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ACQUISTIONS & MERGERS
 T&T encourages companies to buy into firms in the country as this brings much needed capital. The acquisition of an existing business is most commonly achieved by the purchase of shares in an existing local company. As the change of ownership in the shares does not generally affect the target company’s assets and liabilities it is important that the investor conducts due diligence inquiries and incorporates in the share purchase agreement extensive warranties and indemnities so that it can recover an appropriate part of the purchase price if the company proves to have liabilities or other deficiencies which were not anticipated. As employees constitute one of the most important elements on a takeover an investor will want to ensure that any pension scheme operated by the existing business is properly funded. Additionally the investor will generally wish to restrain the vendor from carrying on a competing business in the immediate future following a sale. No capital gains, taxes or stamp duties are imposed on the transfer of stock listed on the Stock Exchange in accordance with its rules. Where the transfer is not in accordance with the rules of the Stock Exchange, stamp duty is charged at 5% of the market value of the transaction. There are no anti-trust laws limiting acquisitions but the Government has recently expressed an intention to introduce anti-monopolisation legislation. Under the Securities Industry Act a person who acquires l0% or more of the nominal share capital of a listed company must notify such company of the fact within 5 days of the event. Under the Companies Act 1995, a substantial shareholder of a public company is required to notify the company of such acquisition. Alternatively the acquisition of a business may be achieved by the purchase of the assets including the goodwill of the business. The assets purchase agreement will incorporate warranties relating to the business and the assets though less extensive than in a share purchase as the investor will only be liable for those liabilities expressly assumed by it and need not warrant against unexpected liabilities of the business. Where after the sale the business is conducted primarily with the same employees and conducting the same business, it will be treated as a successor organisation and therefore will be liable for termination benefits which accrue to employees prior to the take-over unless this is settled by the vendor at time of the sale. TAXATION
There are important tax issues which affect all aspects of foreign investment in Trinidad & Tobago, including the very decision to invest and the choice of structure to pursue the investment. As part of the undertaking to improve the conditions for investment, there have been a series of tax reforms including reductions in the rates of corporation and income tax and the implementation of a Value Added Tax. The principal direct taxes levied in Trinidad & Tobago are: Corporation Tax: A tax at the rate of 30% on the profits and short term gains of companies accruing in Trinidad & Tobago. Companies engaged in the following acitivities are charged tax at the rate of 35%: • liquefaction of natural gas;
• manufacture of petrochemicals;
• physical separation of liquids from a natural gas stream and natural gas processing from a natural gas stream;
• transmission and distribution of natural gas;
• wholesale marketing and distribution of petroleum products; and
• any other activity prescribed by Order of the Minister of Finance. Income Tax: A tax on income of individuals accruing in Trinidad & Tobago, on chargeable income at 25% up to $50,000, and 30% thereafter. Unemployment Levy: A tax at the rate of 5% on the profits of companies which are subject to the Petroleum Taxes Act. Business Levy:
A tax on gross revenue at the rate of 0.2% payable quarterly. Final liability is offset by corporation tax payable at year-end. There are certain exemptions from the business levy. Health Surcharge:
A tax levied at two rates based on income: $469.99 and under per month—$19.20 per month; over $469.99 per month—$33.00 per month. Petroleum Profits Tax: A tax at the rate of 50% on the profits earned by businesses in the course of petroleum operations falling under the Petroleum Taxes Act. Supplemental Petroleum Tax: A tax levied on the gross income of companies liable to petroleum profits tax at specified rates when the price of oil exceeds US$13.00 per barrel. Lands and Buildings Taxes: A tax based on the assessed values of lands and buildings at the rate of 7.5%. The assessed value is either 6% of the capital value or the annual rental value. Withholding Taxes: A tax based on various income payments to non-residents. Rates vary from 10-20% and may be reduced further by Double Taxation Treaties. Green Fund Levy: A tax on the gross income of companies and unincorporated associations at the rate of .1%. The tax is paid into a Fund which is distributed to organizations and communities for projects which relate to the remediation of reforestation and conservation of the environment. Trinidad & Tobago has a few indirect taxes too. The principal indirect taxes are: Value Added Tax: A tax on imports and on the commercial supply of goods and prescribed services levied on 15% of the value of the supply. Customs and Excise Duties: A tax at varying rates on imports and manufactured goods.
Import Surcharge: A tax on imports. Stamp Duty: A tax at varying rates on instruments. Financial Services Tax: A tax at the rate of 15% on financial transactions with banks, etc.
