Trinidad & Tobago has adopted policy measures which have made it attractive to investors. The fiscal, regulatory and legal environment facilitates and supports foreign investments. The country has attracted more than US$4 billion in direct foreign investment from the USA during 1996.
In this article, Senator Philip Hamel-Smith (Senior Partner in M. Hamel-Smith & Co.) and Timothy Hamel-Smith (the Partner who heads M. Hamel-Smith & Co.'s Commercial Department) provide foreign investors with a general introduction to Trinidad & Tobago as a place to invest and do business.
SIZE
The Republic of Trinidad & Tobago comprises two islands. Trinidad, the larger, has an area of about 4827 square km. This makes it roughly the size of the State of Delaware. Tobago is smaller, with an area of about 300 square km.
LOCATION
Trinidad & Tobago is strategically located at the southern end of the chain of Caribbean islands and just off the north-eastern shoulder of South America. Trinidad is only 11 km off the eastern coast of Venezuela. Tobago is 32.2 km to the north-east of Trinidad.
Trinidad & Tobago Is Approximately:
- 613 km (flying time, 1.2 hours) from Caracas
- 2598 km (flying time, 3.75 hours) from Miami
- 3200 km (flying time, 4.8 hours) from New York
- 4000 km (flying time, 5.5 hours) from Toronto
- 6400 km (flying time, 8.7 hours) from London
COMMUNICATIONS
Air, sea and land transportation links are excellent. Both the international airport in Trinidad (Piarco) and that in Tobago (Crown Point) are served by several European and North American carriers as by the country's own airline, BWIA.
The two main international ports are at Port of Spain and Point Lisas, the most important industrial centre and heartland of the energy sector.
Telecommunications services are reliable and up-to-date, with state-of-the-art fibre optic trunk lines and cellular. The country is linked to a dedicated digital line positioning it on the network of global digital highways that has been developing in recent years.
CLIMATE
Located just over 10 degrees north of the equator and in the path of the Northeast trade winds, Trinidad & Tobago enjoys a tropical climate with very little change in temperature during the year. The annual temperatures range between about 21(C and 32(C.
The average annual rainfall is about 200 cm. There is a dry season, January to May, and a wet season, June to December.
Unlike the rest of the Caribbean, Trinidad & Tobago is fortunate to be south of the hurricane belt.
TIME ZONE
Trinidad & Tobago is on Greenwich Mean Time minus four hours. In Winter it is on US Eastern Standard Time plus one hour and in Summer it is on US Eastern Standard Time.
POPULATION
The population of Trinidad & Tobago was estimated in 1995 at 1.3 million. It comprises a mix of persons from just about every ethnic background, living in harmony. Religious tolerance allows for active observance of many faiths including, Christian, Hindu and Islam.
LANGUAGE
The official language is English. Facilities exist for foreign language dealings and translations, as may be required.
URBAN CENTRES
Port of Spain is the largest city and administrative capital of the Republic. San Fernando is the second city and industrial capital. The most important industrial centre is located at the port of Point Lisas. Scarborough is the administrative capital of Tobago.
CURRENCY
The currency unit is the Trinidad & Tobago dollar (TT$). A floating rate system was introduced on April 7, 1993 at the rate of TT$5.756 to US $1.00. The rate as at April 14, 1997 was TT$6.28 to US$1.00.
BUSINESS HOURS
Normal business hours are 8.00 am to 4.00 p.m. with banks closing at 2.00 p.m. Modern technology allows for banking transactions to continue 24 hours a day 7 days a week.
EDUCATION
Trinidad & Tobago has a well-educated population with high levels of literacy. The education system is modelled after the English system. Government schools and Denominational schools (owned and managed by various religious bodies) provide free education at the primary and secondary levels (i.e. up to Form 5 or Grade 12) and for some students for an additional two years to write "Advanced Level" examinations set by the Universities of Cambridge and London, England.
Private, fee-paying schools exist at both primary and secondary levels. Two of the private international schools are based on the American and Canadian systems. Further education at the University of the West Indies (UWI) is available at heavily subsidised rates and one of the campuses is in Trinidad. The others are located in Jamaica and Barbados. There are a number of other institutions of further education, including the Teaching and Medical Science facility at Mount Hope in Trinidad.
CULTURE, SPORT AND SOCIAL LIFE
Trinidad & Tobago's reputation as the Land of Steelband, Calypso and the Limbo is well-established. These are expressions of a vibrant, cosmopolitan people whose ancestors came from every corner of the world. The multi-cultural lifestyle is also reflected in a host of festivals. The annual Carnival is one of the world's biggest street festivals, and an experience never to be forgotten, with the rhythms of calypso music and the magnificent costumes of the masqueraders.
The tropical climate encourages outdoor activities including yachting, sports-fishing, windsurfing, scuba diving and golf. Excellent sport and recreational facilities are available and affordable.
The cultural diversity is further reflected in the wide range of food choices. There is also the choice of international cuisine and popular North American fast foods.
There are several art galleries which feature the works of both local and foreign artists. As well, there is theatre and dance.
