MINISTRY OF LABOUR AND SMALL AND MICRO
ENTERPRISE DEVELOPMENT
Enterprise Development Division
DRAFT
MICRO AND SMALL ENTERPRISE (MSE) POLICY
FOR TRINIDAD AND TOBAGO
2013 - 2016
September, 2013
CONTENTS
Acronyms and Abbreviations ........................................................................................................................ 4
Definitions ..................................................................................................................................................... 6
Executive Summary....................................................................................................................................... 9
Policy Summary........................................................................................................................................... 10
A.
Overview of the MSE Sector ............................................................................................................... 15
A.1.Cross-cutting Issues ...................................................................................................................... 18
B.
National Policy Context ....................................................................................................................... 19
B.1 Diversification ............................................................................................................................... 19
B.2 Unemployment and Poverty Reduction ....................................................................................... 19
B.3 Public Sector Programmes for MSE Development ....................................................................... 20
C.
Goal, Objectives and Principles ........................................................................................................... 23
C.1. Goal .............................................................................................................................................. 23
C.2. Objectives .................................................................................................................................... 23
C.3. Principles ...................................................................................................................................... 23
D.
Policy Areas ......................................................................................................................................... 25
MSEs and Entrepreneurship in Trinidad and Tobago ......................................................................... 25
D.1 Business Environment ...................................................................................................................... 26
D.1.1 Definition of MSEs ..................................................................................................................... 26
D1.2 Government Bureaucracy and Licensing .................................................................................... 28
D1.3 Market Access............................................................................................................................. 29
D.2 Financing........................................................................................................................................... 32
D.3 Business Development and Support Services .................................................................................. 35
1.
Information availability ............................................................................................................... 36
6.
Green Enterprises ....................................................................................................................... 37
7.
Physical Infrastructure ................................................................................................................ 38
8.
Public-Private Partnerships ......................................................................................................... 38
D.4 Governance and Advocacy ............................................................................................................... 38
D.4.1 Governance ................................................................................................................................... 38
D.4.2 Advocacy........................................................................................................................................ 39
D.
Implementation .................................................................................................................................. 41
2
E.1
MOLMSED ................................................................................................................................... 41
E.2
National Entrepreneurship Development Company Limited ..................................................... 41
E.
Conclusion ........................................................................................................................................... 43
F.
Appendices .......................................................................................................................................... 44
Appendix I: Policy Development Methodology ...................................................................................... 44
Appendix II: Seven Interconnected Pillars for Sustainable Development .............................................. 46
Appendix III: Social Areas for MSE Development ................................................................................... 47
Appendix IV: Policy Areas and International Best Practices ................................................................... 48
Appendix V: Approved Small Company Status ....................................................................................... 56
Appendix VI: Statutory Licenses/Permits................................................................................................ 58
Appendix VII: Enterprise Investment Fund ............................................................................................. 63
Appendix VIII: Overview of Existing Incentives for Local Business ......................................................... 64
G.
References .......................................................................................................................................... 70
Swedish International Development Cooperation Agency : Fact Finding Study : The Informal
Economy (2004) .................................................................................................................................. 71
3
Acronyms and Abbreviations
ACTT
Accreditation Council of Trinidad and Tobago
BIR
Board of Inland Revenue
CARIRI
Caribbean Industrial Research Institute
CBI
Commercial Business Incubators
CBBI
Community-Based Business Incubators
CCI
Council for Competitiveness and Innovation
CDD
Co-operative Development Division
CDF
Community Development Fund
CROSQ
CARICOM Regional Organisation for Standards and Quality
CSO
Central Statistical Office
CSR
Corporate Social Responsibility
EDD
Enterprise Development Division, MOLSMED
EIF
Enterprise Investment Fund
FTC
Fair Trade Commission
GORTT
Government of the Republic of Trinidad and Tobago
IADB
Inter American Development Bank
ICT
Information and Communications Technology
IBIS
National Integrated Business Incubation System
ILO
International Labour Organisation
ISO
International Organisation for Standardisation
MCD
Ministry of Community Development
MIC
Metal Industries Company Limited
MIPED
Mayaro Initiative for Private Enterprise Development
MEEA
Ministry of Energy and Energy Affairs
4
MEWR
Ministry of Environment and Water Resources
MFE
Ministry of Finance and the Economy
MHLMA
Ministry of Housing, Land and Marine Affairs
MLA
Ministry of Legal Affairs
MLG
Ministry of Local Government
MOLSMED
Ministry of Labour and Small and Micro Enterprise Development
MoL
Ministry of Local Government
MoE
Ministry of Education
MPSD
Ministry of Planning and Sustainable Development
MSE
Micro and Small Enterprises
MSME
Micro, Small and Medium Enterprises
MTII
Ministry of Trade, Industry and Investment
NEDCO
National Entrepreneurship Development Company Limited
NTA
National Training Agency
OECD DAC
Organisation for Economic Cooperation and Development Assistance Committee
RIC
Regulated Industries Commission
SEBA
Small Enterprising Business Association
SWMCOL
Solid Waste Management Company Limited
TTBS
Trinidad and Tobago Bureau of Standards
TEST
Ministry of Tertiary Education and Skills Training
TTMSEC
Trinidad and Tobago Micro and Small Enterprise Council
5
Definitions
Angel Investor
An investor who provides financial backing for small start-ups, usually, the entrepreneur’s family and friends; the
capital they provide can be a one-time injection of seed money or ongoing support to carry the company through
difficult times. They are focused on helping the business succeed, rather than reaping a huge profit from their
investment. In this way, the angel investor is essentially different from the venture capitalist.
Business Incubation
The provision of facilities, services and procedures established to nurture young (start-up) firms during their
early months or years, providing resources such as affordable space, office services, handson management training, marketing, information technology and communications support and, often, access to
some form of financing.
Co-operatives1
A co-operative is an autonomous association formed by a group of persons, businesses or communities, in which
members voluntarily work together and combine resources for their mutual, social, economic, and cultural benefit.
Co-operatives may be financial of non-financial. Credit unions are the most popular form of co-operative in
Trinidad and Tobago.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility is a business enterprise’s initiative to assess and take responsibility for the
company's effects on the environment and impact on social welfare. The term generally applies to company efforts
that go beyond what may be required by regulators or environmental protection groups and do not immediately
provide financial benefit.
Creative Industries
This refers to a range of economic activities which have their origin in individual creativity, skill and talent, which in
turn have a potential for job and wealth creation through the generation and exploitation of intellectual property.
Creative industries include printing, architecture, advertising, publishing and multimedia, audiovisual,
phonographic and cinematographic productions as well as crafts and design. Additionally, all cultural or artistic
production, whether live or produced as an individual unit will be included under this definition.
Decent Work/Decent Work Agenda
Decent work is employment characterised by remuneration that can sustain livelihood, where rights are
guaranteed, where social protection is extended and where there is some level of social dialogue.2 The Decent
Work Agenda comprises the four (4) strategic objectives of promoting fundamental principles and rights at work,
job creation, enhancement of social protection and promotion of social dialogue.
1
2
http://www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_ent/documents/publication/wcms_094046.pdf
http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-i.htm
6
Entrepreneurial Culture
A system of collective behaviours and attitudes toward all types of business activity , formed by a nation’s values,
visions, norms, working language, work ethic, education, technical skills, experience, expertise, beliefs and habits.
These elements determine how stakeholder (individuals and groups) interact with each other and how business
ideas are pursued.
