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In concept, the CFI could streamline the investment process by working with other government agencies to simplify procedures related to trade and investment; providing updated economic and commercial information to local and foreign investors; making proposals on investor incentives; and promoting investment in priority sectors.

The CFI aims to offer tailored services to large international investors. In practice, the CFI has made limited progress to incentivize job creation and boost national production in agriculture, apparel assembly, and tourism. The apparel sector, the largest provider of jobs in the formal private sector, has reported great difficulties operating due to insecurity and recurring fuel shortages with adverse effect on contracts and employment.

Limits on Foreign Control and Right to Private Ownership and Establishment The Haitian government does not impose discriminatory requirements on foreign investors. Haitian laws related to residency status and employment are reciprocal. Foreigners who are legal residents in Haiti and wish to engage in trade have, within the framework of laws and regulations, the same rights granted to Haitian citizens.

Foreign firms are also encouraged to participate in government-financed development projects. Performance requirements are not imposed on foreign firms as a condition for establishing or expanding an investment, unless indicated in a signed contract. Foreign investors are permitted to own percent of a company or subsidiary. As a Haitian entity, such companies enjoy all rights and privileges provided under the law. Additionally, foreign investors are permitted to operate businesses without equity-to-debt ratio requirements.

Accounting law allows foreigners to capitalize using tangible and intangible assets in lieu of cash investments. Both Haitian and foreign investors enjoy the same rights and privileges. However, foreign investors residing in Haiti must obtain a residence permit and are expected to pay duties and taxes, in accordance with the scales and regulations applicable. Foreign investors are free to own real estate for the needs of their businesses and enjoy the same rights and prerogatives as Haitian investors.

The reimbursement of debts contracted abroad for investments made in Haiti are not subject to any constraint or taxation. Foreign investors are free to enter into joint ventures with Haitian citizens. The distribution of shares is a private matter between the two parties.

However, the government regulates the sale and purchase of company shares. Investment in certain sectors, such as health and agriculture, requires special Haitian government authorization. Mining, prospecting, and operating permits may only be granted to companies established and resident in Haiti, and the establishment of new industrial mines cannot take place until an elected parliament passes an updated mining law, along the lines of a draft law initially presented in Entrepreneurs are free to dispose of their properties and assets and to organize production and marketing activities in accordance with local laws.

Investors in Haiti can create the following types of businesses: sole proprietorship, limited or general partnership, joint-stock company, public company corporation , subsidiary of a foreign company, and co-operative society. The most common business structures in Haiti are corporations. At present, it takes between 90 and days to complete registration with the Commercial Registry at the Ministry of Commerce and obtain the authorization of operations Droit de fonctionnement.

The CFI also offers a service providing pre-registered and fully authorized companies in manufacturing, agribusiness, and real estate the opportunity to reduce their registration time. Once the Inter-Ministerial Investment Commission validates these established companies, the shares are transferred to the new owners. The registry will eventually provide online registration of companies through an electronic one-stop shop.

In October , CFI launched Spotlight, an initiative with the aim of promoting visibility of companies already established in Haiti and registered in the CFI database. Outward Investment Neither the law nor the Haitian government restricts domestic investors from investing abroad. These investors are generally businesspersons with dual citizenship and others of Haitian origin who presently reside in the country in which their firms operate.

The majority of these firms are service providers and not investment firms. There is no current program or incentive in place to encourage Haitian entrepreneurs to invest abroad. There is no double taxation agreement between Haiti and other countries. Haiti is a beneficiary country of the U. In , the U. The CBTPA provides duty-free treatment to apparel wholly assembled, knit or knit-to-shape in certain beneficiary countries in the Caribbean, as long as the apparel uses U.

Title XV, Subtitle D, Part I of the Act contains amendments to the established special rules for imports of apparel and other textile articles from Haiti, which can be found in 19 U. HOPE II enables the Haitian textile industry to benefit from tariff advantages with the condition that the Haitian government and eligible producers comply with internationally recognized labor standards.

