Transparency of the Regulatory System
Suriname does not have transparent policies nor effective laws to foster competition. The previous National Assembly (2015-2020) indicated that it would vote on a draft competition law but did not do so. The Competitiveness Unit of Suriname coordinates and monitors national competitiveness and is working towards establishing policies and suggesting legislation to foster competition. Current legislation on topics such as taxes, the environment, health, safety, and other matters are not purposefully used to impede investment but may still form obstacles. Employment protection legislation is among the most stringent in the world. Labor laws, for instance, prohibit employers from firing an employee without the permission of the Ministry of Labor once the employee has fulfilled his or her probationary period, which by law is limited to two months. Tax laws are criticized for overburdening the formal business sector, while a large informal sector goes untaxed. Public sector contracts and concessions are not always awarded in a clear and transparent manner. The current administration has announced its commitment to greater transparency in the public tendering process, and the Ministry of Public Works is publishing procurement notices on its website on a regular basis.
There are no informal regulatory processes managed by non-governmental organizations or private sector associations. Rule-making and regulatory authority exist within relevant ministries at the national level. It is this level of regulation that is most relevant for foreign businesses. The government may consult with relevant stakeholders on regulations, but there is no required public process. The government presents draft laws and regulations to the Council of Minsters for discussion and approval. Once approved, the President’s advisory body, the State Council, considers the draft. If approved, the government presents a draft to the National Assembly for discussion, amendment, and approval, and then to the President for signature. Legislation only goes into effect with the signature of the President and after publication in the National Gazette
Rule-making and regulatory authority exists within relevant ministries at the national level. It is this level of regulation that is most relevant for foreign businesses. The government may consult with relevant stakeholders on regulations, but there is no required public process. The government presents draft laws and regulations to the Council of Minsters for discussion and approval. Once approved, the President’s advisory body, the State Council, considers the draft. If approved, the government presents a draft to the National Assembly for discussion, amendment, and approval, and then to the President for signature. Legislation only goes into effect with the signature of the President and after publication in the National Gazette.
Legal, regulatory, and accounting procedures are often outdated and therefore not transparent nor consistent with international norms. The National Assembly passed the Act on Annual Accounts in 2017 to create more fiscal transparency by requiring all companies, including state-owned enterprises, to publish annual accounts based on International Financial Reporting Standards (IFRS). The law went into effect in 2020 for large companies, while it went into effect for small and medium sized companies (SMEs) in 2021. Small companies can use the IFRS for SMEs. On October 27, 2022, The National Assembly approved an extension of one year to the Act of Annual Accounts, to give companies more time to publish reports according to IFRS. Furthermore, the upper limit of small companies has been raised from SRD 3 million to SRD 50 million net turnover per year.
Suriname passed new legislation in October 2018 to professionalize and institute better standards in the accounting profession. The legislation created the Suriname Chartered Accountants Institute (SCAI) and makes membership mandatory for accountants in Suriname. The board of the SCAI has the responsibility to monitor the quality of the profession and apply disciplinary measures.
The intake form used by the division of International Business at the Ministry of Foreign Affairs and International Cooperation does mention that companies can submit an Environmental and Social Impact Assessment (ESIA) if available.
Draft bills or regulations are discussed in view of the public, and relevant stakeholders may be consulted. The National Assembly has established the email address firstname.lastname@example.org as a place where individuals can give their opinion on draft legislation.
There is no centralized online location where key regulatory actions are published. However, the National Assembly publishes the actual text of adopted laws on its website.
It is unclear what the regulatory enforcement mechanisms that ensure the government follows administrative processes might be, as the processes have not been made public. There is no public administration law. The Auditor General’s office is an independent body in charge of supervising the financial management of government funds. The Supreme Audit Institution reports to the National Assembly. The Central Accountant Service exercises control on administrative processes at the ministries and reports to the Ministry of Finance. There are no centralized online locations where key regulatory actions, or their summaries, are published.
A new minimum wage law entered into force on March 01, 2023, setting the minimum wage at SRD 30 per hour and will be valid till June 2023. From June until December 2023, the minimum hour wage will be set at SRD 35.
