Legislation for Foreign Investment Statutes in Countries in the Americas
Comparative Study
1. Legal bases for foreign investment
Objective: Indicate if there is a Foreign Investment Statute and describe it. In the paragraphs below, indicate the legal rank of the norms contained in the Statute, i.e., regulations for expropriation fall under which rank?
1.1 Constitutional
Fiscal incentives act No. 6 of 1990.
1.2 Legal
Export Processing Zone Act No. 8 of 1990.
1.3 Administrative
Export Processing Zone Act No. 56 of 1992.
Export Processing Zone Amendment Act of 1992.
Commercial Free Zone Act No. 27 of 1994.
Commercial Free Zone Regulations No. 75 of 1995.
2. Concept and subject of foreign investment
Objective: It is essential that both the investor and the nature of the investment be identified, so as to determine to which activity and to whom the regulations will be applied. This is also essential at the international level, especially in case of dispute and arbitration.
2.1 Is foreign investment in your country legally defined or conceptualized?
Yes
2.2 Are there registered records or mechanisms to clearly identify both the foreign investor and the nature of the investment?
Yes
1. Memorandum and Articles of Association
2. Business Plan
2.3 Is it possible for a natural person to resort to the foreign investment legislation?
Yes
2.4 Is it possible for a citizen or resident to resort to the foreign investment regime?
Yes
2.5 Can a recipient company funded with both domestic and foreign capital resort to foreign investment regulations? Is this subject to restrictions?
Joint ventures are encouraged
2.6 Is there a time limit for a foreign investor to be considered as such?
None
2.7 Are restrictions imposed on the executive body or other staff of an enterprise. Are there nationality quotas? Under what conditions can the executives or other staff hired abroad send their earnings to their country of residence?
None
Yes - based on the size of the enterprise
None
3. Scope of foreign investment activities
Objective: Define the legal scope of foreign investment in your country, as well as their conditions and limitations.
3.1 Describe the regulating principles of economic activity in your country.
Must be a limited liability company
Must bring own capital
Must not be deleterious to the environment
a) Describe how economic freedom is guaranteed.
Operated free of tariff taxes, licenses and quotas
Free use of foreign exchange
Easy repatriation of profits
All the above is sanctioned by law
b) Is the principle of economic nondiscrimination guaranteed? Describe how.
Yes - An appeals system is in place.
c) Public and private enterprises (local and foreign): do they compete on equal terms, or does the State have higher benefits?
Compete on equal terms
3.2 Indicate the scope of foreign investment, i.e., does it include movable and immovable property, assets, concessions, claims to money, intellectual property, industrial property, leasing, technology, etc.
Includes the total package
3.3 Reserved sectors
Military equipment
Illegal drugs
Firearms
Toxic industries
* All are prohibited
a) Indicate the sectors or economic activities reserved exclusively for the state in your country. Explain the regulations pertinent to these areas.
Yes
b) Indicate the sectors or economic activities in which only foreign investment is excluded, restricted or limited in your country. Explain in what consists said exclusion, restriction or limitation.
c) Does the Principle of International Reciprocity exist in the legislation of your country?
Yes
d) Is foreign investment subject to performance requirements?
e) Can foreign investors take part in the privatization processes of your country?
4. Rights and protection of foreign investment
Objective: Identify the type of treatment granted foreign investment i.e.: its rights, protection and incentives.
4.1 Treatment granted to the foreign investor and the investment
a) National treatment or Most-Favored-Nation clause ? (Refer to paragraphs 3.1 and 3.3).
Yes
4.2 Protection of Property
a) Constitutional or legal grounds that may lead to expropriation of, or limitations to property.
Assets can be sold to recover debt to Government or to credits following a court order.
b) How is compensation determined? Which value is it based on? How is it settled?
Compensation is determined by market value. It is settled by mutual consent or by a court of law.
c) Can the authorities take possession of expropriated assets prior to paying compensation?
No
d) Is property of both corporal and incorporeal assets equally guaranteed?
Yes
4.3 Transfers of investment, remittances of capital and benefits
a) Under what conditions may investments in the form of foreign exchange, capital goods, technology, associated credits, etc., be brought into the country? Are there specific regulations for each item?
Free and uninhibited
Customs processing at the zones
Agricultural imports are subject to quantitative restrictions
b) Are there restrictions to the remittances of capital, benefits, debt service, or other remittances derived from foreign investment?
None
c) Are there different kinds of exchange rates? To which does the foreign investor have access?
US$.50 - BZ $1.00
US exchange rate
4.4 Taxes and incentives to foreign investment
a) Explain briefly the taxes that foreign investments are subject to.
Social Security employer contributions
All taxes except tax on profits for a specified period
b) Are there special tax rules for foreign investment?
Yes
Free Zone Companies are totally tax-exempt
c) Has your country signed agreements with other countries in the Americas to avoid double taxation? If yes, list those countries.
None
d) Are there other incentives to foreign investment, such as access to domestic credit, investment insurance, industrial parks, customs exemptions, etc.?
Industrial Parks with support services and on-site customs
Tax exemption on profits for 20 years
Free use of foreign exchange
30 day application review period
Preferential access to work permits
Duty exemption on service vehicle
Duty free fuel for electrical generation
Negotiable energy rates
Ability to sub-contract
5. Dispute settlement
Objective: Because Bilateral Investment Treaties (BITs) will be part of another study, only an overview of the subject is required here.
5.1 Domestic settlements: Can the foreign investor resort to the same procedures as the national investor? Are there special forms of appeal available to foreign investors? Please describe.
Yes, all investors have recourse to an Appeals Board apart from this judicial system.
Appeal is the same for national and foreign investors
5.2 International settlements: Is your country a member of ICSID or other international arbitration mechanisms on the subject of investment?
Yes
5.3 Has your country signed BITs with other countries in the Americas? What is the present status of said agreements, i.e., approved, ratified, in effect?
Canada
CARICOM
Colombia
USA
Venezuela
All ratified
5.4 Where in the juridical hierarchy of your country are international treaties and specifically the Investment Protection Agreements? Analyze your response in relation to the Constitution and domestic laws.
5.5 Do said agreements have "direct effect", that is to say, can they be invoked by the parties directly before the Courts and then applied to the case in question? If not, under what circumstances can they be invoked and applied?
6. National authorities
Objective: To identify the agencies in charge of foreign investment, their organization and functions.
6.1 Is foreign investment handled by specially appointed offices in your country? What is their hierarchical status? How are their actions integrated? What are their main attributions?
1. The Export Processing Zone (EPZ) Office and
2. The Commercial Free Zone Management Agency (CFZMA) Office
3. Ministry of Economic Development
* Actions are integrated through the representation of key ministries in the decision-making process.