Several new developments have expanded the scope of Trinidad and Tobago's legal framework in a variety of sectors

Throughout its history the twin-island nation of Trinidad and Tobago changed hands between several different European powers, before eventually becoming an English colony.

T&T became an independent member of the Commonwealth in 1962. The country attained the status of an independent republic on August 1, 1976 and is now governed by the 1976 Constitution.

It is a democratic country and is one of the leading islands in terms of oil and energy in the Caribbean – often described as the powerhouse of the region in this regard. In addition to being the largest oil and natural gas producer in the Caribbean, T&T is one of the world’s largest exporters of ammonia and the second-largest exporter of methanol.

Furthermore, Trinidad is home to the world’s largest deposit of asphalt, which is located in the Southern Peninsula. For its part, Tobago’s economy is largely dependent on the tourism sector.

Legal System

T&T has a bicameral parliament and, due to the British influence, it is based on the Westminster system. Its legal system is based on English common law, with its laws comprising:

• The Constitution;

• Statutes enacted by parliament;

• Subsidiary legislation; and

• The common law of England in force as of 1848. The republic’s judicial system is a three-tier system comprising the High Court of Justice. Appeals are made to the Court of Appeal, and thereafter to the highest court, the Judicial Committee of the Privy Council, which is located in London. There are also numerous Magistrates’ (or district) Courts, an Industrial Court, a Tax Appeal Board, a Family Court and an Environmental Commission.

General Investment Framework

The government of T&T has always been open to and has encouraged foreign investment. This is supported by the introduction of the Foreign Investment Act Chapter 70:07. This act regulates and protects foreign investors. The government has also established InvesTT, with the aim of providing foreign investors with the knowledge, tools, linkages and assistance needed to understand the local environment and benefit from the local business opportunities.

Bilateral Agreements

In order to afford some level of protection to foreign investors, there are a number of bilateral investment agreements, which guarantee foreign investors a level playing field, existing between T&T and the UK, Canada, Switzerland, the US, France, Cuba, India, Germany, China, Spain, Mexico and South Korea.

Additionally, a bilateral investment treaty and an intellectual property and rights agreement have been entered into with the US. The bilateral investment treaty addresses the following points:

• The treatment of foreign investments should be no less favourable than that accorded domestic investments (national treatment);

• A prohibition against expropriation of an investment without just compensation, calculated as the equivalent to the fair market value of the expropriated investment immediately before expropriatory action;

• Investments suffering losses from war or similar events should be accorded national treatment;

• Allowance of financial transfers relating to the investments to be made freely and without delay into and out of each country;

• A provision to ease requirements relating to entry, sojourn and employment of aliens for establishing foreign investment of a substantial capital amount;

• A prohibition against performance requirements as a condition for investment; and

• A provision for dispute resolution alternatives, including binding arbitration.

Corporate Vehicle

In T&T there are a number of ways a firm can choose to do business. An investor may form a limited liability company (LLC), register an external branch company, start a partnership, establish a joint venture, or may even acquire or merge with an existing company. There are usually no minimum capitalisation requirements, which makes the process of incorporating a company in T&T very simple and straightforward.

Where a foreign investor is acquiring shares in a local company, that investor is required to provide notice of the acquisition to the Ministry of Finance and the Economy in compliance with the form set out in the Foreign Investment Act Chapter 70:07.

Banking & Financial Services

The Central Bank of T&T (CBTT) regulates institutions that conduct banking business or any business of a financial nature in accordance with the Financial Institutions Act 2008. Where a company wishes to establish a commercial bank, the applicant is required to have a minimum stated capital of TT$15m ($2.3m), or such larger amount as may be specified from time to time. Where an investor intends to become a controlling shareholder of a bank, he or she must also apply to the central bank for approval.

Insurance

All insurance firms are also regulated by the CBTT, through which all applications and approvals must be transmitted. To be registered as an insurance company, applicants are required to go through an approval process with the central bank by submitting a number of documents for its review. There is a minimum statutory fund to be maintained, of which only a certain percentage is allowed to be held in foreign investments.

Telecoms

The country’s communications sector is regulated by the Telecommunications Authority of T&T (TATT). This authority must approve the grant or transfer of any licences granted. Any change of control must be approved by the TATT or it may amount to a breach of the licence granted.

Acquisitions

Certain acquisitions may, under specific circumstances, be subject to a number of regulations and statutory approvals. In the case of the acquisition of any shares that are publicly listed on the T&T Stock Exchange, an investor would have to comply with the following laws:

• The Securities Act;

• The Companies Act; and

• The Foreign Investment Act. Such transactions are also subject to the Take-over By-laws 2005 kept alive by the Securities Act, 2012.

