Steaming Ahead ...........

OPEN FOR BUSINESS
Trinidad and Tobago has earned a reputation as an excellent investment site for international businesses. A leading performer the past four years has been the booming natural gas sector. Tourism is a growing sector, although not proportionately as important as in many other Caribbean islands. The economy benefits from low inflation and a trade surplus.

The three major banks are Republic Bank Limited, Royal Bank of Trinidad and Tobago Limited and First Citizens Bank. The 2002 to 2006 period has been marked with striking economic trends, massive Government spending on construction programs and massive growth due to high oil prices. 

The total GDP has doubled during this period and now stands over US$90 billion. Long-term growth looks promising, as Trinidad and Tobago further develops its hydrocarbon, petrochemical, and metals sectors—with significant increases in exports—and continues its diversification efforts in services, tourism, manufacturing, and agriculture.

Trinidad and Tobago’s strong growth rate over the past few years has led to trade surpluses over the past four years, even with high import levels due to industrial expansion and increased consumer demand. The debt service ratio has fallen considerably.

PETRO POWER
The petrochemical sector, including methanol, ammonia, urea, and liquefied natural gas, has continued to grow and has experienced a new burst of activity with the resumption of fullscale production of all existing facilities. Natural gas production continues to expand and should meet the needs of the many industrial plants coming on stream in the next three years. 

Of the non-hydrocarbon sectors, distribution, construction, transport, communications, and manufacturing all show signs of continued growth. Agriculture, however, has been experiencing stagnant growth rates.

US investment in Trinidad and Tobago exceeds US$1250 million. The U.S. investment average over the last four years was US$300 million per year.

GETTING FISCAL
The Government’s economic strategy is based on fiscal and monetary discipline, private sector investment, and export-led growth.

Reductions in subsidies to state enterprises have contributed to fiscal soundness and lent credibility to the Government’s ongoing divestment program. Companies all or partially divested since 1987 include the National Fisheries Company, Caribbean Airlines (formerly BWIA), National Flour Mills (NFM), the Trinidad and Tobago Electricity Commission, TT Methanol Company, Trinidad Cement, the Iron and Steel Company of Trinidad and Tobago (ISCOTT), and the Water and Sewerage Authority (WASA). BWIA has now been dissolved by the Government and replaced by a new carrier. In May 1997, the Government sold its remaining 69 per cent interest in the Trinidad and Tobago Methanol Company to a consortium consisting of the local firm CL Financial and Germany’s Ferrostaal and Helm. NFM was divested by an additional 14 per cent in 1997, bringing the Government’s holding down to 51 per cent. The Government is currently considering creating a holding company to bring its remaining shares in several formerly wholly Government-owned enterprises to market.

CORE SECTOR
Trinidad and Tobago’s infrastructure is adequate by regional standards. The national airport has recently been expanded. There is an extensive network of paved roads, and utilities are fairly reliable in the cities. Some areas, however, especially rural districts, need to improve infrastructure. Some companies currently constructing large industrial plants at the Point Lisas Industrial Estate in central Trinidad want assured water supply to their plants. The Government is addressing this problem with the construction of a desalinisation plant. Infrastructure improvement, especially rural roads and bridges, rural electrification and telephone service, and drainage and sewerage, are among the Government’s budget priorities, and are generously supported by the multilateral development agencies and the European Union.

Cellular service is widespread and has been the major area of growth for several years.

TRADING PARADISE
Trinidad and Tobago has always been a trader’s delight since the Europeans discovered the place. The Government of T&T has set up free trade zones for the development of trade. Free Zone incentives have been developed in Trinidad & Tobago to promote the establishment of companies which export 80% of their goods and services. The incentives include:

• No import/export licensing requirements
• Exemption from corporation tax
• No land or building taxes
• No work permit fees
• No VAT on goods supplied to the Zone
• No withholding taxes on remittance of profits, dividends and other distributions
• Duty-free items: capital goods; spare parts; raw materials; construction and set-up 

Fiscal Incentives
The Fiscal Incentives Act allows for the granting of a tax holiday (or partial holiday) for periods up to 10 years for the manufacture of approved products by approved enterprises. Approved enterprises fall into separate classifications including:

• Highly capital intensive enterprises investing in excess of TT$50 million (US$8.3million) 
• Export enclaves, where products are manufactured exclusively for export. 
• Enterprises using a significant portion of local inputs. 

