Trinidad and Tobago Foreign Investment Act
The Foreign Investment Act, Chap. 70:07 (“the FIA”) came into force on August 17, 1990 and repealed the Aliens (Landholding) Act, Chap. 58:02 (“the Aliens Act”), which until its repeal regulated among other things, the holding of land, shares, debentures and directorships by persons who were “aliens” for the purposes of the Aliens Act. The Aliens Act placed considerable fetters on the ability of non-nationals to invest in Trinidad and Tobago, but in 1990 Parliament repealed and replaced it with the FIA which considerably mitigated the restrictions previously imposed on foreign investors by the Aliens Act.
Although considerably less restrictive than the Aliens Act, the FIA nevertheless does provide some regulation with respect to the acquisition by foreign investors of interests in land, shares in Trinidad and Tobago companies and the incorporation of Trinidad and Tobago companies by foreign investors. The term “foreign investor” is defined as meaning:
(a) an individual who is neither a national of Trinidad and Tobago nor of another member state under the Revised Treaty of Chaguaramas (“Member State”) establishing the Caribbean Common Market (“CARICOM”), including the CARICOM Single Market and Economy;
(b) a firm, partnership or an unincorporated body of persons of which at least one-half of its membership is held by persons who are not nationals of Trinidad and Tobago or another Member State;
(c) any company or corporation that is not incorporated in Trinidad and Tobago or another Member State or, if so incorporated, is controlled by persons referred to in paragraphs (a) or (b) above or is deemed to be under the control of foreign investors (a company is deemed to be so controlled if:
(i) at least one-half of the votes exercisable at a meeting of the company are vested in foreign investors; or
(ii) in the case of a company having a share capital, at least one-half of the nominal amount of its issued shares that carry voting rights are vested in foreign investors; or
(iii) if it does not have a share capital, at least one-half of the number of its members are foreign investors; or
(iv) it is in fact controlled by foreign investors).
A foreign investor wishing to purchase shares in a private company incorporated in Trinidad Tobago (i.e., a company that does not distribute its shares to the public) is required to provide prescribed particulars in respect of the investment to the Minister of Finance (“the Minister”). The consideration for the shares must be paid in an internationally traded currency through a person authorised by law to deal in such currency (for instance, a commercial bank in Trinidad and Tobago). The currency and authorised dealer requirements also apply in relation to the acquisition of land.
A foreign investor may also purchase shares in a Trinidad and Tobago public company (i.e. a company which distributes its shares to the public) and must fulfill the same reporting requirements as for the purchase of shares in a private company. However, in certain cases a foreign investor may be required to obtain a licence from the Minister before he can legally acquire such shares.
A foreign investor may own land for residential and business purposes up to certain set acreage limits but thereafter, must acquire a licence from the Minister for any further acreage in excess of the limit prior to acquiring such acreage. Certain land in Trinidad and Tobago which has been designated by an Order of the Minister, regardless of its size, may not be owned by a foreign investor without such foreign investor obtaining a licence. The FIA does however, provide for certain specific exceptions where a foreign investor may obtain a limited interest in land, regardless of the acreage limit, without first obtaining a licence.
Further, where any land vests in a foreign investor who is authorised to acquire land without a licence under the FIA, the foreign investor and his attorney-at-law acting for him in the matter, must forthwith, ensure that a notice of such vesting, in duplicate, together with prescribed particulars and supporting documents, are given to the Minister.
The holding of land in Trinidad and Tobago or shares in any local company in trust (the term “trust” is very widely defined under the FIA) for a foreign investor who requires a licence but has obtained such land or shares without first obtaining a licence is prohibited. The FIA contains various penalties for breaches of its restrictions and any land or shares acquired by a foreign investor without a duly required licence are subject to forfeiture by the State.
There are no restrictions on repatriation of capital, profits, dividends, interest, distributions or gains on investment.
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