The Free Zones Programme is governed by the Free Zones Act Chapter 81:07.
The Trinidad and Tobago Free Zones Company Limited was incorporated in 1988 to administer the Free Zones Programme under the provisions of the Free Zones Act.
The Free Zones Programme of Trinidad and Tobago has as its focus the encouragement of both foreign and local investors to set up manufacturing, international trading and services operations, within free zones, dedicated to exports, with a view to encouraging and facilitating:
Free Zones import and export functions can be considered akin to deferred transshipments. As such they are not subject to licensing and are free of payment of import duties and VAT. In addition, approved free zone enterprises are exempted from a number of taxes.
The activities which may be carried out in a free zone are listed in the First Schedule of the Free Zones Act.
Petroleum, natural gas or primary petrochemical production or any production activity in which petroleum, natural gas or petrochemicals are a major input, even if used as a fuel.
Free Zone areas are designated by Order of the Minister upon the recommendation of the Free Zones Company.
A free zone enterprise must be a company incorporated or registered in Trinidad and Tobago and the approved free zone activity must be the only activity carried on by the enterprise in Trinidad and Tobago.
Enterprises are approved by Order of the Free Zones Company to carry out approved activities in designated free zones. While Free Zone Orders are required to be gazetted, they come into effect on the date stated in the Order, as provided for in the Statute Act.
All laws of Trinidad and Tobago, including the Customs Act, apply within free zones except to the extent specifically varied or excluded by the Free Zones Act. In the event of conflict between the provisions of the Customs Act and the Free Zones Act, the provisions of the Free Zones Act shall prevail.
In accordance with the provisions of the Customs Brokers and Customs Clerk Act, Chapter 78.03, approved enterprises are required to utilize the services of registered customs clerks or brokers as applicable.
An approved enterprise is required to notify the Free Zones Company within 14 days of any purchase or transfer of shares in the enterprise.
No person may enter, remain in or reside in any free zone without the prior permission of the Free Zones Company.
Access to the free zone will generally be restricted to people who can be identified as having valid reasons for being in the zone. Such people would include approved enterprise officials and employees, people having a business relationship with the approved enterprise, customs officers and such other persons as may be approved by the Free Zones Company from time to time.
Approved free zone enterprises are required:
Approved enterprises are entitled to import into a free zone, free from all duties, taxes and licences, goods intended to be used for or in connection with the approved activity or for the equipping, construction, alteration, reconstruction, extension or repair to the infrastructure or premises situated within a free zone, including facilities necessary for administration and the health, safety, hygiene and welfare of employees.
The purchase of goods from the customs territory by an approved enterprise is not subject to any customs duties or approvals.
Goods purchased by free zone enterprises from the customs territory are deemed to be exported from the customs territory (for the purposes of duty drawback under the Customs Act).
All goods brought into a free zone must be consigned to an approved enterprise (or to a commercial bank acting on behalf of any party to the transaction involving an approved enterprise).
No goods which are prohibited by law from being imported into Trinidad and Tobago may be imported into a free zone.
The following goods may not be taken into or stored in a free zone, except with the prior permission of the Free Zones Company:
The retail sale within a free zone of goods imported free of duty, or of goods manufactured or manipulated therefrom, may not be conducted within a free zone without the prior written approval of the Comptroller of Customs and the Free Zones Company.
Sales from a free zone to the customs territory must be contracted on a wholesale basis, to a third party.
Where, upon any inspection or reconciliation of inventory in a free zone the Comptroller discovers any deficiency of material imported with duty benefit, the approved enterprise shall be required to pay customs duty and value added tax on such deficiency at the rate prevailing at the date of discovery. Where however, the Comptroller is satisfied that the deficiency was caused by reasonable wastage or unavoidable breakage, leakage or other accident, he will not charge any customs duty on the deficiency.
Approved enterprises shall permit the Comptroller, at all reasonable times, to inspect articles imported with any benefit in respect of customs duty under the Free Zones Act and records thereof. In accordance with normal practice, customs officials would make reasonable arrangements, with the approved enterprise, for inspection.
An approved enterprise may not import into a free zone or use or sell any article imported into a free zone with any duty benefit under the Free Zones Act, for purposes other than those of the approved activity.
Approved enterprises involved in international trading in products at a free zone may not break up, assemble, mix or otherwise manipulate or re-package goods brought into a free zone without the prior written approval of the Free Zones Company. Where such approval is granted, the approved enterprise is required to keep computerized records to account for all goods so manipulated and to ensure that labeling, including country of origin, accords with applicable international requirements.
All goods imported into a free zone from overseas or from the customs territory are subject to zero VAT rate.
