THE REGISTRATION OF EXTERNAL COMPANIES AND THE INCORPORATION OF NON-PUBLIC COMPANIES IN TRINIDAD AND TOBAGO
Although it is not absolutely necessary for a foreign investor to set up a formal place of business in Trinidad and Tobago in order to do business here, many often do so. In such cases the most common choice is to either register a local branch of an already existing foreign company or incorporate a non-public local company (that is, a company with shares that are not offered to the public and which are usually subject to restrictions on their transfer). Both of these procedures are provided for and should be carried out in accordance with the Companies Act, Chap. 81:01 (“the Act”).
As far as “for profit” companies are concerned, the Act provides for the incorporation of either limited or unlimited liability companies. Where a local branch of an already existing foreign company is to be set up it must be registered as an external company under the Act. The Act also provides for the incorporation of non-profit companies and companies limited by guarantee but these are not discussed in this note as they are not usually suitable for commercial enterprises. Similarly, the incorporation of public companies is also possible but this process is not discussed here as public companies are not usually utilized by foreign investors. Further, unlike certain other Caribbean territories the Act does not provide for the incorporation of “IBC”, “SRL” or “ISRL” type entities.
Any company incorporated or organized under the laws of a foreign country that has established a place of business in Trinidad and Tobago is required under the Act, within fourteen (14) days of establishing such place of business, to file with the Registrar of Companies (“Registrar”) in duplicate (i) an application for registration; (ii) copies of the corporate instruments of the company (duly certified and if necessary translated); (iii) an affidavit or solemn declaration of an officer of the company verifying the particulars set out in the application; (iv) a power of attorney in favour of a local company or two individuals authorised to accept service of documents and legal process on behalf of the company; and (v) a statutory declaration by a Trinidad and Tobago attorney-at-law. Once the application and supporting documents lodged are compliant with the Act the application will be processed and the Registrar will issue a Certificate of Registration. Once the Certificate of Registration is issued the company may carry on business in and exercise its corporate powers within Trinidad and Tobago through the branch office so registered. Post registration the Registrar must be notified of any changes in the directors or in the corporate instruments of the registered external company. Annual returns containing certain prescribed information must also be filed with the Registrar.
As an alternative to doing business through and registering a local branch, a foreign investor may incorporate a Trinidad and Tobago company under the Act. Companies incorporated under the Act can do all things that an individual can do (except if restricted by the Act or its corporate instruments). A single person or company may incorporate a company and there are no prohibitions against “thin capitalisation” under the Act. Shares are of “no par” value (par value shares are not permitted) and may, unless restricted in the articles of incorporation, be issued in varying classes in unlimited amounts. The liability of members of a company may be limited or unlimited. Incorporators will in most cases use a limited liability status but foreign investors do on occasion utilize the unlimited liability status for the purposes of obtaining tax benefits in other jurisdictions. The rules for the day to day management of the affairs of the company will be set out in the Company’s by-laws which is an internal corporate document not subject to registration.
The procedure for the incorporation of a local company requires the prior approval of the intended company’s name by the Registrar. This is achieved through the lodging of a name approval application. Where the name or names applied for are, in the Registrar’s view, too similar to one or more existing names already on the register he is entitled to refuse approval. Upon obtaining such approval the incorporator must lodge with the Registrar in duplicate (i) articles of incorporation; (ii) a notice of the names of the first directors; (iii) and a notice of the address of the registered office of the company. Although not necessary to complete the incorporation, the incorporator may also lodge with the Registrar in duplicate a notice of the name of the first company secretary. Assuming the application documents are in order the Registrar will issue a Certificate of Incorporation. After incorporation the local company must appoint a company secretary if not done at the time of incorporation, and notify the Registrar of any changes in its directors, address of registered office and secretary. Annual returns containing certain prescribed information must also be filed with the Registrar.
Where the incorporation of the company is being facilitated through a third party service provider (such as a law firm) it will constituted a “listed business” for the purposes of the Proceeds of Crime Act, Chap. 11:27 and as such the service provider incorporating the company in Trinidad and Tobago will be required to obtain prescribed know your customer due diligence information as prescribed under the aforementioned Proceeds of Crime Act and its subsidiary legislation (prior to the completion of the incorporation. The Proceeds of Crime Act and its subsidiary legislation constitute the domestic implementation of the international Financial Action Task Force Recommendations against money laundering and terrorism.
Finally, it is very important to note that a foreign person or entity seeking to incorporate or acquire shares in a local company must also comply with the requirements set out under the Foreign Investment Act, Chap. 70:07. A summary of the requirements imposed by the Foreign Investment Act can be accessed at the Legal Insight entitled "Trinidad and Tobago Foreign Investment Act".
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