Entrepreneurial Ecosystem
The environment affecting the local entrepreneurship including cultural elements outside of the entrepreneur,
which operate at varying levels of authority and which, as a network, collectively influence the recognition of
business opportunities, capacity to acquire experience, skill and expertise to realise opportunities, among others.
The ecosystem encompasses the network of all stakeholders affecting the business climate, such as
Government, education institutes, the private sector, especially banks, social leaders, research centres, labour
representatives, multinationals and international aid agencies, among others.
Green Enterprise
A green business works to reduce its impact on the environment, society and the economy through such methods
as reducing greenhouse gas emissions, reducing waste and reducing the use of harmful chemicals. Green
businesses are often characterized by the following:
1.
2.
3.
4.
They include environmental criteria in all major business decisions
Whenever possible they supply environmentally friendly products or services
The business is clearly concerned about its environmental impact
The business has made a long-term commitment to applying environmental criteria in its daily operations
Innovation
The process of finding and implementing new ways of doing business or producing goods and services which both
improve goods, services and processes and which add commercial value.
Long term
Any period longer than 3 years
Medium term
A period of between 1 and half years (18 months) to 4 years
Public-Private Partnership (PPP)
PPPs are any alliance which makes use of physical and/or intangible resources, involving the Government and the
private sector.
Risk capital
Risk capital refers to funds used for high-risk, high-reward investments. Such capital can either earn spectacular
returns over a period of time, or may dwindle to a fraction of the initial amount invested if investment ventures
prove unsuccessful. Diversification is key for successful investment of risk capital. In the context of venture capital,
risk capital may also refer to funds invested in a promising start-up business enterprise.
7
Seed capital
Initial capital used to start a business, often coming from the company founders' personal assets or from friends
and family. This amount of money is usually relatively small because the business is still in the idea or conceptual
stage, and the seed capital is needed for research and development, to cover initial operating expenses until a
product or service can start generating revenue.
Service provider
Any private sector agent involved in providing goods and services, including financial services, to MSEs, either as a
primary clients or as a part of their wider client pool.
Social dialogue
The definition of social dialogue adopted is in conformity with the ILO definition, which is that it “… includes all
types of negotiation, consultation or simply exchange of information between, or among, representatives of
Governments, employers and workers on issues of common interest relating to economic and social policy.” 3
Venture Capital
Money provided by investors to start-up firms and small businesses with perceived long-term growth potential.
This is a very important source of funding for start-ups that do not have access to capital markets. It typically
entails high risk for the investor, but it has the potential for above-average returns. Venture capitalists often have a
more direct influence over the day-to-day operations of the enterprises in which they invest.
3
http://www.ilo.org/ifpdial/areas-of-work/social-dialogue/lang--en/index.htm
8
Executive Summary
The Micro and Small Enterprise Policy responds to the current lack of cohesiveness among the support
systems of MSEs and deficiencies in the quality of tools that support business growth. Viable micro and
small businesses are recognised as the key to economic diversification and social transformation at the
very basic level. The Policy therefore aims to integrate the existing business support services in Trinidad
and Tobago to create a cohesive ecosystem for supporting both entrepreneurship and small business
growth. It aims to apportion equitable treatment to MSEs as to medium and large businesses.
The needs of the MSEs may be grouped into four (4) key areas: the business environment, financing,
business development and support services, and governance and advocacy. The specific issues were
identified and specific recommendations made to address all of the challenges.
Recommendations focus- on simplifying processes for MSE registration and participation as well as
reporting. Also, there were recommendations for tax incentives, credits and rebates. Another key
recommendation was the creation of the Enterprise Investment Fund that seeks to create more
harmonization, oversight and effectiveness of MSE development programmes, thus proposes to ensure
that these support programmes impact favourably on MSE operations and success.
Other areas addressed include:






The definition of MSEs
Government bureaucracy and licensing regimes
Improved access to funding for MSE development
Improved access to domestic and international market (including the expanded use of a
government set aside programme (public procurement)
The thrust for greater innovation including green and environmentally sustainable practices
Access to information on and for MSEs.
Additionally, the system will be supported by a stronger governance and advocacy system that will
ensure greater coordination among the MSEs for affecting policies, programmes and private sector
decisions that affect them.
It is anticipated that, when fully implemented, the contribution of MSEs to economic development will
increase exponentially within the next (10) years. The quality of MSEs is always expected to improve
substantially.
9
Policy Summary
Policy Area
Business
Environment
Policy Sub-Area
Definition of MSEs
Policy Recommendations and Actions
(i) New definition for MSEs which is up-to-date, enables revisions and
categorizes MSEs as an economic sector nationally. The criteria for the new
MSE definition are:
Size of
enterprise
Mini-micro
Micro
Small
Number of
Employees
≤1 including
owner/manager
≤5 including
owner/manager
≤25 including
owner/manager
Asset Value4
Up to $100,000
$100,001 $500,000
$500,001 $5,000,000
Turnover (per
annum)
Up to $250,000
Up to $2,000,000
Up to
$10,000,000
MSEs must meet at least two (2) of the stated criteria and must also meet the
owner-manager criterion.
(ii) These basic criteria will be reviewed on a periodic basis to account for
inflation, structure of small businesses, relevant international, regional and
local trends and national development priorities.
(iii) Use of the MSE definition to channel benefits to the MSE sector. Those micro
and small businesses that meet the MSE criteria will be eligible to receive all
existing MSE support mechanisms.
Government bureaucracy and licensing
4
Asset values exclude land and buildings.
(i) MOLSMED will create an online directory for sharing information among all
registered MSEs MOLSMED
(ii) MOLSMED commits itself to work with the appropriate Government agencies
to simplify business procedures for registered and Certified MSEs.
Market access
Domestic Market Access
International Market Access
Finance
Public sector financing
Private sector financing
Incentives
Taxation
Quality of information
(i) Facilitation of Market Entry to improve domestic market access to MSE
products by Government and private sector purchasers.
(ii) Identification of suitable geographic locations and the formation of clusters in
specific sectors to address location challenges of MSEs.
(iii) Strengthening of information channels to provide relevant, adequate and
quality information to MSEs.
(i) Maintain a register of international trade fairs where MSE groups can
showcase their products and services.
(ii) Create on online presence for domestic MSEs’ goods and services for
international access.
(iii) Improve the quality of information on international standards required for
penetrating foreign markets as well as information on training for achieving
said standards.
Public sector financing
(i) Expansion of the funding options offered by NEDCO.
(ii) Greater access to Government funding programmes
(iii) Funding through public/private sector partnerships for agencies and
programmes that assist MSEs.
Private sector
(i) Seek MSE financing opportunities by creating incentives for investments in
MSEs.
(ii) Support the use of the stock market to make investors more accessible to
MSEs.
Incentives
MOLSMED would explore more equitable incentive systems that may also create
incentives for MSE development and growth
Taxation
(i) Tax incentives to encourage entrepreneurship and innovation.
(ii) MSEs certified under FairShare will benefit from a tax credit
11
Business
Development
and Support
Services
Information availability
Standard Setting
Innovation
Formal Education
Mentorship Network
Green Enterprises
Physical Infrastructure
Public-Private Partnerships
Quality of information
(i) Provide comprehensive information on funding opportunities and other
services and resources available to MSEs.
(ii) Promote programmes that utilise independent MSE rating agencies.
Information availability
Encourage the structured registration of all MSE support services provided by
public and private sector agencies.
Standard Setting
Guide the networking of agents within the education and training sector, to apply
training in standards for MSEs along two lines, namely:
(i) Management and operational standards5
(ii) Product and Service quality standards
Innovation
Champion the promotion of innovation within the MSE sector within four (4)
categories:
(i) Adoption of existing technologies.
