TRINIDAD & TOBAGO: An Introduction to General Business Law

Trinidad and Tobago (“T&T”) is a dynamic twin-island republic in the Caribbean with diverse business opportunities in fields ranging from oil and gas to tourism. As a former British colony, its legal system is based on the common law of England and statutes of general application in force in England in 1848 as modified by subsequent local legislation. Local legislation is often derived from or based on English statutes and in recent times other Commonwealth States. In fact, the Judicial Committee of the Privy Council in London remains the country’s highest court of appeal in all matters save for CARICOM Treaty-related disputes, where original and final jurisdiction now lies with the Caribbean Court of Justice.

T&T’s judicial system, like that of many other countries, has been affected by the COVID-19 pandemic, resulting in the implementation of electronic filing in the High Court and Court of Appeal and the introduction of some matters being managed or tried virtually in the High Court, Court of Appeal and various specialist courts such as the Tax Appeal Board and Industrial Court. For the law term 2020–2021, out of a total of 4,312 civil matters filed with the High Court and Court of Appeal, 3,025 have been decided. Notably, most of the cases filed were with respect to commercial disputes (973) which also saw the highest number of appeals to the Court of Appeal.

Despite these significant strides, the challenges caused by delays in having matters decided (attributable to both the readiness of the parties and the availability of judicial time) persist. Alternative dispute resolution remains available to parties through judicial settlement conferences as supervised by High Court judges or mediation. Private settlement is also encouraged through the promotion of pre-action protocols under civil proceedings rules. Arbitration is also another means by which matters can be resolved and is often favoured by commercial parties. Foreign clients doing business in T&T remain satisfied with the ability to have foreign judgments enforced by the local courts either by way of registration under statute or by common law.

From a fiscal perspective, various measures to encourage investment in T&T have recently been introduced. These include an increase in the registration threshold for Value Added Tax (“VAT”) so as to provide relief and support for small and medium enterprises; renewable energy rebates for approved agricultural holdings; the introduction of a one-time manufacturing credit for companies which make an investment in new machinery, production lines, and equipment; and a temporary VAT zero-rating of new equipment for manufacturing companies utilising alternate energy technologies and renewable energy options.

As it relates to the traditional T&T energy sector (oil and gas), there has been: a reduction in the rate of Petroleum Profits Tax (PPT) from 35% to 30% for companies engaged in deep water exploration to incentivise crude oil production; an increase in the Investment Tax Credit for energy companies from 25% to 30% to stimulate exploration and development-related investments in the energy sector; and a reform of supplemental petroleum tax which includes a lower rate for small onshore producers and lower base rates for new field development and new wells in existing shallow marine areas.

While the exploitation of hydrocarbons continues to dominate T&T’s economy, key industry players have highlighted the significance of the global and regional energy transition with several initiatives being explored locally, including: the continued progression of a proposed twin solar power farm project by a BP and Shell consortium; T&T’s first Carbon Capture and Storage mapping project via the establishment of a Carbon Capture and Carbon Dioxide Enhanced Oil Recovery Steering Committee to manage the implementation of a CO2 EOR Project (duly supported by the University of the West Indies, University of Trinidad and Tobago and BP); a green hydrogen project initiative by Kenesjay Green Ltd and Hydrogen De France; and the restructuring and consolidation of the four Atlantic LNG trains (the first of which is currently mothballed) in recognition of the significant role LNG has to play in the energy transition.

The par value of the T&T dollar is floated against the US dollar and consequently against every other foreign currency. There are no exchange controls on the negotiation of contracts, payment of obligations and holding of bank accounts in foreign currency. There is also no requirement for exchange control approval for foreign investments or the payments or repatriation of capital from T&T to a foreign country. The Exchange and Control Act however limits the purchase and sale of foreign currency to and by authorised dealers. In recent years T&T has however experienced occasional foreign currency shortages in the local foreign currency market due to the vagaries of the oil and gas markets.

There have been recent legislative measures which significantly affect doing business in T&T.

The Fair Trading Act 2006 (“FTA”) is T&T’s primary antitrust legislation and previously remained only partially in force for over a decade. In February 2020, the substantive sections of the FTA were brought into effect with extensive implications and wide jurisdiction given to the Fair Trading Commission (“FTC”) as the regulator. The FTA establishes a legal and institutional framework for the enforcement of competition policy in T&T and restricts/prohibits three main activities: anti-competitive mergers, anti-competitive agreements and activities, and abuse of monopoly power. The FTA’s merger control restrictions are of particular interest as enterprises are prohibited from entering into a merger where their combined assets exceed TT$50 million dollars and at least one such enterprise carries on or intends to carry on business in T&T, unless the prior permission from the FTC is obtained. Thus far the FTC has however proven responsive to applications and several larger mergers have been approved without undue delay.

While it is relatively easy to incorporate limited or unlimited liability companies in T&T and have such companies issue shares, foreign investors incorporating and taking up shares in such companies are subject to additional administrative requirements. With respect to shares issued by private limited T&T companies, certain particulars must first be filed with the Minister of Finance and such shares must be paid for in an internationally traded currency through an authorised trader in such currency (typically a local commercial bank). Non-resident companies registered in a foreign jurisdiction can also formally register a branch in T&T, known as an external company. In 2019 substantive amendments were made to the Companies Act concerning the issuance of bearer shares and share warrants by T&T and external companies and the regulation of the beneficial ownership and transfer/issue of shares in T&T companies. Several new penalties for non-compliance were also introduced. T&T companies are now mandated to ascertain and obtain information of all beneficial owners on an annual basis. Non-beneficial shareholders and beneficial owners are required to submit the relevant prescribed declarations to the T&T company within a specified timeframe. Former and new beneficial owners are also required to submit declarations where there has been any change in or the acquisition of beneficial ownership of a T&T company.

In June 2020 the Trade Marks Act No. 8 of 2015 (“the New TM Act”) was brought into force and repealed and replaced the former Trade Marks Act. The New TM Act modernises the local trade marks system by inter alia recognising the system of international trade mark filings through the Madrid Protocol, introducing electronic filing of trade mark transactions with the local Intellectual Property Office and increasing protection for well-known marks. Additionally, more robust legislation has been included in the New TM Act regulating border enforcement against counterfeit goods. The Trade Marks (Border Enforcement Measures) Regulations 2020, made pursuant to the New TM Act, set out the provisions for inter alia the detention, seizure and forfeiture of counterfeit goods. On the basis of the border enforcement provisions, the Customs and Excise Division, through the newly developed Intellectual Property Infringement Unit, has substantially increased its detention of counterfeit goods and there has been steady involvement by brand owners (local and international) to request the seizure of these goods while trade mark infringement proceedings are commenced against infringers.

T&T remains committed to promoting and sustaining economic development. In recent reports, the Inter-American Development Bank predicts that after two years the T&T economy is expected to maintain moderate levels of growth through 2024. This is encouraging to investors seeking to do business in T&T.