These concessions are discretionary and require applications to the Ministry of Trade and Industry. Recent precedents include the grant of five year tax holidays to major petrochemical plants in Point Lisas. An approved enterprise will also be granted exemption from customs duties and VAT on the construction of the approved project. These projects have usually been large scale manufacturing within one of the three classifications, and are available only to locally incorporated companies. The tax exemption can be extended to dividends that may be tax exempt and free of non-resident withholding tax on any taxes in excess of the investor’s tax rate on the dividend in his country of residence.

FREE ZONES TO BUSINESS AND INVESTMENT OPPORTUNITY
Free Zone incentives have been developed in Trinidad and Tobago to promote the establishment of companies in Trinidad and Tobago that export the majority of their goods and services. Free Zone companies generally produce large volumes of goods or services and therefore offer potential to improve employment in this country. Under the Trinidad and Tobago Free Zones (Amendment) Act of 1995, an area may be designated a free zone, becoming eligible to the incentives under the Act. These incentives include:

• Exemption from customs duty on the importation of goods into the free zone 
• Exemption from withholding taxes on remittance of profits, dividends and other distributions
• Exemption from land and building taxes on land, buildings, improvements to buildings, plant and machinery in the free zone.

The prescribed activities which may be carried on in a free zone include: 

• Warehousing and storing 
• Loading and unloading operations
• Exporting
• Importing 
• Service operations, including banking
• Insurance and professional services
• Packaging and shipping
• Assembling, 
• Processing, refining, purifying and mixing
• Merchandising, including international trading on products. 

Approved Free Zone Companies cannot supply more than 20 per cent of goods produced in the Free Zone to the market in Trinidad and Tobago. They must also maintain separate accounts including the particulars of materials and goods imported, exported or used in manufacture within the Free Zone.
Another facilitator is the Trinidad and Tobago Free Zones Company Limited. It regulates companies in free zones and makes recommendations to the Ministry of Trade and Industry on enterprises eligible for free zone status. For more information contact: 

The Trinidad and Tobago Free Zones Company Limited, Albion Court, #61 Dundonald Street, Port of Spain, Tel: 1 868 623 8363, Fax: 1 868 625 4755.

The attractiveness of Free Trade Zones to investors lies in the availability of a menu of tax exemptions and incentives, which are not normally available to businesses outside of such zones. The real advantages which investors derive from the Free Zones is the comprehensiveness and consistency of the incentives and the transparency and objectives of the application process.

Phase 1 of the Free Zone encompasses an area of approximately 4.7 hectares (12 acres) with a mix of both land sites, covering a total area of 3.0 hectares (7.5 acres) and pre-built factory units with a total floor space of 2,3336.4 square meters (25,000 square feet). The land sites are available half-acre parcels (.2 hectares) and larger sites can be assembled to meet the requirements of the investor. 

Rebuilt factory accommodation is available in modular units of 5,000 square feet (0.5hectares), which can be assembled into larger units as required. Both types of accommodation are available for lease on competitive terms. All essential services, including a supply of natural gas, are available in the area. On site, there is an Administration Centre which houses personnel responsible for the management and maintenance of the facility, the provision of customs, and those who attend to the needs of tenants. 

The facility is completely fenced and protected by a 24-hour security presence. In time, PIDCOTT proposes to implement the second phase of the project, which will see the expansion of the Free Zone to incorporate an additional area of some 4.5 hectares.

For more information, contact PIDCOTT’s offices at:
Lot 3, Macoya, Industrial Estate 
Tunapuna, Trinidad
Tel/Fax: 1 868 662 1332/1345, 1 868 645 8548
E-mail property-info@tidco.co.tt

INTELLECTUAL PROPERTY
An important consideration that should be addressed by every prospective investor is the issue of the ownership and control of intellectual property rights that may be associated with the proposed business activity. This issue should encompass the legal and regulatory regime relative to trademarks, service marks, patents, copyrights and trade secrets.

Trinidad & Tobago’s economy and market have been rapidly liberalised and opened up to foreign participation. This has created significant business opportunities and made it important for many more foreign businesses to secure their valuable intellectual property rights in Trinidad and Tobago.

As part of the reform undertaken to improve the conditions for trade and investment, there has been a complete overhaul and modernisation of the country’s intellectual property laws.

Laws on Intellectual Property have been the subject of sweeping reform in order to bring existing legislation in line with world developments. As part of this process Trinidad & Tobago signed the Trade Mark Law Treaty (TLT) in October 1994 and the Trade Related Aspects of Intellectual Property (TRIPs) Agreement. Also in 1994, the Government of the Republic of Trinidad & Tobago entered into a Memorandum of Understanding with the Government of the United States of America concerning the protection of Intellectual Property Rights (“the Bilateral Agreement”).

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Trinidad & Tobago