(ii) Creation of new methods and technologies.
(iii) Adoption of ICTs specifically to improve the efficient operation of MSEs.
(iv) “Green” innovation
Formal Education
Partner with relevant Ministries to incorporate entrepreneurship into curricula as
a core element is to foster a culture of risk-taking, creativity, resourcefulness and
innovation.
Mentorship Network
Creation and utilisation of mentoring systems. The network will also encompass
regional and international mentors and similar support networks that already
exist.
5
The “Trinidad and Tobago Standard for good Management Practices for MSEs”, scheduled for launch in 2013.
12
Green Enterprises
Develop a Green Enterprise Development Policy in partnership with the public
and private sector to:
(i) Create new green enterprises;
(ii) Support existing businesses whose core activity is economic greening ;
(iii) Inculcate sustainable business practices among all MSEs.
(iv) Create a green certification process for MSEs
Physical Infrastructure
Provide economically priced facilities to MSEs actively involved or poised to be
actively involved in economic diversification. Such facilities include: Location, ICT
Infrastructure, Utilities and Amenities, Shared Assets and Security.
This will be created through:
(i) Enterprise zones to support development in targeted communities, based on
the identification and expansion of growth poles.
(ii) Affordable accommodation in collaboration with eTecK within its industrial
parks.
(iii) Private sector participation to provide physical facilities to MSEs.
Governance
and Advocacy
Governance
Public-private Partnerships
(i) Fund private-sector programmes and projects that strengthen the MSE
sector, foster a culture of entrepreneurship and innovation, support
internationalisation of MSEs and meet other MSE- related goals, while
proving greater oversight through the M&E System to ensure the
effectiveness of these programmes.
(ii) Develop an Enterprise Investment Fund to support the Public-Private
Partnership for MSE development.
The Role of Enterprise Development Division (EDD)
The MOLSMED, through the Enterprise Development Division (EDD), will be
responsible for development of policies and programmes for the MSE sector, and
will liaise with Government authorities and other stakeholders to ensure that
MSEs are favourably impacted by Government and private sector policies and
programmes.
13
Trinidad and Tobago Micro and Small Enterprise Council (TTMSEC) will:
(i) Propose strategic options and priorities.
(ii) Provide feedback from the various stakeholders on MSE development.
(iii) Propose recommendations to the stakeholders’ programmes.
(iv) Advise on mechanisms that contribute towards harmonization.
(v) Advise on measures to improve MSE developmental institutions.
Advocacy
Areas for
Women, Youth and mentally and
Social
physically disabled and other people in
Empowerment special circumstances.
Harmonization of MSE Development Programmes
Streamline policies, programmes and processes, in order to create a seamless
support system for MSEs.
(i) The EDD will be an advocate for the MSE sector.
(ii) The EDD will also relate to the Trinidad and Tobago Micro and Small
Enterprise Council (TTMSEC), the Fair Trade Commission (FTC) and the
Regulated Industries Commission (RIC) to strengthen its advocacy functions.
Ensure that the interests of these groups are accounted for wherever possible in
the Policy.
14
International Context
In both developed and developing
countries, micro, small and medium
enterprises (MSMEs) have been
recognised as important engines of
growth
and
economic
reengineering. In many developed
countries, including the United
States of America, Japan and
Germany, the contribution of
MSMEs to gross domestic product
(GDP) exceeds 50 per cent. In
developing countries, the official
contribution of MSMEs to GDP is
substantially less.
In India, a
developing
country,
MSMEs
contribute approximately 22 per
cent to GDP in 2011. In Trinidad
and Tobago, MSMEs are estimated
to contribute nearly 28 per cent to
GDP, represent more than 20,000
enterprises,
employment
of
200,000 persons and 85 per cent of
all registered businesses.
As of October, 2011, Trinidad and
Tobago was removed by the
Organisation
for
Economic
Cooperation and Development
Assistance Committee (OECD DAC)
from its list of beneficiary countries.
The
international
community
therefore
considers
economic
fundamentals adequate to put the
nation on par with developed
countries. This will include our
approach to entrepreneurship and
MSEs.
A. Overview of the MSE Sector
Micro and Small Enterprises in Trinidad and Tobago face a
compendium of interrelated challenges.
One of the primary difficulties is market access - the ability of MSEs
to penetrate markets, local, regional and international. For
domestic market access, the main obstacle is the scarcity of
information regarding market opportunities for MSEs dispersed
throughout the country. There is also a lack of information on
opportunities from the Government. The issue of information
becomes a more formidable obstacle for accessing international
markets. Furthermore, for foreign market penetration, there is the
additional complication of meeting international standards and the
need for MSEs to be organised so as to generate the quantum of
product for service worthy of international attention.
Financing MSEs have particular demand and supply-side problems.
On the demand side, the majority of the MSEs traditionally avoid
formal lending, resorting, instead, to fund initial operations with
personal savings or from informal lending networks. Even when
entrepreneurs and business owners approach official credit
institutions, applicants often apply for personal loans instead of
business loans. This has implications for the rates they face at such
formal institutions. In rural and more traditional communities, semiformal networks such as “sous sous” have filled part of the gap.
On the supply side, funding for start-ups is particularly precarious
for MSEs, especially when their area of business is new, unknown or
unchartered. There are at least seventeen (17) funding institutions
and groups that provide financing for MSEs in Trinidad and Tobago.
These include the National Entrepreneurship Development
Company Limited (NEDCO) – the finacing arm of the MOLSMED
policy on MSEs, six (6) venture capital companies 6 , Microfin
Caribbean (Caribbean Microfinance Trinidad Limited) who primarily
targets micro businesses, Mayaro Initiative for Private Enterprise
Development (MIPED), at least one (1) micro finance programme
arising from corporate social responsibility7 and several Government-owned and run programmes.
Additionally, MSEs are provided funding by the credit unions. Many traditional lenders are risk averse
6
Advisory and Mentoring Unit (AMU), Venture Capital Company (Add Venture Capital Fund Limited), the Venture
Capital Company Ltd (First National Credit Union) and the Venture Capital Incentive Programme, Iteq and the
Caribbean Development Capital Ltd (DevCap)
7
Helping Ourselves Prospers Economically (HOPE) based on the Grameen Bank model.
and so prefer to lend either small sums of money or at very high rates to small enterprises. Inexperience
with funding their operations exacerbates the challenges faced by MSEs. Whereas in North America,
creative forms of financing, such as venture capital, in-kind support and deep capital markets, have
served to augment the supply of risk capital, the same cannot be said for Trinidad and Tobago. Many
factors account for this, including a general lack of information throughout the MSE community
regarding financing options. On the supply side, venture capitalists are typically uninterested in small
businesses as opportunities are deemed to be too small. Consequently, MSEs make the dual complaint
that loan rates are unfairly high and that the quantity of available capital is insufficient.
The tax and statutory reporting system also contributes to the challenges faced by MSEs, as they are
typically required to meet the same reporting requirements as organizations with greater capacity.
Accordingly, there is need for a simplified statutory reporting system.
Business development and training describes one of the broadest areas of concerns for the policy. It
refers to the services within Trinidad and Tobago that develop the human resource capacity resident in
MSEs as well as to the installation of up-to-date and relevant technologies within MSEs. Business
development and training also refers to the knowledge of standards and the standardisation of the
goods and services provided by MSEs, and the services needed to address the deficiencies in the
entrepreneurial ecosystem. Many agencies offer various types of business development and training
services to MSEs but their effectiveness is unknown. These services are uncoordinated and there is no
attempt to determine their impact on MSE success.
