Henry has publicly announced the imminent formation of a new Provisional Electoral Council to organize elections and a National Constituent Assembly to reform the constitution. While the country maintains a liberal trade and foreign exchange regime, and largely adheres to World Bank programs to fight poverty, continuing reports of corruption and financial mismanagement have raised challenges for investment.
The Government of Haiti (GoH) Post-COVID Economic Recovery Plan (PREPOC 2020-2023) includes the textile sector as one of the most important means for achieving economic transformation and diversification over the next three years. Since its launch in January 2021, the Investment Opportunity Generation Project has tried to support the industry through targeted business information as well as transactional support to increase business opportunities for investors and manufacturers. Despite the negative impact of the pandemic, most companies in the sector currently operates near full capacity.
According to the World Investment Report 2021 United Nations Conference on Trade and Development (UNCTAD), Foreign Direct Investment (FDI) flows to Haiti fell to $30 million in 2020 from $75 million the year prior – a 60 percent decrease and the lowest level since United Nations Economic Commission for Latin America and the Caribbean (ECLAC) began recording FDI inflows using a consistent methodology in 2010. Inflation remains above target because of weak domestic production, a deepening government budget deficit mostly financed by monetization from the Central Bank, food price pressures, and the depreciation of the Haitian gourde against the U.S. dollar. The Haitian Central Bank (BRH) assesses that inflation is also caused by deteriorating security conditions, with armed gangs blocking key transport thoroughfares and cutting off Haiti’s southern departments from markets in Port-au-Prince and the North. The rise in commodity prices on the international market also increases the country’s import bill and amplifies inflationary pressures. Haiti’s net international reserves were $520 million at the end of March 2022. Improving the investment outlook for Haiti requires political and economic stability underscored by the enactment of institutional and structural reforms that can improve Haiti’s business and political environment. The International Monetary Fund projects a 0.3 percent growth of the Gross Domestic Product (GDP) in 2022.
Monthly inflation was recorded at 0.6 percent and 2.1 percent, respectively in January and February 2022. Year-on-year, the inflation rate reached 25.2 percent in February 2022. The Central Bank assesses the implementation of a realistic budget and better coordination between fiscal and monetary policies through adherence to an economic and financial governance pact could limit the monetary effect in the fueling of inflationary pressures.
Haiti is ranked 170 out of 189 countries on the United Nations Development Program’s 2020 Human Development Index. The World Bank’s latest household survey in 2012 reported that over 6 million Haitians live on less than $2.41 per day, and more than 2.5 million fall below $1.12 per day.
The reports of damage from the 2021 earthquake indicate that nearly 54,000 houses were destroyed and 83,770 other buildings, including schools, health facilities, and public buildings, were damaged. The Post Disaster Needs Assessment (PDNA) report, made available on December 12, 2021, estimated the total recovery needs from the earthquake to be $1.98 billion, which is equivalent to 13.5 percent of Haiti’s 2020 GDP.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
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.
Limits on Foreign Control and Right to Private Ownership and Establishment
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.
Other Investment Policy Reviews
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 .
Business Facilitation
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.
Outward Investment
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.
2. Bilateral Investment and Taxation Treaties
Haiti does not have a bilateral investment treaty (BIT) or double taxation treaty in force with the United States. Haiti has BITs in force with the United Kingdom, France, and Germany. Haiti signed the CARIFORUM-EU Economic Partnership Agreement, which includes 14 other Caribbean countries, in December 2009, but has not yet ratified the agreement. There is no double taxation agreement between Haiti and other countries.
Haiti is a beneficiary country of the U.S. Caribbean Basin Trade Partnership Act (CBTPA), a trade preference program enacted by Congress in October 2000. In 2020, the U.S. Congress renewed CBTPA legislation to extend preferences through 2030. The CBTPA provides duty-free treatment to apparel wholly assembled, knit or knit-to-shape in certain beneficiary countries in the Caribbean, as long as the apparel uses U.S. fabrics and yarns.
