The Heritage Foundation Index of Economic Freedom for 2017 ranked T&T 18th in the Western Hemisphere and 87th out of 180 countries worldwide. T&T scored 3.93 on the 2017 evaluation of the World Economic Forum’s Global Competitiveness Index. The Transparency International 2016 Corruption Perceptions Index ranked T&T 101st out of 176 countries.
The Government becomes involved in foreign investment when the investor is seeking fiscal incentives or concessions or exemptions, when the investor wishes to operate on a state-owned industrial park or when the planned activity requires a licence or environmental approval. In the case of the energy sector, licences are required for all aspects of petroleum operations, gas-based industries are located on state-owned industrial parks and memoranda of understanding, gas supply and pricing arrangements or framework agreements usually involve The National Gas Company of Trinidad and Tobago Limited (NGC) and/or National Energy Corporation of Trinidad and Tobago (National Energy).
Foreign ownership of companies is permitted and welcomed under the Foreign Investment Act. T&T is host to major foreign investors from a number of countries around the world in key economic sectors. The countries include: US, Canada, the United Kingdom, Germany, Sweden, Denmark, Switzerland, France, Luxembourg, Norway, Spain, Netherlands, India, Japan, Korea, Belize, Guatemala, Brazil, Australia, and CARICOM states. In the energy sector there are major investors from the United Kingdom, the United States, Canada, Spain and Australia,
The availability and reliability of natural gas supply has attracted much of the investment in heavy industry to date. As a result the bulk of foreign investment is in that sector. In 2016, the energy sector accounted for 78% of FDI inflows. However, there is evidence of growing interest among investors in the non-oil sectors of the economy, in areas such as information technology, steel, desalination plants, wood and wood products, and the entertainment industry.
The UNCTAD World Investment Report 2016 stated that in 2015 T&T was the largest recipient of FDI inflows in the Caribbean.
The Foreign Investment Act and the Companies Act provide for the acquisition of an interest in land or shares in local private or public companies and for the formation of companies by foreign investors. The Companies Act is based on the Canadian Corporations Act. Company registration begins with the name approval process; thereafter, registration may take about five working days.
Trademark legislation provides for the registration of distinctive trademarks in respect of goods and services. Intellectual property rights are managed by an Intellectual Property Office through which industrial property is also protected by the registration of original or novel industrial designs.
Money laundering and terrorism activities are monitored through the Financial Institutions Act and Financial Obligations Regulations, Anti-terrorism and Proceeds of Crime Acts.
There are no restrictions on repatriation of capital, profits, dividends, interest, distributions or gains on investment. Repatriation may be effected through the commercial banking sector. There remains the liability to pay withholding tax where applicable.
Bilateral Investment Agreements between T&T and the Unites States, the United Kingdom, Ireland and France guarantee investors from those countries a level playing field. There is also an Intellectual Property and Rights Agreement with the United States.
T&T has moderate tax rates. Taxes and the regulations pertaining thereto are contained in the Income Tax Act. There is a flat personal income tax rate of 25% and a corporation tax rate of 25%which is not applicable to companies engaged in oil and gas production. Corporation tax is paid quarterly. Other taxes include VAT at 15% on applicable products and services and withholding tax of 15-20%. The latter tax is applicable to the profits of branches of non-resident companies (after making deductions for corporation tax) which are not re-invested (other than in replacement of fixed assets). Investment Allowances are provided under the Income Tax in Aid of Industry Act.
T&T has a well-developed capital market including a small but well-developed stock market. A full range of credit instruments is available to the private sector and there are no restrictions on borrowing by foreign investors.
The legal, regulatory and accounting systems governing credit markets are, on the whole, effective and transparent. The Insurance Act and Securities Industry Act are geared towards improving the market’s transparency. An independent Securities and Exchange Commission supervises and regulates the securities market. There is also a Financial Institutions Act which modernises regulation of banks, insurance companies, and other financial institutions. International accounting firms are represented in T& T including Pannell Kerr Forster, KPMG, PWC and Ernst & Young.
The banking system is competitive and sound and has a mix of local and foreign banks, whose operations are guided by the Financial Institutions Act and regulated by the Central Bank.
In 2010, the Government of T&T commenced the process of accession to membership of EITI. Through this initiative T&T will subscribe to greater transparency with respect to revenues received from the extractive industries (oil and gas upstream activities).