From the public sector alone, as at the close of 2011, there were at least thirteen (13) Government
Ministries involved in MSE support. By and large, these programmes are developed outside of a
structured, coordinated framework. It often occurs where Ministries develop programmes along the
lines of economic activity, such as agriculture, energy, tourism where MSEs straddle several activities.
This sometimes results in duplication of effort by Ministries and may simultaneously create situations
where there is a lack of uniformity in the treatment of MSE beneficiaries.
At present, the MTII has the mandate of dealing with medium and large businesses while the MOLSMED
has the mandate for micro and small enterprises. Despite this division, until 2012, the Business
Development Company (BDC), under the auspices of the MTII, dispensed certification for MSMEs while
MOLSMED was omitted from the process.
Innovation and Productivity An additional area of significant deficiency relates to improved efficiency
and innovation. Business activity in Trinidad and Tobago is generally concentrated upon retail and
distribution activities that lack innovation. In the World Economic Forum’s 2012-2013 Global
Competitiveness Report (GCR), Trinidad and Tobago received a score of 4.01 out of 7 and a rank of 84
out of 144 countries. In the 2012-2013 GCR, with respect to innovation, in the measures “capacity for
innovation” and “quality of scientific research institutions” Trinidad and Tobago received scores of 2.4
and 3.2 out of 7 respectively, and ranks of 124 and 98 respectively out of 144 countries. Regarding
16
productivity, the nation scored 3.1 out of 7 and ranked 126 of 144 countries8. These figures strongly call
for improvement in Trinidad and Tobago’s innovation and productivity.
Suitable locations and supporting infrastructure refers to the fact that MSEs currently face the
challenges of costly property in terms of rent, amenities and utilities whether for operating a business
(such as ICTs), meeting and transacting with clients and storage of inventory, finished and semi-finished
products and equipment. Stemming from the problem of informality and in the context of high costs in
the formal sector, many MSEs opt for utilising private spaces such as the owners’ homes that may be in
violation of building codes, health and safety standards and can be threats to the physical environment.
Evolving Technologies and Enterprise Development Company (eTeck), an agency under the MTII, is
charged with managing the sixteen (16) industrial parks9 located throughout the country. However,
MSEs needs for physical infrastructure remain substantially unmet.
Lack of information between MSEs and the official state agencies which regulate, monitor and support
them also poses challenges to developing the sector. One of the significant problems in the MSE sector
is that neither the sector nor Government has comprehensive knowledge of the services on offer to
MSEs.
In addition to the aforementioned, the classification of businesses as MSEs has also created some
difficulty. The current classification takes into account the number of employees, the value of assets of
an enterprise and its turnover. Firstly, changes in these variables are not currently monitored in a
structured and holistic manner. Secondly, the definition was established in 2002, and has not been
adjusted for inflation, changes in business structure and the perception of market players regarding
what may be considered micro and small.
Lengthy and bureaucratic administrative processes pose notable challenges to the management of
businesses in Trinidad and Tobago. The average business will register separately at the Ministry of Legal
Affairs (MLA), the Board of Inland Revenue (BIR) and National Insurance (if there are employees), in
addition to obtaining special licences and permits for specific operations. Time spent at Government
administrative offices often represent a larger proportional loss of income for MSEs compared to
medium and large businesses. Further, in the area of monitoring and evaluation of MSEs, there is little
collective monitoring and appraisal of the sector.
8
The World Economic Forum’s annual Global Competitiveness Reports studies and benchmarks the many factors
underpinning national competitiveness, based on twelve (12) pillars of competitiveness : Institutions,
Infrastructure, Macroeconomic Environment, Health and Primary Education, Higher education and training, Goods
market efficiency, Labour market efficiency, Financial market development, Technological readiness, Market size,
Business sophistication and Innovation.
9
The current industrial parks are the following: Abattoir, Port of Spain, Biljah Industrial Park, Chase Village
Industrial Park, Diamond Vale Industrial Park, East Dry River Industrial Park, Frederick Settlement, Harmony Hall
Industrial Park, Macoya Industrial Park, Milford Industrial Park, Morvant Industrial Park, O'Meara Industrial Park,
Plaisance Industrial Park, Point Fortin Industrial Park, Point Lisas Industrial Park, Sangster's Hill, Tobago, Sea Lots
Industrial Park, Trincity Industrial Park
17
The Informal Sector and Micro and
Small Businesses
The informal
sector (or informal
economy) is that part of economic
activity that is neither officially
monitored nor taxed by the
Government. Its contribution to
GDP may be estimated but is not
measured.
The ILO notes that the informal
sector can be a problem because it
often
features
informal
employment without adequate
“protection in the event of nonpayment of wages, compulsory
overtime or extra shifts, lay-offs
without notice or compensation,
unsafe working conditions and the
absence of social benefits such as
pensions, sick pay and health
insurance.”
Operating in the informal sector can
also result in the exclusion of
enterprises from beneficial state
programmes, regulatory support
and the like. Nonetheless, the
informal sector plays a dominant
role in the MSE sector, accounting
for a significant part of MSEs, the
greater part of self -employment
and a substantial part of the
employment of other individuals.
Other key issues are the Governance and Advocacy for the MSE
sector. Advocacy refers to the need to ensure representation of
MSEs include fair trade, equitable treatment as contractors and
subcontractors, representation for inclusion in national policies and
programmes that affect MSEs, equitable access to domestic and
export markets, access to finance and the role that taxation policy
plays in MSE development. The Congress of Small Businesses,
starting in the 1970s and ending in the early 1990s, was an attempt
to form a governance agency. Currently, Small Enterprising Business
Association (SEBA) performs some governance role in Trinidad and
Tobago. Despite the relative success of this association, there are
still few nationwide fora in which MSEs can present their concerns,
opinions and interests on national and international issues. MSE
associations are integral to the wider social dialogue process.
Governance refers to the transparent and participatory process by
which the sector makes decisions and assumes positions on the
issues affecting them. Advocacy relies upon a strong governance
structure.
A.1.Cross-cutting Issues
A.1.1 Informality
Informality is not dealt with as a separate issue in this policy.
Informality is considered a symptom of other underlying conditions
and a lack of suitable incentives for formalisation. The choice to
remain informal may result from any number of sources, including,
but not limited to difficulty in accessing information about the
process of formalisation, the administrative complexities associated
with formalisation, the fear of taxation and the lack of relevant
incentives to become formalised. The policy therefore addresses
informality through treating with root causes, thereby encouraging
the transition towards formality indirectly. The overall mechanism for stimulating the transition
functions by creating incentives which will change the entrepreneurial ecosystem, so that formality
becomes a more attractive option for MSEs.
A.1.2 Social Empowerment and Inclusion
The consultations and research also highlighted special areas where MSEs can be used as a tool for
social empowerment, poverty alleviation, and social transformation. Additionally, there was interest in
the co-operative model as workable model for increasing the effectiveness of social objectives.
Consequently, the policy will use MSE activity in the area of:
1. Local economic development for low-income communities
2. Women and youth
18
3. Inclusion of the differently-abled (mental and physical) and others in special circumstances.
4. Integrating low-skilled labour in productive activities including the “green” economy.
For detail on the social objectives, see Appendix III.