Foreign investors may not acquire shares in a local public company without obtaining a licence where the shareholding either directly or indirectly results in 30% or more of the total cumulative shareholding. Where a foreign investor is acquiring shares in a private firm, they need only give notice to the Ministry of Finance and the Economy prior to doing so.

Intellectual Property Rights

The function of the registration and protection of intellectual property rights is overseen by the Intellectual Property Office at the Ministry of Legal Affairs.

T&T is also a member of the World Intellectual Property Organisation (WIPO) and a signatory to a number of relevant treaties and agreements, including but not limited to:

• The WIPO Copyright Treaty (November 28, 2008);

• The WIPO Performances and Phonograms Treaty (November 28, 2008);

• The Trademark Law Treaty (April 16, 1998);

• The Strasbourg Agreement Concerning the International Patent Classification (December 20, 1996);

• The Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite (November 1, 1996);

• The Locarno Agreement Establishing an International Classification for Industrial Designs (March 20, 1996);

• The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (March 20, 1996);

• The Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (March 20, 1996);

• The Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure (March 10, 1994);

• The Patent Cooperation Treaty (March 10, 1994);

• The Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms (October 1, 1988);

• The Berne Convention for the Protection of Literary and Artistic Works (August 16, 1988);

• The Convention Establishing the World Intellectual Property Organisation (August 16, 1988); and

• The Paris Convention for the Protection of Industrial Property (August 1, 1964). Trademarks are currently governed by the Trademark Act Chapter 82:36, and in April 2014 a new Trademark Act was enacted that will make trademark registration a relatively easier process.

The new act is awaiting the president’s assent and proclamation. Once in place, it will become sufficient that a trademark is distinguishable from others to qualify for registration, thus lowering the threshold for the protection that is derived from registration. Furthermore, under the new act, sounds, tastes and smells that are capable of being represented graphically are also eligible for registration.

T&T adheres to common law principles, and protection may also be sought through a common law passing-off an unregistered trademark, as well as, in some circumstances, an action under the Protection Against Unfair Competition Act Chapter 82:36.

Patents are also registrable in T&T under three designations: Patent Cooperation Treaty patents, Paris Convention patents and local patents. New plant varieties are also protected under the Protection of New Plant Varieties Act Chapter 82:75.

Labour & Related Issues

In T&T an employment contract may be carried out either orally or in writing; may be express or implied; and is governed by a combination of industrial relations practices and principles, and legislation.

Most aspects of private sector employment are based on collective/private bargaining between the employer and the employee or their representative union. However, there are legislative regulations with regard to some aspects of the employment relationship, including minimum wage, maternity leave, redundancy, retrenchment and severance benefits, workmen’s compensation, and health and safety.

Employers and employees are free to negotiate matters such as the provision of health insurance, pension plans, bereavement leave, vacation leave, sick leave and age of retirement.

Minimum Wage

In accordance with the Minimum Wages Order 2014, Legal Notice No. 402, which went into effect on January 1, 2015, the minimum wage in T&T was increased from TT$12.50 ($1.93) per hour to TT$15.00 ($2.31) per hour. The new minimum wage is exclusive of gratuities and commissions. These calculations are based on a 40-hour workweek.

Maternity Leave

Under the Maternity Protection Act Chapter 45:57, a female employee qualifies for 13 weeks of maternity leave once she has worked continuously for at least one year. While on leave, the employee is entitled to receive pay to an amount equivalent to one month’s leave with full pay and two months’ leave with half pay.

Redundancy & Severance

Under the Retrenchment and Severance Benefits Act Chapter 88:13, an employer’s obligation to pay severance is actuated when a worker’s employment is terminated on the ground of redundancy. Redundancy is defined under the act as “the existence of a surplus of labour in an undertaking for whatever cause”.

This act applies only to employees who fall within the definition of “worker” under the Industrial Relations Act and who have completed at least one year of service. Also under this act severance benefits are applicable only upon termination for redundancy and not on termination for any other cause. The act provides for notice, negotiation and calculation by a prescribed method of the said benefits.

Workmen's Compensation

The Workmen’s Compensation Act Chapter 88:05 sets out the scheme for financial compensation in respect of the death or injury of a worker caused by an accident arising from and in the course of his or her employment. An employer is required to have a policy of insurance in force to cover workmen’s compensation.

Compensation under this act is based upon a prescribed scale. However, there is also civil liability for accidents in the workplace caused by the employer’s failure to provide a safe system of work.