Motor Vehicles Tax: A tax at varying rates levied on sale of motor vehicles. Taxation of Corporations
Residence is determined by central control and management of the affairs of the company and this is usually, but not necessarily, where the Board of Directors meets. Local subsidiaries of non-resident corporations may, themselves, be non-resident if control and management take place abroad. Taxation of Individuals
 The individual who is resident and domiciled is subject to tax on his world-wide income. In the case of income arising outside of Trinidad & Tobago to persons who are not ordinarily resident or not domiciled in Trinidad & Tobago, tax is payable on the amount received in Trinidad & Tobago; but where the employment or office of such person is exercised in Trinidad & Tobago, gains or profits from such employment are taxed in T&T whether received in T&T or not. Salary and emoluments are subject to a withholding tax called ‘Pay As You Earn’ (P.A.Y.E.) which is deducted by the employer at time of payment of salary or other emoluments. Salary of non-residents arising here also attracts P.A.Y.E. but may be exempt under restricted provisions in double Taxation Treaties. Pension plans, individual retirement plans, savings plans and profit sharing plans which are not approved by the Board of Inland Revenue do not secure tax benefits for the employee. Current tax rates are from 25% on the first $50,000 of chargeable income and 30% thereafter. The taxpayer is entitled to a personal allowance of $25,000 and if over the age of 60 $40,000.00. Tax Treaties
Trinidad & Tobago has concluded double taxation treaties with India, Canada, France, Denmark, Germany, Italy, Norway, Switzerland, the United Kingdom, Venezuela, the United States and Caricom. The object of the treaties is the elimination of double taxation either by taxing the income only in one country or by providing a tax credit in the country of residence where the income has been taxed at source. As well as containing provisions to alleviate double taxation, the treaties also provide for the exchange of information (excluding trade secrets) when this is necessary to implement the treaty or prevent fraud. The following rates of withholding tax apply to non-treaty countries: • Individuals: 15% on dividends; 20% on royalties, interest and other payments
• Companies: 15% on dividends; 10% to a parent company; 20% on interest, royalties and other payments
• In instances where treaties have been negotiated, the rates have been reduced in respect of:
• dividends between l0% and 20%;
• interest between l0% and l5%; and
• royalties between 5% and 20%. INDIAN INVESTMENT
Indian entrepreneurs may soon be able to follow the story of millionaire Lakshmi Mittal who hit success by buying an ailing steel firm in Trinidad 17 years ago. They can establish value addition plants in Trinidad and Tobago and avail themselves of the preferential trade benefits available in the entire American continent.  Further groundwork was laid towards the signing of a bilateral investment treaty between Trinidad and Tobago and India during discussions Vice President Honourable Bhairon Singh Shekhawat had with President Honourable George Maxwell Richards and Prime Minister Honourable Patrick Manning recently.
T&T wants Indian entrepreneurs to straightaway set up fully owned plants in areas like health, information technology, film making, food and beverage, printing and packaging, and other sectors.
India is TT’s fourth largest nation in terms of foreign direct investment and TT benefits to the tune of US$28 million annually.
Speaking at a banquet hosted by President Richards, Vice President Shekhawat said, "We are pleased to see that the Indian companies have started investing here. The 1.2 billion dollar steel plant being set up by Essar Group, is one of the biggest Indian investment in the region." Shekhawat noted that negotiations for the bilateral investment, promotion and protection agreement had been concluded. The agreement is expected to be signed when TT’s Far East mission visits India as part of its tour to the region between February 26 to March 9 next year. That mission will also visit China, South Korea and Malaysia.  Mittal Steel Point Lisas is the largest steelmaker in the Caribbean and the largest non-oil industrial complex in Trinidad and Tobago. It benefits from reasonably priced, locally available natural gas and has a modern, captive marine terminal that handles cargo on a 24-hour basis. More than 90 per cent of its output is exported - to the Caribbean, Central and South America, Canada, the USA and the Far East.
Recently, the Indo-Trinidad financial ties got a further boost with the setting up of an equity fund—Savinvest India Asia Fund—by a non-resident Indian in the Caribbean nation.
FOREIGN RELATIONS
As the most industrialized and second-largest country in the English-speaking Caribbean, Trinidad and Tobago has taken a leading role in the Caribbean Community and Common Market (CARICOM), and strongly supports CARICOM economic integration efforts. CARICOM members are working to establish a Single Market and Economy (CSME). Trinidad and Tobago and two other CARICOM members have made strides toward launching the first phases of CSME by 2006. Trinidad and Tobago is active in the Summit of the Americas process of Organization of American States (OAS). It recently hosted hemisphere-wide ministerial meetings on energy (2004) and education (2005), as well as an OAS meeting on terrorism and security (also 2005). It also hosted a negotiating session in 2003 for the OAS Free Trade Area of the Americas, and aspires to hosting an eventual FTAA secretariat.  Trinidad and Tobago maintains close relations with its Caribbean neighbours and major North American and European trading partners. After its 1962 independence, Trinidad and Tobago joined the UN and the Commonwealth. In 1967, it became the first Commonwealth country to join the OAS. In 1995, Trinidad played host to the inaugural meeting of the Association of Caribbean States and has become the headquarters location for this 25-member grouping, which seeks to further economic progress and integration among its members.
TOURISM TAKES OFF
With a shoreline just seven miles from Venezuela, the flora and fauna of Trinidad & Tobago (usually shortened to T&T) have more in common with South America from which the islands separated a mere 10,000 years ago. Towering tropical rainforests, mountains and waterfalls, wetlands teaming with wildlife, and remote beaches where leatherback turtles create their own seasonal traffic jam are all on the menu of visitor experiences. Over 460 resident and migrant bird species have already made T&T one of the premier birding destinations in the world.  Unlike most Caribbean island nations hostage to tourism revenue, T&T’s economy is more healthily diversified with substantial exports of fruit, vegetables, sugar cane, natural gas and oil. Such economic diversity is allowing tourism to develop somewhat slowly, and hopefully in a more sustainable, grassroots manner than would otherwise be encouraged. Rest and relaxation mainstream tourists may choose to go elsewhere, but alternative travelers really have something to get their teeth into with these islands.
Trinidad, the most southerly island in the Caribbean Sea, is developing its remote area tourism, training local people to serve as guides and hosts for small-scale accommodation, and opening up access to some of the lesser-known parks and reserves for visitors with an exploratory streak.
Welcome to Trinidad and Tobago.
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