B. National Policy Context
The present MSE Policy was preceded and informed by initiatives contained in the Enterprise
Development Policy and Strategic Plan for Trinidad and Tobago (2001-2005) and is in line with the
Trinidad and Tobago Medium Term Policy Framework (2011-2014) and the Ministry of Labour and Small
and Micro Enterprise Development’s Strategic Plan (2011-2015). These documents indicate the
Government’s desire to diversify and modernise the economy in harmony with social gains. The policy
goals are linked to the seven (7) Interconnected Pillars for Sustainable Development10 identified by the
Government for sustainable development of Trinidad and Tobago.
B.1 Diversification
Although petroleum and natural gas contribute11 45.3 per cent to Gross Domestic Product (GDP), the
total energy sector accounts only for estimated 3 per cent of the labour force, compared with services,
sixty-two (62) per cent, manufacturing eight (8) per cent) and construction sixteen (16) per cent. In
order to strengthen diversification efforts away from energy, emphasis must be placed upon the nonenergy sector, the majority of which is MSEs. The Medium Term Policy Framework 2011-2014 highlights
the importance of MSEs to economic diversification outside of the energy sector.
B.2 Unemployment and Poverty Reduction
Entrepreneurship and small business development are important tools for achieving social objectives,
including employment creation and poverty reduction. Evidence suggests that entrepreneurship grows
when unemployment rises12 , all other things remaining equal. While unemployment in Trinidad and
Tobago during 2012 was contained at an average of 4.8 per cent,13 it may be reduced further by the
creation of adequate structures to foster successful MSEs. The “Seven Interconnected Pillars for
Sustainable Development” (See Appendix II) include “[a] more diversified, knowledge intensive
economy – building on the native genius of our people” (pillar 5) and “Poverty eradication and social
10
See Appendix II: Seven Interconnected Pillars for Sustainable Development
All statistics based upon CSO data for 2010.
12
The Dynamic Relationship between Entrepreneurship, Unemployment, and Growth: Evidence from U.S.
Industries by the United States of America's Small Business Administration ( SBA), 2012, ..."entrepreneurship
dampens unemployment, but unemployment spurs entrepreneurship.." “Entrepreneurship has been suggested as
a remedy against high unemployment and stagnant economic growth.” (European Commission, 2003; Carree and
Thurik, 2003; Thurik et al., 2008). From The relationship between Entrepreneurship and Unemployment in Japan,
published by the Max Planck Institute of Economics Group Entrepreneurship, Growth and Public Policy, André van
Stel (EIM Business and Policy Research), Roy Thurik (Erasmus School of Economics , Erasmus University Rotterdam,
EIM Business and Policy Research) and Lendert Baljeu Erasmus School of Economics, Erasmus University
Rotterdam).
13
Central Bank Annual Economic Survey, second quarter 2012
11
19
justice, preference for the poor and disadvantaged” (pillar 2).14 The Medium Term Policy Framework
goes on to recognise the need to provide support for viable and innovative MSEs for economic
diversification and the development of MSEs as a vehicle to reduce poverty by creating employment.
B.3 Public Sector Programmes for MSE Development
The GORTT has engaged in several projects and programmes aimed at supporting business in Trinidad
and Tobago. While several of these emerge from the MOLSMED and address the MSE sector specifically,
other projects and programmes are broader and apply to the wider business community. Additionally,
there are initiatives headed by other Ministries, which are also geared at encouraging entrepreneurial
development.
The Community Development Fund, Ministry of Community Development (MCD)
The Community Development Fund (CDF) is a funding source operating out of the Ministry of
Community Development (MCD). The CDF was founded in 1996 by the GORTT under a loan agreement
with the Inter-American Development Bank (IADB). It operates as a basket of grant funding products
meant for various forms of poverty alleviation and for promoting community self-sufficiency. Two (2)
products provide funding for projects of three (3) to eighteen (18) months’ duration while another seeks
partnership with private sector sponsors. Community business projects are also considered in the CDF
model. Moreover, the model contains a business and social enterprise mentorship element which has
been able to attract a small pool of approximately 20 mentors.15
Green Fund, Ministry of the Environment and Water Resources (MEWR)
The Green Fund is the National Environmental Fund of Trinidad and Tobago, established under the
Finance Act 2000 through the Miscellaneous Taxes Act. The purpose of the fund is to provide financial
assistance to community groups and organizations to undertake activities and projects related to
reforestation, remediation, environmental education and public awareness of environmental issues and
conservation of the environment. The Green Fund is capitalised through the Green Fund Levy which is a
tax of 0.01 per cent on the gross sales or receipts of companies carrying out business in Trinidad and
Tobago. The Green Fund Levy is payable quarterly in each year of income. As at September 30, 2011 the
Green Fund stood at $2.60 billion. 16
Innovation Fund, Ministry of Planning and Sustainable Development (MPSD)
The GORTT has identified a need to provide financial support to entrepreneurs with original business
ideas with the potential to deliver new or improved products and services and address social needs. To
this end, the Government has established the Innovation Financing Facility (IFF) to support investments
in projects that have the potential to transform research into economic value. As part of this initiative,
14
See Appendix for the Seven Interconnected Pillars for Sustainable Development.
Information obtained directly from the CDF.
16
The Green Fund: A presentation to EMA’s Business Forum and “A Look into the Green Fund” by Express
Newspaper, October 5th, 2012.
15
20
the “Call for Innovations and Inventions” (or i2i) was launched in 2012 as a competition for innovators
and inventors in key economic growth sectors.
Research and Development Fund, Business Development Company (BDC) and Ministry of Trade,
Investment and Industry (MTII)
The Research and Development Fund (RDF), managed by the Business Development Company (BDC) of
the Ministry of Trade, Investment and Industry (MTII), is designed to provide support for research,
development and technological innovation at all stages of company development. The Facility is geared
towards enabling companies to progress from undertaking an initial research project to high level
innovation and Research and Development activity. It serves to encourage the development of an
innovative business culture among local businesses with the aim of increasing the rate of new product
development. As the RDF falls under the purview of the MTII, it focuses upon medium and large
enterprises and not micro and small businesses.
B.4 Ministry of Labour Small and Micro Enterprise Development
The MOLSMED oversees the development of the MSE sector through the Enterprise Development
Division (EDD), which was established in 2002. In the area of small business development, the Ministry’s
implementation agency is the National Entrepreneurship Development Company Limited (NEDCO). Over
the past year, through the EDD, the MOLSMED has implemented two (2) programmes and has begun
work on establishing policies and additional programmes to support the MSE sector.
NEDCO - National Entrepreneurship Development Company Limited
The National Entrepreneurship Development Company Limited (NEDCO) was established in August 2002
as a limited liability state-owned organisation, mandated to be the implementing agency for
Government’s policies and programmes for small and micro enterprise development. NEDCO’s focus
encompasses a holistic approach to business support and includes training and empowerment of the
entrepreneur as well as financing. As such, NEDCO provides services such as loan funding, business
training, business advisory, promotional support.
National Integrated Business Incubator System (IBIS)
The National Integrated Business Incubation System (IBIS) aims to provide a unique mix of business
development support, infrastructure and operational and financial support to assist the growth and
success of new and existing MSEs. Specifically, IBIS assists MSEs by providing assistance in the areas of
mentoring, infrastructural support, information technology, operational support, financing in the form
of seed capital, and networking advice for access to local and foreign markets. Cabinet granted approval
for IBIS in August, 2011 and the project was launched in October 2011. The National Entrepreneurship
Development Company Limited (NEDCO) is responsible for implementing IBIS. IBIS incubators may be
community-based or commercial. Community-based incubators operate in communities or regions
where socioeconomic needs, such as poverty and unemployment, may be addressed by business
formation. Commercial business incubators focus upon high-value and/or high volume businesses that
often have export potential. IBIS has partnered with academic and research institutions to develop
innovation policies to proactively attract entrepreneurs to translate their business ideas into reality. At
present, the IBIS launched four (4) community-based incubators in regions throughout Trinidad. Three
21
(3) additional commercial incubators are carded for Trinidad and Tobago in fiscal year 2013. A total of
eighteen incubators is planned for the country.