HOPE II allows for duty-free entry into the United States of a limited number of garments imported from Haiti, provided that 50 percent of the value when imported originates in Haiti, the United States, or another country that has a free trade agreement with the United States. The bill would ensure that the benefits of both programs are maintained until Legal Regime Transparency of the Regulatory System Haitian laws are written to allow for transparency and to be applied universally.

Tax, labor, health, and safety laws and policies are also loosely enforced. The private sector often provides services, such as healthcare, to employees that are not entitled to coverage under Haitian government agencies or institutions. All regulatory processes are managed exclusively by the government and do not involve the private sector and non-governmental organizations.

According to the World Bank, Haitian ministries and regulatory agencies do not develop forward regulatory plans, nor do they publish proposed regulations prior to their adoption. Haitian law does not require a timeframe for public comment or review of proposed regulations. CSME became operational in January in 12 of the 15 member states. Haiti is an original member of the WTO. As such, it has made several commitments to the WTO with regard to the financial services sector.

These commitments include allowing foreign investment in financial services, such as retail, commercial, investment banking, and consulting. One foreign bank, Citibank, operates in Haiti. However, Haiti is not party to the Trade Facilitation Agreement. Judicial power is exercised by the Superior Magistrate Council, the courts of appeal, the courts of first instance, the courts of justice of the peace, and the courts of exception.

Their operations, organization and competence are set by law. The Supreme Court, also known as the Superior Magistrate Council, is the highest court of the nation, followed in descending order by the Court of Appeals and the Court of First Instance.

There are few commercial laws in place and there are no commercial courts. Injunctive relief is based upon penal sanctions rather than securing desirable civil action. Similarly, contracts to comply with certain obligations, such as commodities futures contracts, are not enforced. Haitian judges do not have specializations, and their knowledge of commercial law is limited. Utilizing Haitian courts to settle disputes is a lengthy process and cases can remain unresolved for years. Bonds to release assets frozen through litigation are unavailable.

Business litigants often pursue out-of-court settlements. In Haiti, judges are appointed for a set number of years. Public prosecutors are direct employees of the Ministry of Justice and can be transferred or suspended by the executive branch at any time. There are numerous allegations of undue political interference.

Additionally, there are persistent claims that some Haitian officials use their public office to influence commercial dispute outcomes for personal gain. The Haitian government receives international assistance to increase the capacity of its oversight institutions and the capacity of the national police.

Laws and Regulations on Foreign Direct Investment The Investment Code prohibits fiscal and legal discrimination against foreign investors. The code explicitly recognizes the crucial role of foreign direct investment in promoting economic growth. It also aims to facilitate, liberalize, and stimulate private investment, and contains exemptions to promote investments that enhance competitiveness in sectors deemed priorities, especially export-oriented sectors.

Tax incentives, such as reductions on taxable income and tax exemptions, are designed to promote private investment. Additionally, the code grants Haitian and foreign investors the same rights, privileges, and equal protection. Foreign investors must be legally registered and pay appropriate local taxes and fees.

The code also established an Inter-Ministerial Investment Commission CII to examine investor eligibility for license exemptions as well as customs and tariff advantages. The Prime Minister, or his delegate, chairs the CII, which is composed of representatives of the Ministries of Economy and Finance, Commerce, and Tourism, as well as those ministries that oversee specific areas of investment.

The CII must authorize all business sales, transfers, mergers, partnerships, and fiscal exemptions within the scope of the code. The CII also manages the process of fining and sanctioning enterprises that disregard the code.

The following areas are often noted by businesses as challenging aspects of Haitian law: operation of the judicial system; publication of laws, regulations, and official notices; establishment of companies; land tenure and real property law and procedures; bank and credit operations; insurance and pension regulation; accounting standards; civil status documentation; customs law and administration; international trade and investment promotion; foreign investment regulations; and regulation of market concentration and competition.