In December 2006, Congress enacted the Haitian Hemispheric Opportunity for Partnership Encouragement Act of 2006, commonly referred to as HOPE. HOPE amended the Caribbean Basin Economic Recovery Act (CBERA) and authorized the President to extend additional trade preferences to Haitian-manufactured apparel. HOPE preference programs are separate programs added as part of CBERA and do not replace those provided by the CBTPA.
In June 2008, Congress enacted the Food, Conservation, and Energy Act of 2008 (Public Law 110-246). Title XV, Subtitle D, Part I of the Act contains amendments to the established special rules for imports of apparel and other textile articles from Haiti, which can be found in 19 U.S.C. §2703a. Commonly known as the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II), these amendments expanded the preferences originally established under HOPE, and created four new preference categories for Haitian-manufactured apparel.
HOPE II enables the Haitian textile industry to benefit from tariff advantages with the condition that the Haitian government and eligible producers comply with internationally recognized labor standards. HOPE II allows for duty-free entry into the United States of a limited number of garments imported from Haiti, provided that 50 percent of the value when imported originates in Haiti, the United States, or another country that has a free trade agreement with the United States. The Haiti Economic Lift Program (HELP), an act passed by the U.S. Congress in 2010 in response to the apparel industry’s needs following the devastation of the January 2010 earthquake, extends HOPE II tariff advantages through 2025. The HOPE and HELP Acts are critical to Haiti’s recovery and create the opportunity for sustained growth for Haiti’s economy. They have been instrumental to the development of Haiti’s apparel sector, which accounts for over 85 percent of national export earnings and over 59,060 jobs as of December 2021. In December 2021, legislation to reauthorize the HOPE and HELP Acts were introduced in Congress. The bill would ensure that the benefits of both programs are maintained until 2035.
3. Legal Regime
Transparency of the Regulatory System
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.
International Regulatory Considerations
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.
Legal System and Judicial Independence
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.
Laws and Regulations on Foreign Direct Investment
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.
Competition and Antitrust Laws
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.
Expropriation and Compensation
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 .
Dispute Settlement
ICSID Convention and New York Convention
In 2009, Haiti ratified the 1965 International Convention on the Settlement of Investment Disputes between states and nationals of other states (ICSID). Under the convention, foreign investors can call for ICSID arbitration for disputes with the state. The Haitian government appears to recognize that weak enforcement mechanisms and a lack of updated laws to handle modern commercial disputes severely compromises the protections and guarantees that Haitian law extends to investors.
Haiti is not a signatory to the Inter-American-U.S. Convention on International Commercial Arbitration of 1975 (Panama Convention).
Investor-State Dispute Settlement
Haiti is a signatory to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which provides for the enforcement of an agreement to arbitrate present and future investment disputes. Under the convention, Haitian courts can enforce such an agreement by referring the parties to arbitration. Disputes between foreign investors and the state can be settled in Haitian courts or through international arbitration, though claimants must select one to the exclusion of the other. A claimant dissatisfied with the ruling of the court cannot request international arbitration after the ruling is issued. The law provides mechanisms on the procedures a court should follow to enforce foreign arbitral awards issues.
While there is not a consistent history of extrajudicial action against foreign investors, a number of investment dispute cases have been reported by U.S. companies over the past 10 years, although the most recent expropriation claim occurred in 2013. Disputes most frequently related to disagreements between business owners and Haitian tax and licensing authorities, a lack of clarity as to land ownership and other disputed property claims, and disputes over the enforcement of government contracts and concessions. Although some businesses were able to resolve disputes through the court system or by otherwise settling with the Haitian government, business owners appear to have accepted their losses and abandoned other legacy cases.
International Commercial Arbitration and Foreign Courts
International arbitration is strongly encouraged as a means of avoiding lengthy domestic court procedures. In principle, foreign judgments are enforceable under local courts. In 2005, the Haitian Chamber of Commerce and Industry and the Inter-American Development Bank jointly developed the Haitian Arbitration and Conciliation Chamber, which provides mechanisms for conciliation and arbitration in private commercial disputes. This approach offers many benefits that allows the parties to find their own solution to their disputes.
Bankruptcy Regulations
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.
