Trinidad and Tobago - Foreign investment

Foreign investment in Trinidad and Tobago, particularly from British, Canadian, US, and Dutch sources, has played a major role in the development of all major manufacturing and processing industries, as well as most large agricultural enterprises. Several private banking institutions have provided development loans through the Industrial Development Corporation, established by the government in 1959 to act as a liaison between investors and various government departments.

Starting in 1970, the government required foreign investment in Trinidad and Tobago to be conducted in a joint venture basis, with majority domestic participation most often in a 60:40 ratio. In the 1980s the economy became mired in stagflation. The government launched a campaign of reforms emphasizing fiscal and monetary discipline, export-led growth, and encouragement of private sector and foreign investment. Under the current investment regime there are for the most part no restrictions or disincentives to investment. A bilateral investment treaty (BIT) was concluded with the United States in 1996. The Free Zones (FTZs) Act of 1988, as amended in 1997, established the framework of duty-free, tax-free, and bureaucracy-free investment environments. In 2002, there were three multiple-user and eleven single-user FTZs in operation or under construction. In May 2001, the government passed new telecommunications legislation establishing a new telecommunications authority, opening the way for liberalization of the sector. As of 2003, however, the telecommunications sector remained the only one closed to new foreign investment in key areas.

Oil and gas exploration continues to attract inflows of foreign capital, boosting economic growth and strengthening public finances. The United States is the major investor, followed by the United Kingdom, Canada, Germany, India, and Norway. Inflows of almost $4 billion in foreign investment between 1997 and 2000 strengthened the balance of payments and permitted the relaxation of policies. US investments have been mainly in hydrocarbons and petrochemicals; while Canada has investments in ammonia/urea, Germany in methanol and iron, India in iron and steel, and Norway in ammonia. A boom in natural gas investment, including pipelines for the delivery of liquefied natural gas (LNG), was under way in 2002 and 2003.