TRINIDAD & TOBAGO: An Introduction to General Business Law
With global economic growth remaining subdued, Trinidad and Tobago (T&T) is focused on securing a sustainable economic future via the diversification of its economy and ensuring that its energy sector remains resilient.
T&T’s inclusion in the Global Forum on Transparency and Exchange of Information for Tax Purposes’ list of non-compliant jurisdictions and, following that, its inclusion in the EU’s list of jurisdictions that are not co-operative for tax purposes, is still being addressed by its government, the Government of the Republic of Trinidad & Tobago, or GORTT, through various legislative measures and by reinforcing government institutions. Removal from these lists is critical to maintaining and attracting international investment and trade.
On the legislative front, the Trinidad and Tobago Special Economic Zones Act, No 58, of 2022 (SEZA), which lay down a new tax incentive regime, was fully enforced in July 2024. The new regime aims to provide greater transparency, being introduced partly in response to T&T becoming a member of the OECD’s Base Erosion and Profit Shifting project, which focuses on eliminating harmful tax practices. To encourage investors to see T&T as a viable business stronghold, incentives for businesses operating in these special economic zones include a reduced corporation tax rate, exemptions and waivers on customs duties, value added tax (VAT) and other taxes, as well as non-fiscal advantages, such as streamlined regulatory approvals.
A key measure was also the passing of various Miscellaneous Provisions Acts, including the pivotal Miscellaneous Provisions (Global Forum) Act 2024 which together amend the Companies Act, the Partnership Act, the Trustee Ordinance and the Non-Profit Organisations Act, among others, and are aimed at enhancing compliance with international tax standards by mandating greater transparency and compliance, including beneficial ownership reporting.
Further, in November 2024, GORTT signed the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters and enacted the Base Erosion and Profit-Shifting Inclusive Framework (Country-by-Country) Reporting Act, 2024 (not yet proclaimed) which seeks to provide country-by-country reporting (CBCR) legislation to meet T&T’s obligations to the Base Erosion and Profit Shifting Inclusive Framework.
From an institutional standpoint, the Trinidad and Tobago Revenue Authority Act (TTRA Act) has established the Trinidad and Tobago Revenue Authority (TTRA) which will replace the Board of Inland Revenue and other governmental tax departments, such as the Customs and Excise Division, with responsibility for the administration and enforcement of revenue laws including the assessment and collection of taxes. The TTRA Act is not fully proclaimed, and the operationalisation of the TTRA was subject to several legal challenges, with appeals reaching the JCPC. The GORTT has signalled its intention to make the TTRA law as quickly as possible.
By implementing these reforms, T&T not only seeks to address the EU and the Global Forum’s concerns but also positions itself as a more attractive destination for foreign investment, demonstrating its commitment to establishing a fair and accountable tax environment.
In pursuing the diversification of T&T’s economy, GORTT has reiterated its commitment to making the agricultural industry tax free. To achieve this, it is undertaking a comprehensive review of revenue laws to ensure that the necessary amendments can be made by the first quarter of 2025.
Although significant efforts are being made to develop other industries, the energy sector remains a cornerstone of T&T’s economy, largely driven by the exploitation of hydrocarbons. Despite fluctuating global energy prices and challenges in production rates, there is a very concerted drive by GORTT and upstream operators to alleviate these challenges. Exploration and production concessions were recently granted by GORTT for Blocks NCMA 2, Modified U(C) and Rio Claro, arising out of the 2023 Shallow Water and 2022 Onshore and Nearshore Competitive Bid Rounds. With the continued progression of the T&T-Venezuela cross-border Dragon Gas Project, as well as the Manatee Project, a significant amount of natural gas is expected to come onstream in T&T in the near future. Other major projects, such as the Calypso Project by Woodside Energy, are actively being progressed by upstream operators. These additional supplies of gas will be welcomed as T&T strives to maintain its position as a critical supplier of LNG to global markets.
As T&T moves toward the global energy transition, the reduction of greenhouse gas emissions and adoption of low carbon technologies play an important role as the exploitation of fossil fuels remain significant factors in the energy supply chain. GORTT remains keenly aware of the need to modernise and diversify its energy portfolio, with ongoing discussions around enhancing the regulatory framework to attract foreign investment and technology. In recent years, GORTT has unveiled plans for renewable energy projects such as the progression of the Brechin Castle solar farm project by a consortium of bp, Shell and NGC, as well as wind energy initiatives aimed at harnessing T&T’s coastal winds, including the commencement of the Onshore Wind Resource Assessment in Orange Valley and Galeota. Other initiatives include a green hydrogen project initiative by Kenesjay Green Ltd. and Hydrogen De France and the restructuring of the 4 Atlantic LNG trains in recognition of the significant role LNG plays in the energy transition. Additionally, efforts are being made to improve energy efficiency in industrial sectors and residential areas, supported by initiatives for adopting renewable technologies. The balance between traditional energy exploitation and sustainable practices is central to T&T’s strategy going forward.
In a post-pandemic world, T&T’s digitisation efforts have renewed discussions on bringing legislation governing electronic transactions and data protection fully into force. According to ministerial statements, GORTT is actively working towards the full operation of the ETA and DPA in the near future. As it stands, there are legislative provisions in force which generally give legal effect to electronic transactions, documents and signatures, but with certain specified exceptions. For example, conveyances of real or personal property or, the creation of wills require original signatures and documents and may not be executed electronically. As for the DPA, general privacy principles are established and in force, but the substantive provisions concerning the collection, storage and handling of private information and sanctions are not yet proclaimed.
GORTT’s Vision 2030 emphasises ESG (environmental, social and governance). Particular focus is being placed on climate change mitigation in the formation of national development objectives. The T&T private sector has already taken steps to implement ESG initiatives including the adoption of sustainable development practices. This suggests a change in the business landscape as local businesses and GORTT actively work toward limiting their carbon footprint. We anticipate that legislative and policy changes will soon be made to enhance T&T’s ESG commitments.