On August 31,2022 the value-added tax was approved in the National Assembly and implemented on January 01, 2023.
The revised petroleum law entered into force on January 01, 2023.
Tax facilities agreed before with the State Oil company are now incorporated in the revised petroleum Act. These are sales tax, stamp duty and dividend tax. Exemptions also apply for contractors and sub-contractors for goods and services exclusively related to the oil sector. The revision offers the sector more certainty.
It is unclear what the regulatory enforcement mechanisms are, as the process has not been made public. Regulatory reform efforts announced in prior years have not been fully implemented. Regulations are developed by ministries that have jurisdiction over the relevant area, in consultation with stakeholders.
The government’s executive budget proposal and enacted budget are easily accessible to the public. The government is obligated to share all financial data on the budget with the IMF before it can officially publish the data. This also applies to the public debt data. Full end-of-year budget reports are not published for the public to see what the government has actually accomplished from the enacted budget. However, the Ministry of Finance drafts end-of year budget reports for every fiscal year and have them validated by the Central Government Auditing Bureau (CLAD) and the Supreme Audit Institution and then send to the National Assembly for preparation of the public debates. The State Debt Management Office (SDMO) is responsible for the operational management of the public debt of the government. Data regarding public debt is published every three months in the Government Gazette of Suriname and on the SDMO website.
International Regulatory Considerations
As a member of CARICOM, Suriname has committed to regionally coordinated regulatory systems.
Suriname uses national and international standards. Standards developed by international and regional standardization bodies include ISO, Codex Alimentarius, International Electro Technical Commission, CROSQ, ASTM International, COPANT, SMIIC (Standards and Metrology Institute for Islamic Countries), NEN (Nederland Normalisatie Instituut), ETSI, GLOBAL GAP, Standards and Metrology Institute for Islamic Countries (SMIIC) etc.
Suriname is a member of the World Trade Organization (WTO). The WTO Committee on Technical Barriers to Trade (TBT) lists only one notification from Suriname in 2015.
Legal System and Judicial Independence
Suriname’s legal system is based on the Dutch civil system. Judges uphold the sanctity of contracts and enforce them in accordance with their terms. When an individual or company disputes a signed contract, they have the right to take the case to court. The judiciary consistently upholds local law, applies it, and enforces it for local and international businesses.
Laws are defined in criminal, civil, and commercial codes, and verdicts are based on the judge’s interpretation of those codes. There is no specialized commercial or civil court. The commercial codes contain commercial legislation.
Historically, the judicial system has been considered independent of the executive branch. Most observers consider the judicial system to be procedurally competent, fair, reliable, and free of overt government interference. Due to a shortage of judges and administrative staff, processing of civil cases can be delayed. Last year, the Court of Justice appointed seven new judges to ease the delay in court cases. There are now 30 judges.
Draft regulations may be reviewed by interested stakeholders, and they may be given the opportunity to comment. Since October 2019, individuals have also had the option to comment on draft legislation via email at email@example.com. There is no formal, required public consultation process. Suriname has no general administrative law, so there are no special administrative tribunals. Judges of the regular courts also hear cases of administrative law.
Laws and Regulations on Foreign Direct Investment
The overall legal regime, and more particularly the approval of foreign direct investment (FDI), may be discretionary rather than rules based. This can lead to heightened unpredictability and uncertainty and associated risks of favoritism and corruption.
On November 10, 2022, Suriname ratified the New York Convention of June 10, 1958. The convention is widely recognized as fundamental instrument of international arbitration and requires courts of contracting states to give effect to an arbitration agreement when a claim is brought in a matter covered by arbitration agreement. Contracting states are also required to recognize and enforce arbitration awards granted by other states, subject to specific limited exceptions.
In February 2021, the Foreign Exchange Commission announced three new measures regarding exchange rate policy. First, exporters are now required to repatriate earned export revenues to Suriname, which requires a buyer abroad to pay for purchased goods through a Surinamese commercial bank. Second, exporters and foreign exchange offices must exchange 30% of their foreign currency income into Surinamese Dollars (SRD). Third, importers are required to pay for imports via Surinamese commercial banks.
