In 2008 the government established the Trinidad and Tobago International Financial Centre (TTIFC) as a specialist agency to promote the development of the country as an international financial centre. Previously, this work had been undertaken by InvesTT, which promotes inward foreign direct investment across the economy.
The strategies being pursued by the TTIFC include Financial Institutions Support Services (FINeSS), which seeks to provide special incentives for foreign financial institutions that wish to establish service centres for their core middle- or back-office processes. FINeSS will also work with specialist business process outsourcing (BPO) providers.
Varun Maharaj, CEO of the TTIFC, identified a number of general advantages that the country has, in discussions with OBG. These include a growing workforce of more than 620,000 people. Free education to undergraduate level, combined with international-standard universities, has provided a strong environment for producing skilled, white-collar workers who can compete in the global arena. According to the TTIFC, around 6000 students are enrolled annually in professional accounting programmes. The telecommunications infrastructure is also sufficiently advanced to be efficient. The World Economic Forum ranks the country 60th out of 142 in terms of networked readiness. A number of legislative changes – such as the new Insurance Bill – should help improve the regulatory environment.
The country is already recognised by a number of international banks as a regional hub. Scotiabank’s local subsidiary is one of the largest banks in T&T, and its ScotiaLife Insurance operation is a leading life insurer. Royal Bank of Canada (RBC) Financial Caribbean’s regional headquarter is in Port of Spain, where Citibank is also present.
The TTIFC identifies a number of specific incentives for financial services organisations (or BPO providers) to set up operations in T&T. Labour costs are $14,000-18,000 per annum, versus the $42,000-56,000 that is the norm in the US or Canada. Having a service centre in a free zone means that a company enjoys an indefinite exemption from corporation tax, capital gains tax, land and building tax, value-added and withholding taxes, and other official fees.
The TTIFC is undertaking initiatives to boost the skills of Trinbagonians working in the financial sector. In mid-2014, for instance, it signed a memorandum of understanding (MoU) with the University of T&T (UTT) and the New York Institute of Finance for the provision of specialised finance training courses at UTT’s Chaguanas campus.
The TTIFC can point to significant successes. Both RBC and Scotiabank have opened services centres in T&T. Pan-American Life Insurance Group, a regional insurer that entered the country via its acquisition of American Life and General Insurance Company from MetLife, signed an MoU with the TTIFC and the T&T Free Zones Company in late 2012.
Gillian Golah, vice-president for business development at the TTIFC, told OBG that the norm will be for the multinationals’ shared services centres to employ 500-1000 people. “We have been in competition with Halifax, Nova Scotia, but that market is quite mature,” she said.
Golah added, “Demand for office space for the new services centres will probably be met from outside Port of Spain.” Possible locations, with good access and a ready supply of potential offices, include Chaguanas and Trincity, near Piarco International Airport.
FINESS has features in common with the strategy pursued successfully by the government of Ireland to attract fund administrators and other financial services companies to that country in the 1980s and 1990s. One such TTIFC strategy that shows commonalities with the development of the Dubai International Financial Centre is the long-term plan to create a special zone, with its own business development agency, regulator and judiciary. The relevant legislation is expected to be passed in 2015, but there will be a distinction between offshore business, which will be conducted through the new zone, and onshore business, which will not be.
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