In the case of imports from the customs territory, the supplier must obtain an order from the approved free zone enterprise and a receipt for the delivery of the goods into the free zone, quoting the free zone approval order.
Services purchased by approved enterprises from the customs territory (e.g., rent, electricity, etc.) are subject to VAT at the current rate of 15%.
Approved enterprises may not export or send goods into the customs territory without written approval of the Free Zones Company (such approval where granted would normally be limited to a maximum of 20%-25% of total sales on an annual basis).
Such exports to the customs territory are, (by virtue of Section 18 (7) of the Free Zones Act and a CARICOM COTED decision) subject to all import requirements as for imports into Trinidad and Tobago from extra-regional sources. Compliance is monitored by the Free Zones Company through reports and export entries.
The approved enterprise would raise an invoice for the sale and the importer in the customs territory would submit an entry (C82) to Customs for approval, (the particulars of the free zone and approved enterprise would be noted in the boxes on the C-82 in place of the importing country, the shipper and the ship), pay the necessary duties and VAT and submit the documents to the Customs Officer at the Free Zone to take delivery.
By Virtue of a CARICOM COTED 1999 decision, goods manufactured in a (CARICOM) free zone area do not qualify for CARICOM origin certification and duty free treatment when exported to a CARICOM country, including to the customs territory of the CARICOM country in which the free zone is located.
By virtue of the same COTED decision it has been ruled that products manufactured in the customs territory of a member country and certified as of CARICOM origin, if transported into a CARICOM free zone, would lose its CARICOM origin certification and upon being exported from the free zone would be subject to payment of import duties on being exported to any CARICOM member state.
Approved enterprises are required to maintain computerized inventory control and record-keeping systems, capable of accounting to the satisfaction of the Free Zones Company and the Comptroller, for all dutiable merchandise imported into a free zone.
Forklifts and like equipment which would be utilized only in connection with the approved activity within the free zone may be imported free of duty by approved enterprises. However, motor vehicles, which would of necessity be utilized outside the free zone, do not quality for duty free treatment.
Approved enterprises are required to carry out a physical inventory and reconciliation report, not less frequently than once in each calendar quarter, to account for all dutiable merchandise imported into the free zone. The Comptroller must be given prior notification of each physical inventory and the report must be made available for the scrutiny of the Comptroller and the Free Zones Company.
Sale or transfer of goods imported into a free zone with any benefit in respect of customs duty, from one approved enterprise to another within a free zone, or between free zones, or a customs bonded facility, will be permitted subject to completion of the necessary transfer documentation and records provided the sale or transfer accords with the purpose of the approved activity of the approved enterprise.
The Free Zones Company may dispose of goods or property abandoned in a free zone, for a period exceeding six months, by destruction, sale or otherwise subject to the provisions of the Act.
Approved activities may be carried out in a free zone without limitation as to time. However, no goods with benefit of duty waiver under the Free Zones Act may be brought into or taken out of a free zone, except with prior notification and arrangements made with the customs officials responsible for the free zone.
Where a customs officer is stationed at a free zone, the approved enterprise is required to pay to the Comptroller the normal fees for the services of such an officer. Where a customs officer is not stationed at the free zone, but service is provided from a central customs post, the approved enterprise is required to pay the Comptroller for the relevant services provided at the rates provided under the customs regulations.
Customs are primarily concerned with the movement of conveyances and goods into and out of free zones, to the extent of the provision of proper documentation and the integrity of customs seals. However, in accordance with the provisions of the Customs Act, Sections 64, 206 and 207, customs officials have the right to carry out searches, upon having reasonable suspicion.
Samples of goods may be displayed in a free zone but shall be subject to payment of the relevant duty upon being exported into the customs territory except where the Comptroller of Customs is satisfied the samples are of no commercial value.
To qualify for waiver of duty on being taken into the customs territory from the free zone, samples must be cut, mutilated or otherwise marked so as to render them not merchantable, to the satisfaction of the Comptroller.
Imports into free zones and exports from free zones to outside of Trinidad and Tobago are covered by a single classification number under section XXII of the First Schedule to the Customs Act.
Imports from free zones into the customs territory are subject to the normal customs classification (commodity codes).
If any goods are imported into a free zone not for or in connection with the approved activity (e.g., food or beverages for consumption in the free zone), such goods would be subject to all import requirements and payment of duties and taxes (by the approved enterprise) which are applicable upon import into the customs territory.
In the case of free zone imports or exports, CARICOM invoices are not obligatory and therefore commercial invoices are acceptable.
Free zone imports and exports to outside of Trinidad and Tobago are exempt from licensing requirements. (Exports from free zones to the customs territory would be subject to the same licensing requirements, if any, as apply to goods imported from extra-regional countries.)
