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INVESTMENT CLIMATE
The investment climate is good and almost all investment barriers have been eliminated. The Government continues to welcome foreign investors. The Government has a double taxation agreement, a bilateral investment treaty and an intellectual property rights agreement with the United States. Total foreign direct investment (FDI) has averaged $700 million annually over the last decade. The first major business-class hotel to be opened in several years bears the Marriott Courtyard brand. Hyatt has announced plans to manage a property at the multimillion-dollar port development project in Port of Spain.
Trinidad and Tobago’s infrastructure is adequate by regional standards. Expansion of the Crown Point airport on Tobago is being planned, which follows opening of the Piarco terminal on Trinidad. There is an extensive network of paved roads. Traffic is dense during peak hours as the booming economy makes people go for more and more cars. Trinidad and Tobago has to look at a mass transport system as an alternative.
Utilities are fairly reliable in cities. Infrastructure improvement is one of the Government’s budget priorities, especially rehabilitating rural roads and bridges, rural electrification, flood control and improved drainage and sewerage. A multi-year plan for light rail transport has been announced.
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Infrastructure improvement is one of the Government’s budget priorities, especially rehabilitating rural roads and bridges, rural electrification, flood control and improved drainage. A multi-year plan for light rail transport has been announced |
MAKING A CONNECTION
Telephone service is modern and reliable, although significantly more costly to consumers than comparable U.S. services, including for wireline, wireless and broadband services. Change began this year in the wireless market when the new Telecommunications Authority invited two firms to provide services alongside state-owned incumbent TSTT. 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. Major banks include Central Bank, Scotia Bank, RBTT, Republic Bank, Exim Bank, Royal Bank of Trinidad and Tobago Limited and First Citizens Bank. 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. 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 divestment program. 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.
 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. 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. FREE ZONES
Free Zone incentives have been developed to promote the establishment of companies 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. An area may be designated a free zone under the Trinidad and Tobago Free Zones (Amendment) Act of 1995. 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. ACQUISITIONS & 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.
TAXATION
There are tax issues which affect all aspects of foreign investment, 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.
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