4. Industrial Policies
Investment Incentives
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.
Foreign Trade Zones/Free Ports/Trade Facilitation
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.
Performance and Data Localization Requirements
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.
5. Protection of Property Rights
Real Property
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.
Intellectual Property Rights
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/ .
6. Financial Sector
Capital Markets and Portfolio Investment
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.
Money and Banking System
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.
Foreign Exchange and Remittances
Foreign Exchange
The Haitian gourde is convertible for commercial and capital transactions. The Central Bank publishes a daily reference rate, which is a weighted average of exchange rates offered in the formal and informal exchange markets. The difference between buying and selling rates is generally less than five percent. Funds can be freely converted into specific currencies including the U.S. dollar, Canadian dollar, the Euro, the Dominican Republic peso, and the Panamanian balboa. The U.S. dollar is usually the most widely available foreign currency and may be available at times when conversion into another currency is not an option. In Port-au-Prince as in provincial towns, foreign currency can be exchanged at commercial banks and currency exchange offices. Forex traders in streets corners are common with higher exchange rates but transactions are risky and jeopardize safety. Since the fall of 2020, however, a shortage of U.S. dollars in the formal foreign exchange market in Haiti has been a persistent issue for businesses engaging in international trade. Haiti’s central bank continues to make periodic interventions in the foreign exchange market to support the dollar supply and contain a further depreciation of the gourde. These interventions also facilitate trade for import transactions.
Remittance Policies
The Haitian government does not impose restrictions on the inflow or outflow of capital. The Law of 1989 governs international transfer operations and remittances. Remittances are Haiti’s primary source of foreign currency and are equivalent to approximately one-third of GDP. In 2021, Haiti received about $4 billion in remittances. There are no restrictions or controls on foreign payments or other fund transfer transactions. While restrictions apply on the amount of money that may be withdrawn per transaction, there is no restriction on the amount of foreign currency that residents may hold in bank accounts, and there is no ceiling on the amount residents may transfer abroad.
The Haitian government has expressed an intention to put in place stricter measures to monitor money transfers in accordance with Haiti’s efforts to deter illicit cash flows, as mandated by the 2013 Anti-Money Laundering Act. The Central Bank issued a circular in June 2020 applicable to commercial banks and transfer houses. The circular, which went into force as of October 2020, specifies that international transfers must be paid in foreign currency if the beneficiary receives the funds in their U.S. dollar-denominated bank account, while transfers must be paid in gourdes if the beneficiary requests payment at any point of service (branch, agency, office, and kiosk) on Haitian national territory. The Association of Professional Bankers (APB) reported that, while this measure has increased the banking rate among the population, it has neither improved the savings rate nor the scarcity of USD banknotes. According to the circular, payments in gourdes are made at the daily reference exchange rate published by the Central Bank.
Sovereign Wealth Funds
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.
7. State-Owned Enterprises
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.
Privatization Program
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.
9. Corruption
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.
Resources to Report Corruption
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
10. Political and Security Environment
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/
11. Labor Policies and Practices
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/ .
12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
The U.S. International Development Finance Corporation (DFC) offers innovative financial solutions to support private investors through debt financing, political risk insurance, equity investment, and supporting private equity investment funds. The DFC prioritizes low-income and lower middle-income countries, where its services will have the greatest impact. By mobilizing private capital to help solve critical development challenges, the DFC advances U.S. foreign policy, and catalyzes revenues, jobs, and growth opportunities both at home and abroad. The DFC offers several products including debt financing, political risk insurance, and support for investment funds.
Active DFC projects in Haiti include activities in the finance and insurance, construction, and tourism sectors. An investment incentive agreement exists between the Governments of Haiti and the United States: https://www.dfc.gov/sites/default/files/2019-08/bl_haiti_06-29-1998.pdf .
Business investments in Haiti may also be eligible for financing from the World Bank’s International Finance Corporation and Inter-American Development Bank’s IDB Invest program.
Haiti is a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA). MIGA guarantees investments against non-commercial risks and facilitates access to funding sources including banks and equity partners for investors.
14. Contact for More Information
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.