Occupational Health & Safety

The health, safety and well-being of employees in T&T are regulated by the Occupational Health and Safety Act, 2004, as amended. The duties of an employer centre on the general duty to provide, as far as is reasonably practicable: the safety, health and welfare of all employees; adequate and suitable protective equipment at no cost to the employee; and adequate training, instruction and supervision. Employees have the right to refuse unsafe work where there is exposure to imminent danger or a perceived risk to health and safety in the workplace.

Regulations on Termination

Under common law, the employer has the power to terminate an employee’s tenure at will, subject to what is considered to be good industrial relations practice.

It is an implied term that notice will be given, and the period of notice is usually referable to the basis on which the employee is paid.

If there are no express terms in the employment contract regarding notice, the courts will imply a period that is reasonable in the circumstances of the particular case. An employer is entitled to pay monetary compensation in lieu of notice.

In the case of termination for cause, the employer must comply with the rules of natural justice, in addition to supplying the reason for the dismissal and providing the employee with the opportunity to respond to the allegations that constitute the grounds for the same.

Remedies for Wrongful Dismissal

The remedies for wrongful dismissal depend upon whether or not the worker is a “worker” as defined under the Industrial Relations Act. A worker under the act through his or her union, failing successful negotiation with the employer, can have the matter heard and determined by the Industrial Court, which, in addition to granting compensation or damages, can order that the worker be reinstated.

Employees who fall outside of the act are restricted to the High Court, which can only mandate damages and/or monetary compensation.

Trade Unions

Every worker within the definition of the Industrial Relations Act has a right to join a trade union or unions of his or her choice. The act establishes the process for the certification of trade unions and the formal recognition of majority unions for constituting the bargaining unit at the workplace. Registered collective agreements are binding and directly enforceable in the Industrial Court.

Immigration

By virtue of the Immigration Act Chapter 18:01, persons who are not citizens or residents of T&T, or do not hold of a Certificate of Recognition of CARICOM Skills Qualification, are not permitted to work in T&T for a period in excess of 30 days, unless they hold a valid work permit.

No work permit is required where a person desires to work in T&T for a single period not exceeding 30 days in any one period of 12 consecutive months.

A work permit will only be issued where a citizen or resident of T&T cannot be found to perform the tasks in respect of which the application is made. Work permits must be obtained before admission into the country and are granted for a maximum of three years consecutively. A work permit when issued is for a specified period of time and is particular to a specific person and for attachment to a designated company or institution. A work permit application may be made on behalf of a person by a company based in T&T that wishes to employ such person, or by an appointed attorney in T&T, or an appointed company in T&T acting on behalf of a foreign-based firm. In the case of a self-employed person, the application for a work permit must be filed by an attorney that is practising in T&T.

Caricom Nationals

Under the free movement clause of the CARICOM Single Market and Economy, which is incorporated in T&T under the provisions of the Immigration (Caribbean Community Skilled Nationals) Act Chapter 18:03, skilled persons are entitled to move and work freely throughout the region without the need for work permits.

The categories of persons to whom this provision applies include university graduates, media practitioners, artists, musicians, athletes, professional nurses, qualified teachers, artisans with Caribbean Vocational Qualification (CVQ), holders of associate degrees, household domestics with a CVQ or equivalent qualification.

A Certificate of Recognition of CARICOM Skills Qualification – which can be obtained from the relevant authority in the particular member state – is used to facilitate the movement of any of the above-mentioned individuals.

Capital & Profit Transfer

Repatriation of profits is subject to withholding tax. This tax may be reduced even to 0% if there is a double taxation treaty between T&T and the other jurisdiction.

Where dividends are paid to non-resident companies and individuals, the rate of withholding tax is generally 10%. However, where the enterprise controls 50% or more of the voting power, dividends are subject to a 5% rate of withholding tax.

Interest paid to non-residents not carrying on a trade or business in T&T is subject to a final withholding tax of 15%, whether paid to a company or an individual. Other payments also come under withholding tax regulations at a rate of 15%, whether a company or individual. This also includes royalties, management charges, rentals, annuities premiums, commissions, fees and licences.

Currency Regulations

Foreign exchange in T&T is governed by the Exchange Control Act Chapter 79:50. The T&T dollar floats against the US dollar, and as a result, floats against all currencies. The rate of exchange is therefore based on the prevailing international market rates.

There are currently no restrictions on buying, selling or lending foreign currencies, and within the country this can be done at authorised dealers. There are no restrictions on the use of the currency or the period in which it should be used.