The FairShare Programme
The FairShare Programme is a set-aside programme that enables MSEs to access opportunities to do
work with the Government for contracts valued up to $1 million to MSEs. Simultaneously, the FairShare
Programme provides some training to MSEs to improve business management, use of technology and
understanding of legal obligations. FairShare utilises an online platform where Government Ministries
post opportunities and where MSEs search for and bid on those opportunities. The FairShare
Programme was launched in January 2011.
The objective of the FairShare Programme is to create independent and strong MSEs by allowing MSEs
to participate in Government spending over a fixed period of time, over which period they should have
increased their capacity, skill, product quality and other capabilities. Additionally, the FairShare
programme:






Is an incentive for formalisation because it is only open to registered MSEs, compliant with
state regulations
Compiles an online registry of micro and small businesses categorised by economic sector
Creates a real-time, online listing of all Ministry contracts worth up to a maximum of
$1,000,000
Provides automated notification of opportunities to MSEs for the purpose of bidding
Provides a space for MSEs to market their products and services through online profiles
Offers training to MSEs in procurement, business management and other important areas of
relevance to improve their ability to win contracts
MSEs can be registered with the FairShare programme for 2-year cycles up to a maximum of 6 years. As
such, the FairShare Programme is a temporary support offered by the Government to MSEs.
The National MSE Baseline Survey
The National MSE Baseline Survey is a survey of formal and informal MSEs. It aims at providing baseline
data on the MSE sector, obtaining feedback on interventions and establishing metrics by which to
measure the impact of future policies, programmes and adjustments to policies and programmes. It is
the basis for other future surveys. The baseline survey was launched in 2012 and will be completed in
2013.
22
C.
Goal, Objectives and Principles
C.1. Goal
The goal of the National Micro and Small Enterprise Policy is to create a facilitative environment for
MSEs so that they can contribute significantly to economic diversification and wealth creation.
C.2. Objectives
The specific MSE Objectives of Policy are:
1.
2.
3.
4.
5.
6.
To create opportunities and reduce obstacles for MSE entrepreneurship.
To reduce the barriers between formal and informal sectors.
To apportion equitable treatment to MSEs as to that of medium and large enterprises.
To expand opportunities for MSEs to access financial and business development support.
To improve the national and international market network for MSEs.
To encourage productive and innovative MSEs in the interest of economic diversification and wealth
creation.
It is expected that an entrepreneurial culture will fuel the drive for innovative business development,
which subsequently will stimulate employment, diversification and successful business growth.
C.3. Principles
The overarching policy seeks to improve the quality and quantity of MSEs’ by creating an environment
characterised by well articulated and harmonised policies and programmes within the guidelines of
Decent Work. In all its interactions, the MOLSMED will operate according to and seek to propagate the
principles of:
1. Advanced technology
The application of information technology to simplify production, operation and marketing systems
(including payment systems), in order to improve efficiency, productivity and flexibility within the MSE
sector.
2. Alliances
Alliances with stakeholder partners from the public, private and non-Governmental organisation (NGO)
sectors will be encouraged to advance enterprise development for MSEs. Service provider Coordination:
Integration of the services provided by the private sector, including financial services, training,
diagnostics, information technology and modernisation and specialist services to assist with MSE
development. Inter-ministerial cooperation refers to the co-involvement of various Government
agencies with one other and with the private sector wherever possible to accomplish the
aforementioned goal and objectives.
3. Corporate Social Responsibility (CSR)
23
The encouragement of socially responsible actions, processes, products and services in MSEs
organizational culture. CSR thrusts will adhere to the United Nations Global Compact, and will channel
resources to productive and effective programmes that support enterprise development.
4. Equality and Equity
Absence of discrimination, consistent with the Decent Work Agenda; and the use of mainstreaming
techniques to recognise and support vulnerable groups and gender disparities, thus providing greater
opportunities for the empowerment of all groups and sectors, particularly those that are more
vulnerable.
5. Information Availability
The management of information to MSEs and on MSEs to improve knowledge of the sector and hence
facilitate more effective decision-making by all stakeholders involved in improving the functioning of the
MSE sector.
6. Innovation
The National Micro and Small Enterprise Policy will embrace a greater number of higher valuegenerating and innovative businesses. Innovation in this context is not limited to science and
technology, but also extends to the creation and/or improvement of a new product, service, business
process or system that will support sustainable social benefits and/or economic returns.
7. Integration
Integration of the MSE sector into the social and economic fabric of Trinidad and Tobago society so that
entrepreneurship can be seen as a viable and credible avenue of employment and wealth creation.
8. Respect for the Environment
The promotion of “green” enterprise and the inculcation of “greenness” into programmes wherever
possible, by utilising green technologies and renewable resources thus creating new business
opportunities for MSEs.
9. Support for the Entrepreneurial Spirit
The implementation of wide-ranging support for entrepreneurship and entrepreneur through training
and development, which will ensure the transformation of ideas into high value creating businesses
derived from the indigenous resources and talents available in Trinidad and Tobago.
10. Sustainability
The initiatives included in the policy emphasise value creation, thus increasing the capability and
competitiveness of MSEs and their support agencies, resulting in support for their long term viability and
less dependence on Government involvement.
24
D. Policy Areas
MSEs and Entrepreneurship in Trinidad and Tobago
Given the economic and social importance of MSEs to Trinidad and Tobago, and having identified
obstacles faced by MSEs, the MSE Policy will focus on formalizing, strengthening, supporting and
empowering the sector through specific Policy Areas. The Policy Areas were selected based on
international best practices, shown in Appendix III. As such, the MSE Policy addresses the concerns of
MSEs within four (4) areas: Business environment; Financing; Business Development and Support
Services; and Governance Advocacy. Each of these has been divided into several sub-categories as
follows:
C.1 Business
Environment
C.2. Financing
C.4. Governance and
Advocacy
Public sector financing
C.3. Business
Development and
Support Services
Information availability
Definition of MSEs
Government
bureaucracy and
licensing
Private sector financing
Standard Setting
Advocacy systems
Market access
Incentives
Innovation
Taxation
Formal Education
Quality of information
Mentorship Network
Governance structure
Green Enterprises
Physical Infrastructure
Public-Private Partnerships
25
D.1 Business Environment
D.1.1 Definition of MSEs
D.1.1.1 Current Situation
The current definition of MSEs has been in existence since 2002.17 The definition used to date does not
address the need for revisions based upon the changing value of money due to inflation and the
changing structure of small businesses whereby a single individual utilising the internet can generate
millions of dollars. The definition of MSEs is important to ensuring that the national support mechanism
provided to small businesses meets the needs of the sector.
D.1.1.2 Objectives of Policy Area
(i)
(ii)
(iii)
(iv)
To develop and operationalise a national definition for Trinidad and Tobago’s micro and small
enterprises that is up-date, relevant and subject to periodic revision to suit the development
needs of Trinidad and Tobago.
To enable revisions to the definition of MSEs over time to address inflation, the changing
structure of small businesses, changes in the international, regional and local business
environments and national development priorities.