The friendly attitude of the population encourages an amicable atmosphere for business discussions. Trinidadians and Tobagonians like to socialise and foreign visitors are warmly received. At the same time there is a serious-minded, professional approach to international business dealings.
THE POLITICAL SYSTEM
Trinidad & Tobago is a stable democratic nation. General elections are held at least every 5 years. All changes of Government have occurred through free and fair elections. Orderly and peaceful transitions of power are routine.
Trinidad & Tobago gained political independence from Britain in 1962. It became a Republic in 1976 and has remained a member of the British Commonwealth. Trinidad & Tobago follows the Westminster model of government, with a bicameral parliamentary system. The Parliament, which exercises legislative power, consists of the House of Representatives with thirty-six (36) elected members and the Senate which is the Upper House with thirty-one (31) members appointed by the President - 16 on the advice of the Prime Minister, 6 on the advice of the Leader of the Opposition, and 9 as Independents. Executive power lies with the Prime Minister and his Cabinet which is appointed from among members of Parliament. The Judiciary is independent of the other organs of government. Tobago has an elected House of Assembly which controls some of that island's internal affairs.
THE LEGAL SYSTEM
The Trinidad & Tobago Constitution provides entrenched protection of fundamental human rights and freedoms. These rights and freedoms are guaranteed to foreign investors in the same manner as they are guaranteed to Trinidad & Tobago nationals. The Constitution also guarantees the independence of the judiciary. Foreigners can expect to have their disputes impartially determined. Delays in the legal system are, however, a serious problem. Efforts are being made to tackle the backlog of cases with some considerable success to date.
Unless compromised, almost all commercial disputes are heard and determined by the Supreme Court. There is a three-tier system:
- In the High Court, all civil (non-criminal) trials are determined by a single judge without a jury.
- From the High Court a party can appeal as of right to the Court of Appeal, which sits with three judges.
- Appeals from the Court of Appeal lie to the Judicial Committee of the Privy Council as of right in almost all cases. The Privy Council is based in London, England and comprises essentially the same Judges as sit in the House of Lords to hear United Kingdom Appeals.
The law of Trinidad & Tobago is based upon the common law of England. Decisions of the Privy Council are binding on the lower courts. The principles derived from the decisions of the courts of the United Kingdom and other Commonwealth countries, particularly Australia, New Zealand and Canada, though not strictly binding, are applied. A growing body of local judicial precedent is also evolving.
THE FINANCIAL SYSTEM
The financial system is well-organised and soundly-regulated.
The Central Bank of Trinidad & Tobago determines monetary policy and sets discount rates and reserve requirements. It regulates operations of the commercial banks and other financial institutions.
There are 6 commercial banks with a total of 117 branches with an asset base of over US$20 billion. In addition there are non-bank financial institutions, merchant banks, finance houses, trust companies, mortgage finance institutions, mutual funds including a unit trust corporation, a secondary mortgage company and more than thirty (30) insurance companies. The Deposit Insurance Corporation guarantees deposits up to TT$50,000. There is also the National Insurance System and the Trinidad & Tobago Stock Exchange as well as a number of other development finance institutions catering for commercial, agricultural and small business development.
Internationally, Trinidad & Tobago is a member of the International Monetary Fund, the World Bank, the Inter-American Development Bank, and subscribes to the General Agreement of Tariffs and Trade. It is active in a number of regional, hemispheric and international organisations and enjoys a high reputation among members of these bodies.
THE ECONOMIC SYSTEM
The Trinidad & Tobago economy is the most diversified in the English speaking Caribbean. Nevertheless it remains heavily reliant on the oil, natural gas and petrochemical industries.
The country's hydrocarbon resources and, in particular, its natural gas (proven reserves are 12.3 trillion cubic feet) have enabled it to become the most industrialised Caribbean nation. Oil production and refining continue to be important but petrochemicals, and to a lesser extent steel, are assuming greater significance. When the latest methanol plant comes on stream, Trinidad & Tobago will be the largest exporter of methanol in the Western Hemisphere.
The government's economic policy is directed to the development of a robust and open market-driven economy. Trade liberalisation and public sector rationalisation are being pursued. Private enterprise is being strongly encouraged. While there is State involvement in public utilities and in oil, gas and petrochemicals the Government is intensifying its efforts at divesting ownership in these key areas. The Government has made a commitment to actively encourage foreign investment in Trinidad & Tobago. Legislation removing restrictions on foreign investment, removing foreign exchange control and providing various incentives to investors has been enacted.
Trinidad & Tobago experienced real growth rate of 3.5% in 1995 and further growth of 4.6% was projected for 1996. This makes three straight years of real growth after 8 years of economic decline. The estimated overall balance of payments projects a surplus of US$47.5 million in 1996 and further improvements are anticipated for 1997.
The inflation rate was estimated to be 5.4% at the end of 1995. A rate below 6% for 1996 was predicted for 1996. In 1995, Moody's rated the country's sovereign debt with a BA1 grade and in February 1996, Standard and Poor's assigned a BB+ Rating to Trinidad & Tobago's Foreign Currency Debt and a BBB+ Rating to its Local Currency Debt.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