There is no need in the case of investments made from abroad to obtain exchange control approval before the investment is made, and loans may now be made to non-residents without the approval of the central bank. Residents of T&T are able to maintain foreign currency accounts at all of the major banks that credit money in the foreign currency of their choice. The balances on these accounts are typically freely transferable.

Anti-Money Laundering

The Financial Intelligence Unit (FIU) was established pursuant to the Financial Intelligence Act of 2009 Chapter 77:01, to implement all anti-money-laundering regulations and to combat the financing of terrorism in accordance with the policies of the Financial Action Task Force (FATF). The FATF is an intergovernmental organisation that was set up in 1989 by the G7 industrialised countries to combat such practices.

Pursuant to a suite of legislation, including the Financial Intelligence Act of 2009 Chapter 77:01, the Proceeds of Crime Act Chapter 11:27 (as amended) and the Anti-Terrorism Act Chapter 12:07 (as amended), persons and/or companies which carry on business as a financial institution, cooperative society, remittance service provider, postal service provider, real estate agent, motor vehicles seller, money or value transfer service provider, gaming house or pool betting service provider, national lottery online betting games, jeweller, private member’s club, accountant, attorney-at-law, building society, art dealer, trust and company service provider or insurance provider must register with the FIU.

These entities are required by law to operate comprehensive know-your-customer due diligence – with a particular emphasis placed on identity and source of funds on existing and potential clients.

Doing Business with the Government

Depending on their nature, projects are tendered through the Central Tenders Board or through the relevant ministries. A new Public Procurement and Disposal of Public Property Act, 2015 was assented to and became law on January 14, 2015.

The crux of this act is the mandatory compliance with the principles of good governance, namely, accountability and transparency, as well as value for money and the objectives of ethics, efficiency, fairness and competition by all involved in a public procurement transaction.

The act does not specify detailed rules and procedures to be followed by procuring agencies, but provides for the implementation of mandatory National Procurement Guidelines. Any procurement of goods, works or services, or retention or disposal of public property that is not done in accordance with the act shall be void and illegal.

In carrying out its monitoring function, the Office of Procurement Legislation may conduct audits as well as periodic inspection of public bodies and issue directions to them. Any public body or person that fails to comply with such a direction without reasonable justification is liable on summary conviction to a fine of $100,000. The government has also signalled its willingness to engage foreign investors on public-private partnership projects.

There are a number of incentives for doing business coordinated through the various government ministries. These include: exemption from corporation tax on profits and from tax on dividends; loss write-off provisions; and supply of industrial sites, developed industrial accommodation and free zones under Act 19 of 1998, among many other things.

Free Zones

The T&T Free Zones Company (TTFZ) also accepts business plans from LLCs that wish to undertake activities in a free zone. The following projects can qualify for free zones status:

• Manufacturing, including assembly;

• Provision of services; or

• International trading in products, including regional distribution. LLCs incorporated or registered in T&T can apply to undertake activities in a free zone by submitting a business plan to TTFZ that has detailed information regarding jobs, skills, export markets, environmental and planning considerations, feasibility studies and evidence of compliance with provisions of the act and other relevant regulations.

If the LLC’s business plan satisfies the established criteria, the company in question will be provided with the appropriate free zone application form for designation of a free zone and/or approval of an activity. After this has been completed and submitted, TTFZ will advise the LLC about the operating terms and conditions as well as the annual licence fee that is applicable to the project.

The government also offers incentives to local and foreign investors and local manufacturers to undertake certain investment projects. Section 56 of the Customs Act Chapter 78:01 provides for import duty concessions to encourage industrial development, promote investment and facilitate trade.

Acquiring Real Estate

Real estate in T&T is generally classified into public or state lands and private lands. There are two systems of land holding in T&T existing simultaneously.

The first system of land holding in T&T is the common law system, which is governed by the Conveyancing and Law of Property Act Chapter 56:01, whereby land transactions are carried out under a registration of deeds system.

The second system of land holding is a registration of title system, which is governed by the Real Property Act Chapter 56:02 (RPA system). A key feature of the RPA system is the indefeasibility of a title, whereby the register is considered conclusive evidence of the interests notified therein, and any person deprived of an interest in land by fraud may take up their claim with the Land Assurance Fund.

The process of acquiring real estate in T&T is set out below. After the vendor and the purchaser agree on the sales price, they will enter into a written contract, which usually identifies:

• The parties;

• The property being purchased;

• The amount being paid;

• The deposit that will be paid (usually 10%);

• Whether or not the deposit is to be held in escrow or paid directly to the vendor at the time of the completion of the sale (usually 90 days); and

• The consequences of default by either party. It is also a legal requirement that the agreement is made in writing and signed by all parties involved. The purchaser’s attorney-at-law conducts the title searches of the property and certifies that the vendor possesses good title.