To channel Government policies to target those specific micro and small enterprises that
require support.
To direct MSEs to access support services and benefits available to the sector.
D.1.1.3 Recommendations and Actions
The definition of MSEs is hereby determined by the structure (employee and asset value) and its
ownership. Recognitions will also be provided for MSEs’ quality, where quality refers to separate metrics
of management and operational standards and to product/service quality.
A. Structure
(i) The definition of a qualified micro and small enterprise (MSE) will now consider:
(a) The number of employees including the owner/manager
(b) The asset value
(c) Turnover
This change is made in response to the developments regarding the structure of business whereby MSEs
can generate very high sales’ levels.
17
Micro enterprises: 1-5 employees, including the owner/manager; assets up to $250,000 and sales turnover up to
$250,000. Small enterprises: 6-25 employees, including the owner/manager; assets up to $1,500,000 and sales
turnover up to $5,000,000.
26
Size of enterprise
Number of Employees
Asset Value18
Turnover
Mini-micro
≤ 1 including owner/manager
Up to $100,000
Up to $250,000
Micro
≤ 5 including owner/manager
$100,001 - $500,000
Up to $2,000,000
Small
≤25 including owner/manager
$500,001 - $5,000,000
Up to $10,000,000
MSEs must meet at least two (2) of the stated criteria and must also meet the owner-manager criterion.
(ii) These basic criteria will be reviewed on a periodic basis to account for:
a.
Changes in inflation;
b.
Changes in the structure of small businesses;
c.
Relevant international, regional and local trends;
d.
National development priorities.
(iii) Enterprises which meet the MSE criteria, and which are owned by MSEs, will be considered MSEs
where the cumulative number of employees, the cumulative value of assets and turnover value meet
the above criteria.
B. Small Business Certification
(i)
Eligibility
The MOLSMED introduces Small Business Certification. A Small Business Certificate will serve as
validation of those enterprises that:
a.
Meet the MSE criteria (number of employees, value of assets, revenue)
b.
Comply with legislative tax and reporting requirements
c.
Are owned at least 51 per cent by residents of Trinidad and Tobago over 18 years of age
d.
Are compliant with Government regulations;
e.
Are compliant with industry-specific, licences and permits are necessary for operation
(See Appendix V);
f.
Is not owned by a large or medium enterprise.
(ii)
Benefits
a. The benefits of Certified Small Businesses will match those of the Approved Small Business
status (See Appendix IV)19. Currently, this certification process is managed by the Ministry
of Trade, Industry and Investment (MTII). It is proposed that MOLSMED will assume this
responsibility.
18
Asset values exclude land and buildings.
The new certification will differ from the existing one in that it will accommodate enterprises whose employee
number is less than 5 as well as sole traders.
19
27
b. Also, Small Business Certification will benefit from a tax credit equivalent to 25% of their
chargeable profits for a period of 5 years, during which time the small business must be in
compliance with the aforementioned requirements.
c. Additionally, these MSEs will benefit from:
 Annual filing of corporate and income tax returns when sales do not exceed $500,000
on a quarterly basis (i.e. as a micro business);
 Annual filing of VAT returns when sales do not exceed $250,000 on a quarterly basis (i.e.
as a mini-micro business), and quarterly filing when sales do not exceed $500,000 on a
quarterly basis (i.e. as a micro business). This will not preclude the filing of monthly
returns by said organizations that may do so if, for example, VAT credits are due to the
company.
d. The Certified Small Businesses will automatically enroll into the FairShare Programme
(subject to the Fair Share certification requirements), as well as make them eligible for
inclusion into the IBIS programme (subject to IBIS client selection requirements).
C.
Exceptional Provision of Small Business certification to other businesses
The Minister, MOLSMED may change the eligibility criteria in order to advance affirmative development
initiatives, for example, of specific sectors, communities, or other target groups. The criteria will apply
specifically to the targeted businesses only and will be defined for a finite period.
D1.2 Government Bureaucracy and Licensing
D.1.2.1 Current Situation
MOLSMED is committed to improving the ease of doing business in Trinidad and Tobago. Presently,
entrepreneurs must undergo a lengthy process of registration at various Government entities - Legal
Affairs, Board of Inland Revenue (BIR) – which tends to discourage business initiation. On average the
complete business registration process takes forty-three (43) days in Trinidad and Tobago, but only
twelve (12) days in developed nations. 20 Both the fear of taxation and elements of Government
bureaucracy have contributed to the high level of informality in the MSE sector. As such, this
registration process must be refined and streamlined to promote MSE development. Some
improvements have been made by MTII with the implementation of TTBizLink, and work will continue in
collaboration with this Ministry to further address these issues.
D.1.2.2 Objectives of Policy Area
The Policy seeks to streamline all Government processes related to:
i)
ii)
20
information sharing
business start-up and closure
International Finance Company (IFC) World Bank “Doing Business Report” 2011
28
iii)
iv)
management and periodic reporting
report processing
D.1.2.3 Recommendations and Actions
A.
Shared Data and Information
MOLSMED will create an online directory (portal) of all registered MSEs that have been certified by
MOLSMED above [D.1.1.3 (B)]. This will allow easy access to the public seeking MSE services.
The portal will represent:
(iii) An online portal of information on registered MSEs as a means of sharing information on the
MSE sector.
(iv) A networking mechanism that connects MSEs to the public that will demand its goods as well as
service providers that will advance the MSE sector.
B.
Simplification of Business Procedures
MOLSMED commits itself to work with the appropriate Government agencies to simplify business
procedures for registered and Certified MSEs. These procedures will include but not be limited to:




Simplifying and providing information on the statutory and tax reporting requirements for MSEs;
Simplifying and providing information on certification processes;
Simplifying processes for starting and terminating businesses;
Use of computer technology (paperless transactions) in all business procedures by relevant
Ministries.
D1.3 Market Access
D.1.3.1 Current Situation
One of the chief problems of MSEs is access to domestic, regional and international markets. In the
Trinidad and Tobago context, this is largely due to the fact that there is a lack of information both on (i)
market opportunities (demand side) and (ii) services offered from MSEs (supply side). Other
impediments to domestic and international market access include information shortfalls, unsuitable
locations, inadequate marketing systems, lack of infrastructure and lack of ICT. With respect to exports
specifically, the chief challenges are:


The absence of market intelligence;
The absence of information on the requirements for penetrating specific export markets;
29

The need for strengthening institutional capacity to ensure a move toward higher local
standards being applied to local products to make them compatible with international
requirements/standards, from inception, which facilitate easier access to export markets.
At present, the MTII is spearheading the development of an Export Strategy for Trinidad and Tobago.
Consequently, MTII has identified the sectors21as principal diversification agents, including:
1.
2.
3.
4.
5.
Film
Music and Entertainment
Seafood
Printing and Packaging
Food and Beverage
As MSE exports are a component of the body of national exports, the MSE policy will be harmonized
with the proposed National Export Strategy for Trinidad and Tobago. Issues that will be considered for
MSEs in this strategy include training and re-skilling, decent work standards, related export potential to
foreign markets, and export capability of MSEs (quality of products/ standards, marketing and
packaging, capacity to produce sufficiently to meet demand).
D.1.3.2 Objectives of Policy
(i) To create visible fora where the goods and services of MSEs can be showcased nationally,
regionally and internationally;
(ii) To encourage the involvement of certified MSEs in designated enterprise zones that can create
centralised market centres;
(iii) To improve the quality of market information, especially regarding export opportunities for
MSEs.;
(iv) Establish relationships within the diaspora through diplomatic centres to create networking
opportunities for MSEs.
