Haitian Legal Landscape for Foreign Investments
By Attorney Ludwig LEBLANC
Posted: 20th July 2017 08:52
I- Key Sectors
Haiti offers a lot of investment opportunities across many sectors. Through its unique geographical location, legal framework, bilateral and international agreements, Haiti is considered to be a bridge between North America, South and Central America, the Caribbean and Europe.
Despite certain deficiencies in infrastructure and energy, Haiti excels in many areas such as agriculture and telecommunications, while its key sectors also include tourism and manufacturing.
Over the years political uncertainty has deterred investors, but since 2005, Haiti is considered to be a Land of Investment under the motto ‘Haiti is open for business’.
Since Jovenel Moise was elected president in February 2017, , the new government has launched important new reforms to reduce public spending and promote foreign investments in the agriculture sector. Furthermore, the Center of Investment facilitation (CFI) has established a unique foreign investment initiative.
II- Legal Overview
Haiti has a civil law system and is divided into three branches of power: executive, legislative and judicial.
The executive branch is headed by the President and the Prime Minister, who is head of the government.
Legislative power is exercised by a bicameral Congress that is divided into two chambers – the Senate and the Chamber of Deputies.
The judicial branch is led by the Supreme Court of Justice, acting as the highest-level court overlooking the Courts of Appeal, the Courts of First Instance, and the Justices of the Peace.
III- Legal Framework
Formal sources of law include enacted laws (the Constitution, statutes, decrees, regulations and ordinances), jurisprudence, doctrine, customs and uses, general principles of law and international treaties.
IV- Resolution methods
With respect to large commercial disputes, the court system is impartial and operates under the principles of equality and justice. Hence, any commercial dispute must be fairly conducted as set forth in the Constitution and laws in force. The process can be very lengthy.
Besides the Judicial way to resolve conflicts, there is also an alternative method of dispute resolution: national or international arbitration.
Arbitration provides a quick and inexpensive process. A foreign court judgment or a foreign arbitral award may be executed but has to be validated by an Haitian Court. When all requirements have been fulfilled, foreign decisions may enacted.
V- International Agreements
Haiti has developed a policy of promoting trade integration:
- With the United States of America through the Agreement called HOPE
- With the Caribbean through CARICOM and ACP agreements
- With Europe through a trade agreement
The Investment Code creates incentives or tax relief for foreign investors or businesses. Some of the most important are the following:
- Free zones:the free zone system has always been attractive to foreign investors because of the tax incentives it offers, including 100% exemption from income tax, valued added tax and import duties, among others.
- Tourism:this is one of the most attractive industries for investment.
Our corporate law provides that companies shall keep accounting records in accordance with national and international accounting norms, as well as in accordance with local legislation. Furthermore, financial statements of any entity have to be duly audited by an authorised external auditor.
In addition to the foregoing, all companies must comply with the following reporting requirements before the Tax Office, including:
- resolutions from the company’s shareholder or board meetings;
- increases in the company’s authorised share capital;
- changes to the company’s articles of association or by-laws;
- changes to the company’s shareholders;
- the dissolution of the company;
- changes to the company’s domicile or registered address; and
- changes to the company’s contact details.
Haitian Law recognises two [U1] corporate structures and business forms, and acknowledges foreign companies.
Sole Owned corporation
The sole owned corporation is an entity formed by one shareholder whose losses, with respect to the company’s activities, is not limited to their capital contributions.
Limited liability companies
A limited liability company (S.A) is the entity formed by a minimum of three partners, none of whom may have personal responsibility for company’s debts. This form of commercial organisation is used for medium-sized businesses and closed capital entities. A board of directors composed of a minimum of three members is normally in charge of managing these companies.
A corporation duly incorporated anywhere in the world is recognised in Haiti upon confirmation of its legal existence by the appropriate authorities, according to the formalities prescribed by the law of the place of incorporation.
VIII- Employment sector
To enter into an employment contract in Haiti is necessary to determine the modality of the employment. Employment can be for an indefinite term, for a fixed period of time, or for a particular job or service.
The employment contract for an indefinite term or for a particular job or service can be made orally or in writing. However, the employment contract for a fixed period of time can only be made in writing.
In view of the foregoing, it is important to mention that whenever there is an employment contract in writing it is mandatory by law that such contract be registered with the Ministry of Labor.
The employment contract terminates without liability by mutual agreement, by execution of the agreement, or because execution is impossible.