It should also be noted that there is no title insurance. It is the responsibility of the purchaser to arrange for completion of the purchase of a property at his or her own cost. Some of the documents that are generally required for the completion of the purchase include:

• Receipts for the payment of property taxes – the collection of property tax is currently in abeyance;

• Water and Sewerage Authority rates receipt;

• Water and Sewerage Authority Clearance Certificate; and

• A release of any existing mortgage. These documents are to be supplied by the vendor. The purchaser’s attorney-at-law also prepares the appropriate deed of conveyance and/or memorandum of transfer and arranges for completion of the transaction. If the purchaser is financing the purchase of the property by means of a mortgage, the mortgage is usually executed by the purchaser contemporaneously with the deed of conveyance or memorandum of transfer.

Foreign Investors

The Foreign Investment Act Chapter 70:07 allows foreign investors – meaning non-citizens or non-residents of T&T and certain CARICOM countries – to purchase no more than one acre of land for residential purposes and five acres for commercial purposes on Trinidad without a licence from the Ministry of Finance and the Economy as prescribed by the act.

The purchase price for the purchase of property in T&T by a foreign investor must be paid in an internationally traded currency, which must deposited in a local financial institution and disbursed by them, and notice thereof with proof of payment must be provided to the Ministry of Finance and the Economy. Additionally, in 2007 the government proclaimed that foreign investors must obtain a licence permitting them to purchase any property on Tobago.

Stamp Duty

The deed of conveyance or memorandum transfer is subject to a Stamp Duty Tax, payable by the purchaser – the rate of which depends on the type and nature of property being purchased.

It is also a requirement that the purchaser obtains a valuation report for the property prepared by a reputable valuator at a date of no more than six months from the date of the completion of the purchase so that the Board of Inland Revenue can apply the requisite stamp duty on the deed of conveyance or memorandum of transfer on the purchase of the property. The applicable rates of stamp duty payable are set out in the table on this page.

Legal Fees

The legal fees for handling the purchase of a property is a scale fee that is set out at the Attorneys-at-Law (Remuneration for Non-Contentious Business) Rules 1997 made pursuant to the Legal Profession Act Chapter 90:03 and equal to approximately 0.5% of the total value of the property that is being purchased.

Statutory Approvals

The Town and Country Planning Act Chapter 35:01 makes it mandatory to obtain approval to develop land, whether for residential, commercial, industrial or agricultural purposes. Under the act, development is defined as:

• Carrying out of building, engineering, mining or other operations in, on, over or under any land;

• Making any material change in the use of any buildings or other land; or

• Subdividing any land, save and except for certain operations or uses of land as defined therein. Where town and country approval is required for a property that is in the process of being sold, the purchaser may wish to make the agreement for sale of the property conditional upon the production of the relevant permission by the vendor in question.

Mortgage Regulations

In T&T real estate can be used as security for a mortgage. The nature of a mortgage is that it is a conveyance of an interest in the property with a proviso for redemption by the borrower upon repayment of the loan. The rights of both the borrower and the lender are governed by the Conveyancing and Law of Property Act Chapter 56:01 and common law.

Compulsory Acquisition

The Land Acquisition Act Chapter 58:01 allows the state to acquire land when it appears to the president that any land is likely to be required for any purposes which, in the opinion of the president, are public purposes.

The government can also acquire property by way of private treaty negotiation. The compulsory process involves notifying affected persons and allowing them to present claims for compensation, and negotiations on the amount of compensation to be paid.

Rules Regarding State Lands

From time to time, state lands may be made available to private individuals for investment purposes.

The interested purchaser is required to submit an application to the state together with supporting documentation, such as a development plan showing the proposed use of the lands.

The relevant lands are usually vested by way of a state lease for a term of between 30 and 99 years at a rent, premium or both.

Property Taxes

Property taxes for the period 2010-14 were waived by the government. However, in 2014 the government indicated in its budget presentation that it would be reintroducing these taxes in phases between 2015 and 2017.

A revaluation of properties was planned whereby in phase one all industrial buildings were to be revalued, including plants and machinery, with the aim of implementing the new tax rate.

In phase two, the tax is supposed to be implemented in relation to commercial property, and in phase three it is planned to be imposed on agricultural and residential property. However, the first phase had yet to be implemented as of early 2015.

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Legal Framework chapter from The Report: Trinidad & Tobago 2015

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