Several criminal investigations of former government officials began in 2020. In February 2020, former Central Bank Governor Robert van Trikt was arrested on fraud charges. In August 2020, the new National Assembly officially indicted ex-Minister of Finance Gillmore Hoefdraad, which allowed the Attorney General to launch an investigation into alleged financial mismanagement by Hoefdraad in collaboration with the ex-Governor of the Central Bank of Suriname, Robert van Trikt. In December 2020, the National Assembly voted to indict former Vice President (and current National Assembly member) Ashwin Adhin, which allowed the Attorney General to pursue a criminal investigation for embezzlement, fraud, and destruction of government property. In January 2022, both Hoefdraad and van Trikt were sentenced to twelve and eight years in prison respectively.
There is no one-stop-shop website for investment that provides relevant laws, rules, procedures, and reporting requirements for investors. This will change once the website of Suriname’s Trade and Investment Agency is launched.
Expropriation and Compensation
According to Article 34 of Suriname’s constitution, expropriation will take place “only for reasons of public utility” and with prior compensation. In practice, the government has no history of expropriations. However, Article 42 of Suriname’s constitution specifically refers to all natural resources as property of the nation, and states that the nation has inalienable rights to take possession of all natural resources to utilize them for the economic, social, and cultural development of Suriname.
There is no history of government measures alleged to be, or that could be argued to be, indirect expropriation, such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments.
There has been no alleged measures taken by the government, or could be argued to be, indirect expropriation, such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments.
ICSID Convention and New York Convention
Suriname is not a party to the Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID). Suriname has been a member of the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards since 1964, when the country was still a colony of the Netherlands. Upon becoming independent in 1975, Suriname automatically continued its membership in international conventions and treaties. On November 22, 2022, Suriname ratified the agreement and it entered into force on February 8, 2023.
There is no specific domestic legislation providing enforcement of awards under the New York Convention or under the ICSID Convention. The Suriname Arbitration Institute has regulations for arbitration, mediation and binding advice modernized, taking into account international developments and applicable legal provisions.
The country is a member state of the Multilateral Investment Guarantee Agency (MIGA)
Suriname has no BIT or FTA with an investment chapter with the United States.
There have been no publicly known investment disputes in the past 10 years involving a U.S person or another foreign investor. Every effort is made to settle investment disputes outside the court system or via arbitration.
Judgments of foreign arbitral awards are enforced by the local courts only if Suriname has a legal treaty of jurisprudence with the foreign country involved. If not, the foreign judgment can be brought before the Surinamese court for consideration as long as the court determines it has jurisdiction and doing so does not otherwise violate any Surinamese laws. With Suriname’s participation and membership in the Caribbean Court of Justice, judgments from this court are also binding for local courts. Cases have been successfully filed against Suriname before the Inter-American Court of Justice and the Organization of American States. Judgments from these courts have been upheld by the Surinamese legal system.There is no known history of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
Suriname’s civil law includes options for arbitration. The government reactivated the Suriname Arbitration Institute (SAI) in August 2014 to offer arbitration and mediation services. The SAI collaborates with the Dutch Arbitration Institute.
The Mediation Council, pursuant to the Labor Mediation Act of 1946, promotes the peaceful settlement of disputes concerning labor issues and the prevention of such disputes in Suriname.
Local courts only recognize and enforce foreign arbitral awards if doing so is stipulated in the contract or agreement and it does not contradict local law. Foreign arbitration is an accepted means of settling disputes between private parties, but only if local alternatives are exhausted.
There have been no publicly known investment disputes in which state-owned enterprises are involved. Court processes are, in general, considered transparent and non-discriminatory.
Suriname has bankruptcy legislation. Creditors, equity shareholders, and holders of other financial contracts, including foreign contract holders, have the right to file for liquidation of debts due to insolvency. In a case where there is a loan from a commercial bank, repayment of the bank loan takes precedence. Bankruptcy, in principle, is not criminalized. However, in cases where a board of directors encouraged a company to pursue bankruptcy to avoid creditors, courts have viewed this behavior as a criminal offense. In the World Bank’s Doing Business Report, Suriname stands at 139 in the ranking of 190 economies on the ease of resolving insolvency.