Trinidad and Tobago: Investing
UNCTAD lists Trinidad and Tobago among the five bottom economies in Latin America and the Caribbean region. According to the UNCTAD'S 2022 World Investment Report, FDI inflows increased from USD -103 million in 2020 to USD 342 million in 2021, mainly led by energy exploration and production ( which accounts for approximately half of GDP), petrochemicals, and steel. Greenfield Investments also increased in 2021, totalling USD 138 million. Furthermore, the total stock of FDI remained high at USD 8.6 billion in 2021. Traditionally, hydrocarbons, petrochemicals, and metals are the sectors that attract most FDI while the main investing countries include the US, China, the UK and Canada.
Trinidad and Tobago benefits from an English-speaking population, a stable political system, and access to cheap energy. The relatively flexible labour market facilitates the matching of jobs with available workers. Property rights are well protected. The judiciary is independent but somewhat subject to political pressures. The Foreign Investment Act does not discriminate against foreign investors and does not limit their ownership rights (although a license is required to own more than a 30% of a public company). However, factors that discourage foreign investment include difficult weather conditions and the country's heavy dependence on oil prices on the international market. Aware of the very limited scale of economic diversification, the government seeks to enhance local productive capabilities by attracting in FDI to energy (petrochemicals in particular) and non-energy (tourism, agri-food, finance, etc.) sectors. In fact, the government has created an investment promotion agency, InvesTT. To further promote investment, authorities seek to establish a favourable legal context for the development of public-private partnerships aimed at increasing the quality of the country’s infrastructures. Indeed, there have been some significant investments made in the country in recent years. China, in particular, has been tightening its relations with Trinidad and Tobago, with the two countries signing a Belt and Road memorandum and the Asian giant carrying on several projects in the Caribbean country (like a USD 500 million dry-dock and a USD 102 million industrial park in La Brea).
| Trinidad and Tobago | Latin America & Caribbean | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 4.0 | 4.1 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 9.0 | 5.2 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 8.0 | 6.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
| Foreign Direct Investment | 2020 | 2021 | 2022 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 1,056 | -1,008 | -493 |
| FDI Stock (million USD) | 10,398.2 | 8,851.1 | 8,358.0 |
| Number of Greenfield Investments* | 1.0 | 2.0 | 4.0 |
| Value of Greenfield Investments (million USD) | 1 | 126 | 188 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Personal income tax | |
| Income below TTD 1 million | 25% |
| Income in excess of TTD 1 million | 30% |
| Trinidad and Tobago | Latin America & Caribbean | United States | Germany | |
|---|---|---|---|---|
| Number of Payments of Taxes per Year | 39.0 | 28.2 | 10.6 | 9.0 |
| Time Taken For Administrative Formalities (Hours) | 210.0 | 327.5 | 175.0 | 218.0 |
| Total Share of Taxes (% of Profit) | 40.5 | 46.8 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
| Setting Up a Company | Trinidad and Tobago | Latin America & Caribbean |
|---|---|---|
| Procedures (number) | 7.00 | 8.00 |
| Time (days) | 10.50 | 25.22 |
Source: Doing Business.
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Latest Update: September 2023