Consequently, free zone import/export customs entries are not required to be referred by Customs to other agencies (e.g., Trade, Health, etc.) except in such cases where explosives or unprocessed animal or plant products are being imported.
Having regard to the exemptions applicable to free zone imports and exports and their treatment, virtually as transshipments, screening of entries would be superficial and therefore expeditious.
The relevant customs officer will authorize delivery of the shipment to the free zone. The examination of goods imported into the free zone is carried out at the free zone at the discretion of the Comptroller in accordance with customs examination selection procedures.
Although not usually the practice, where examination of an export shipment is required by the Comptroller, the approved enterprise will be advised by the relevant customs officer and arrangements will be made to facilitate such inspection prior to completion of stuffing and sealing of the container.
The customs officer will issue an advice note and the shipment will be dispatched to the relevant port of export.
Sealed containers and other securely packaged products are permitted by the Comptroller to transit the customs territory to or from a free zone. The management/security at the free zone is required to record receipt of imported goods at the free zone with seals, etc., intact. The records are subject to inspection and verification by the Comptroller.
The receipt of exported goods at the port is evidenced by the signature of the agent for the exporting vessel or aircraft.
Containers imported into free zones are exempt from the Customs (Container Examination) Regulations. Examination of containers is carried out, at the Comptroller’s discretion, at the free zones.
Dutiable value of goods released for sale to the customs territory will be determined on the basis of the definition of “value” under the provisions of the Sixth Schedule to the Customs Act, similar to such goods being imported from abroad. The fact that the buyer and seller are related shall not in itself be grounds for regarding the transaction value as unacceptable.
Destruction of any goods imported into a free zone, free of customs duty, must be documented and approved by the relevant customs officer on customs form “Destruction Certificate re Goods in a Free Zone” (Appendix I).
Where recoverable waste is sent into the customs territory (with approval of the Free Zones Company) it shall be dutiable in its condition and quantity and at its weight at the time of entry. In respect of such exports from free zones into the customs territory, tariff classification for duty purposes will be based on the identity of the waste or refuse itself at the time of disposal. Its dutiable value, if any, will be determined in accordance with the definition of “value” under the provisions of the Customs Act.
Where the waste which is to be disposed of in the customs territory is irrecoverable and is to be disposed of as such by waste disposal means, or by rendering, no duty would be charged.
Where the actual goods received in a free zone do not correspond with the documents relating to the entry of those goods, the discrepancy must be reported by the approved enterprise to the relevant customs officer.
Basically all manufacturing processes must be carried out within the free zone. If it is considered desirable to contract out part of the manufacturing process to manufacturers outside of the free zone, prior permission must be obtained from the Free Zones Company and the Comptroller of Customs.
Upon the recommendation of the Free Zones Company, the Minister may designate an area a multi-user free zone to accommodate the approved activities of several approved enterprises. The Free Zones Company enters into agreements with Free Zone Operators for the development of the free zone, for provision of structures and facilities therein and for the operation and management of the free zone, upon such terms and conditions as are considered appropriate for the particular free zone, having regard to the requirements of the Act and the characteristics of the free zone.
The Free Zone Operator shall operate and manage the free zone in accordance with the terms and conditions of the Order made by the Free Zones Company under the Free Zones Act and the lawful instructions of the Free Zones Company and shall take all reasonable steps to ensure that:
The Free Zone Operator is also required to:
Where the Free Zones Company is satisfied that suitable multi-user free zone facilities are not available, or that large scale manufacturing or service enterprises cannot be accommodated in available multi-user free zones or require to be located in a particular location, the Free Zones Company would make recommendation to the Minister for designation of an area as a single enterprise free zone to accommodate the activity of a particular approved enterprise.
Premises considered suitable for designation as single enterprise free zones must be of permanent, solid construction and must be fenced and otherwise secured to the satisfaction of the Free Zones Company and the Comptroller of Customs.
Except in exceptional circumstances, single enterprise free zone designations will not be considered for international trading activities (which require the services of an on-site customs officer).
Once a property has been designated a free zone by the Minister, and subject to the applicant satisfying the necessary criteria, the Free zones Company would grant approval to the enterprise to carry out the approved activity in the free zone.
The approved enterprise must enter into an agreement with the Free Zones Company covering the proper maintenance of the free zone and for the management and security of the free zone.
Except where the size and scope of the operation warrants it, it will not normally be economical to have a customs officer stationed at single enterprise free zone premises. As a consequence, all imports and exports will be organized through prior arrangements made with the designated customs officer for the area.
The import and export procedures applicable to goods entering or exiting a multi-user free zone will generally apply to goods entering or exiting a single enterprise free zone.