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FOREIGN INVESTORS LICENCE

“BUYER BEWARE: A BRIEF GUIDE TO OBTAINING A FOREIGN INVESTOR’S LICENCE”

Rodrick Edinboro
M. Hamel-Smith & Co.

The provisions of the Foreign Investment Act, Chap 70:07 are to facilitate
investment by both Carom nationals and foreign investors through the acquisition of land and shares and the
formation of companies.
A foreign investor seeking to acquire land or shares in Trinidad and Tobago may need to obtain a licence
prior to the investing of the land or shares in the foreign investor. This article will answer some of
your questions relating to acquiring land or shares under the Act.
Who is a foreign investor?
A foreign investor is:
(a) an individual who is not a national of Trinidad and Tobago or another Member State (Member State refers
to the countries of CARICOM);
(b) any firm, partnership or unincorporated body of persons of which at least
one-half of its membership isheld by persons who are not nationals of Trinidad and Tobago or another
Member State; or
(c) any company or corporation that is not incorporated in
Trinidad and Tobago or another Member State or if so incorporated is under the control of persons to whom
paragraph (a) or (b) apply, or is deemed to be underthe control of a foreign investor.

A company or corporation is deemed to be under the control of a foreign
investor if: at least one-half of the votes exercisable at any meeting of the company or corporation
are vested in foreign investors; or having a share capital, at least one-half of the nominal amount
of its issued shares that arevoting shares are vested in foreign investors; or not having a share capital,
at least one-half in number of its members are foreign investors; or it is in fact controlled by foreign investors.

Acquiring Land
When is a licence required?
A licence is required by a foreign investor where:

For commercial purposes, the land to be acquired is more than 5 acres;
For residential purposes, the land to be acquired is more than 1 acre;
The land to be acquired is located in Tobago (regardless of size or purpose).
By the Foreign Investment Tobago Land Acquisition Order 20097 (Legal Notice 63/2007),
Tobago was deemed an area for which a foreign investor should first obtain a licence
under the Act before acquiring any lands. Notwithstanding the above,the Minister of Finance
may by Order prescribe certain areas in Trinidad and Tobago (regardless of size or purpose)
in which a foreign investor may not acquire land without first obtaining a licence.

When is a licence not required?
A foreign investor does not require a licence in the following circumstances:

On an annual tenancy or for any less interest for the purpose of his residence, trade
or business where, in total, the land does not exceed 5 acres; As a legal personal
representative or beneficiary under a will or intestacy, for a periodof 1 year from the
date of death of the deceased or for such extended time as the President may grant;
In pursuance of his rights to foreclose or enter into possession as a mortgagee for a
period of 1 year from the acquisition of the land or for such extended time as the
President may grant; As a judgement creditor for a period of 1 year from the date of
acquisition of the land or for such extended time as the President may grant;
Jointly with his spouse, where that spouse is a citizen of a Member State who is
resident in Trinidad and Tobago within the meaning of Section 5 of the Immigration Act.

Can the foreign investor acquire multiple properties once
the threshold acreage is not exceeded?

For residential purposes, the foreign investor is restricted to one (1) parcel of land.
For commercial purposes, there are no restrictions providing the aggregate area does not
exceed 5 acres. However, a separate application must be submitted for each parcel of land.

What are the required documents?
For individuals, original passport or certified copy of bio-data page and page with T&T
immigration entry stamp.
For companies, a copy of the Certificate of Incorporation, Police Certificates of Good
Character from authorities in the countries of residence of the individual or Directors as
the case may be. Town and Country Outline Planning Approval for the erection of a building on
the land in respect of which a licence is sought.
Credit references and evidence of adequate capital (from an acceptable source, such as a reputable
accounting firm or registered financial institution) to maintain the applicant pursuing acquisition
for business or residential purposes.
Where land is being acquired under a will or intestacy, a certified copy of the Will and Grant of
Probate or Letters of Administration, as the case may be.
For commercial purposes, a Business Plan must be submitted outlining:
The proposed business activity to be undertaken;
Level of capital investment;
Credit references and evidence of adequate financing from an acceptable foreign source such as a
reputable accounting firm or financial institution;
Significant impact on local employment; and proposals for training;
Foreign exchange earnings/savings; and
Linkages with the rest of the economy.

Acquiring Shares

When is a foreign investor’s licence required?
A licence is required where a foreign investor is desirous of acquiring shares in a public company
where the holding of such shares by the foreign investor (directly or indirectly) results in 30%
or more of the total cumulative shareholding of the company being held by foreign investors.
When is a foreign investor’s licence not required?
A licence is not required where a foreign investor is desirous of acquiring shares in a private
company, or in the case of a public company where the shareholding percentage is not exceeded in
public companies as outlined in the previous paragraph. Although, a licence is not required in the
above circumstances, the foreign investor must give notice to the Finance Minister (and the
Secretary of a public company) before acquiring shares in a private or public company.
Foreign Investor’s Notice. The following information must be given by a foreign investor prior to

acquiring shares in a private or public company:
For individuals, their name, address, nationality and former nationality.
For companies, its name, place of incorporation, principal place of business and corporate documents;
and the names, nationality, former nationality and addresses of its directors and the name of any
controlling shareholder.
The identity of any other country in which the foreign investor holds investments.
The purpose of he investment.
Whether the foreign investor is or is nota resident of Trinidad and Tobago within the meaning of
the Exchange Control Act, Chap. 79:50.
Full particulars of the consideration for the investment and of the payments and credits made,
and the name of the local bank (must be an authorised dealer, i.e. an entity that is authorised
to deal in foreign exchange under the Exchange Control Act) through which each such payment or
credit was made or given.

How long does the application take?
These applications are complex in nature and, where ALL of the required information is provided,
it may take up to 20 working days to process.
How is the land or shares to be paid for?
The consideration for the land or shares is to be paid into a local bank in an internationally
traded currency, except in the case of a company incorporated in Trinidad and Tobago where such
consideration is financed out of capital reserves or retained earnings.

Is the licence transferrable?
The licence is not a form of property and is not transferable to another foreign investor.
Therefore, a foreign investor seeking to acquire land or shares which were previously owned
by another foreign investor who was granted a licence to acquire that land or shares, must
also obtain a licence prior to the acquisitionof that land or shares.

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