Although these deficiencies hinder business activities, they are not specifically aimed at foreign firms; rather, they appear to affect both foreign and local companies. Competition and Antitrust Laws There is currently no law to regulate competition. Haiti is one of the most open economies in the region. The investment code provides the same rights, privileges, and equal protection to local and foreign investors. Anti-corruption legislation also criminalizes nepotism and the dissemination of inside information on public procurement processes.

Haiti does not, however, have anti-trust legislation. Expropriation and Compensation The Constitution allows expropriation or dispossession only for reasons of public interest or land reform and is subject to prior payment of fair compensation as determined by an expert. If the initial project for which the expropriation occurred is abandoned, the Constitution stipulates that the expropriation will be annulled, and the property returned to the original owner.

The Constitution prohibits nationalization and confiscation of real and personal property for political purposes or reasons. Title deeds are vague and often insecure. The Haitian government established the National Institute of Agrarian Reform to implement expropriations of private agricultural properties with appropriate compensation. The agrarian reform project, initiated under the Preval administration , was controversial among both Haitian and U.

There have been complaints of non-compensation for the expropriation of property. Moreover, a revision of the land tenure code, intended to address issues related to the lack of access to land records, surveys, and property titles in Haiti, has been pending in parliament since The Haitian government appears to recognize that weak enforcement mechanisms and a lack of updated laws to handle modern commercial disputes severely compromises the protections and guarantees that Haitian law extends to investors.

Haiti is not a signatory to the Inter-American-U. Investor-State Dispute Settlement Haiti is a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which provides for the enforcement of an agreement to arbitrate present and future investment disputes. Under the convention, Haitian courts can enforce such an agreement by referring the parties to arbitration.

Disputes between foreign investors and the state can be settled in Haitian courts or through international arbitration, though claimants must select one to the exclusion of the other. A claimant dissatisfied with the ruling of the court cannot request international arbitration after the ruling is issued. The law provides mechanisms on the procedures a court should follow to enforce foreign arbitral awards issues. While there is not a consistent history of extrajudicial action against foreign investors, a number of investment dispute cases have been reported by U.

Disputes most frequently related to disagreements between business owners and Haitian tax and licensing authorities, a lack of clarity as to land ownership and other disputed property claims, and disputes over the enforcement of government contracts and concessions. Although some businesses were able to resolve disputes through the court system or by otherwise settling with the Haitian government, business owners appear to have accepted their losses and abandoned other legacy cases.

International Commercial Arbitration and Foreign Courts International arbitration is strongly encouraged as a means of avoiding lengthy domestic court procedures. In principle, foreign judgments are enforceable under local courts. In , the Haitian Chamber of Commerce and Industry and the Inter-American Development Bank jointly developed the Haitian Arbitration and Conciliation Chamber, which provides mechanisms for conciliation and arbitration in private commercial disputes.

This approach offers many benefits that allows the parties to find their own solution to their disputes. There are three phases of bankruptcy under Haitian law. In the first stage, payments cease to be made and bankruptcy is declared. In the second stage, a judgment of bankruptcy is rendered, which transfers the rights to administer assets from the debtor to the Director of the Haitian Tax Authority Direction Generale des Impots.

In practice, the above measures are seldom applied. Since , most bankruptcy cases have been settled between the parties. Many companies went bankrupt after being attacked by violent protesters. Lack of insurance coverage and the complexity of compensation proceedings make it difficult for many to restart their businesses.

The state does not have a court assessing the losses of businesses for state financial compensation for bodily or patrimonial damages. While the provisions of Article of the Haitian Penal Code states perpetrators should be punished in hard labor in perpetuity, many of these crimes remained unsolved.

Although the concepts of real property mortgages and chattel mortgages — based on collateral of movable property, such as machinery, furniture, automobiles, or livestock to secure a mortgage — exist, real estate mortgages involve antiquated procedures and may fail to be recorded against the debtor or other creditors. Property is seldom purchased through a mortgage and secured debt is difficult to arrange or collect. Liens are virtually impossible to impose and using the judicial process for foreclosure is time consuming and often futile.

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