D.1.3.3 Recommendations and Actions
Domestic Market Access
Facilitation of Market Entry
a) The full operation of the public procurement
system (FairShare Programme) to include all
Ministries and Government agencies and
approved private companies.
b) Assitance to certified MSEs to showcase the
goods and services online
International Market Access
MOLSMED will maintain a register of
international trade fairs where MSE
groups can showcase their products and
services. Furthermore, MOLSMED will
partner with the Ministry of Trade,
21
Adopted from Ministry of Trade, Industry and Investment: Business Development Directorate via
http://www.tradeind.gov.tt/Aboutus/Divisions/BusinessDevelopment/Activities/BusinessSectors.aspx
30
c) The use of trade fairs and promotional events to
showcase the goods and services of certified
MSEs.
d) The creation of mobile market-places for putting
MSE service and products in the presence of
potential buyers.
Improvement of locations and market presence
MOLSMED will spearhead the identification of
suitable geographic locations and the formation of
clusters in specific sectors to address location
challenges of MSEs. The MOLSMED will also
undertake measures to support domestic market
presence for MSEs, including the creation of
enterprise zones that can serve as centralised
market centres (outlet mall concept).
Improvement of information quality
MOLSMED will ensure the strengthening of
information channels and the improvement of
information provided to MSEs, particularly through
the use of ICTs.
Industry and Investment (MTII) and the
Ministry of Foreign Affairs (MFA) to
create Trade Facilitation Offices for
information gathering, dissemination
and networking for facilitating MSEs’
international market access.
The MOLSMED will partner with the MTII
to create an online shopping mall for
domestic MSEs’ goods and services.
The MOLSMED will partner with the
MTII, the MFA and other relevant
Ministries to improve the quality of
information on international standards
for penetrating foreign markets as well
as information on training for achieving
said standards (see section on Business
Development and Supporting Services).
31
D.2 Financing
D.2.1
Current Situation
Despite the growth in the variety of funding services available in Trinidad and Tobago, financing remains
a major challenge of the MSE sector. The financial services sector has remained largely unresponsive to
the financial needs of MSEs as evident in the limited presence of, for example, receivables and supplychain financing for MSEs. Particularly for new ventures, informal lending networks continue to
dominate the system, but these sources are often inadequate in terms of quantity, price and availability.
Additionally, due to the perceived high-risk nature of MSEs and risk-aversion of financial institutions,
MSEs often face higher-than-normal market rates. The perception of high risk is often linked to the
informality of the majority of enterprises in the MSE sector. Consequently, the majority of MSEs resort
to personal financing and informal funding networks for start-up and growth.
Specifically, problems that must be solved in order to create an effective financing system for MSEs are:
(i) A general lack of information on the financial service providers and the product options
available for financing MSEs;
(ii) Low level of product diversity among the suppliers of funds for start-up MSEs;
(iii) Lack of literacy among MSE owners, particularly in the informal sector, regarding the use
financing options;
(iv) Insufficient volumes of risk capital available to support investment in MSEs due to exclusion of
the private sector in MSE financing;
(v) Weak coordination between Government services in the area of financial support for MSEs; and
(vi) A tax structure that does not support investments in MSEs.
At present, only MSEs generating above $360,000 must pay value-added taxes (VAT). However, there
are tax incentives for specific enterprises and activities operating within certain industries (see Appendix
VIII for the full list of incentives for selected industries). While these incentives apply to MSEs, they are
not specific to them and their needs. Additionally, the incentives are largely unknown to the wider
public, inclusive of the MSEs to whom they apply.
D.2.2
Objectives of Policy
(i)
(ii)
(iii)
(iv)
To increase the options and financing avenues available to MSEs;
To improve the flow and quality of information between demanders and suppliers of funds;
To incentivise private sector and individuals’ interest in financing MSEs;
To create a simple system of tax incentives that supports MSEs with a particular emphasis upon
potentially innovative and internationally competitive MSEs; and
(v) To improve information accessibility regarding the taxation support afforded to MSEs.
D.2.3
Recommendations and Actions
I.
Expanding financing options
32
a. Public sector
(i)
Expansion of the funding options employed by NEDCO: the MOLSMED will seek to
expand the offer of financial products offered by NEDCO, with special emphasis upon
risk capital, factoring (discounted bills) and other working capital financing products, as
well as leasing. NEDCO’s collateral may include current assets including inventory,
receivables as well as intangible assets (such as patents and intellectual property).
(ii)
Improvement of access to Government funding programmes to Certified MSEs,
including:
 Green Fund – expand access by MSEs based on criteria established by Green
Enterprises Policy (to be developed in collaboration with MEWR).
 Innovation Fund – continue to support MSEs with innovative projects (in
collaboration with MPSD).
 Research and Development Fund – remove limit on company’s age: all projects
that have credible Research and Development opportunities should be funded.
(iii)
Funding of public/private sector partnerships developed by agencies and programmes
that assist MSEs.
b. Private sector
Seek MSE financing through capital investors, financial co-operatives, and banks and other commercial
lenders.
(i)
(ii)
(iii)
(iv)
2.
Capital investors (including risk and angel investors): Stimulate the pooling of financial
resources from risk capital investors by collaborating with Trinidad and Tobago Chamber
of Industry and Commerce, NEDCO, the Venture Capital Incentive Programme and other
Ministries to expand the network of risk capitalists available to MSEs, including angel
investors.
Financial Co-operatives: Collaborate with the Co-operative Development Division (CDD)
to create financial products tailored to the needs of MSEs.
Corporate Social Responsibility in Financing of MSEs: Encourage corporate social
responsibility (CSR) from large and medium enterprises to support MSEs and
entrepreneurship in a sustainable manner.
Stock Market. Another area to be developed is the MSE access to the stock market.
Efforts will be made to increase accessibility so that MSEs – and particularly small
businesses with high growth potential – will have access to the capital they need to
expland.
Incentives
The private sector will be incentivised to financially support MSEs through:
(i)
Exploring incentives to support MSE financing activities via a system of tax credit to encourage
the said financing. Incentives will include an increase the tax rebate currently available to risk
33
capitalists and the inclusion of tax credits to businesses for placements of risk capital
investments in MSEs.22
Proposing tax credits to encourage companies to engage in CSR activities directed towards
stimulating MSE development.
(ii)
3.
Taxation
(i)
New and supplemental tax incentives will be proposed in consultation with Ministry of Planning
and Sustainable Development (MPSD) and Ministry of Finance and the Economy (MFE) to
encourage entrepreneurship and innovation. Only those businesses certified through the Small
Business Certification process will benefit from these incentives.
MSEs certified under FairShare will benefit from a tax credit calculated on its Fair Share Revenue
(percentage to be determined in consultation with MPSD and MFE).
(ii)
4.
Quality of information
The MOLSMED will improve the quality of financial information and incentives to and on MSEs via:
(i)
(ii)
22
Collaboration with other Government agencies to create comprehensive information on
funding opportunities available to MSEs.
Promotion of programmes that utilise independent MSE ratings for improving the quality of
information between MSEs and commercial lenders, to help MSEs obtain fairly priced credit.
At present, only individuals benefit from tax credits from investments in venture capital.
34
D.3 Business Development and Support Services
D.3.1
Current Situation
This section focuses on addressing the need for training and skills development in critical business
related areas such as financial management, marketing and organizational development, which affect
MSEs’ ability to achieve optimal profitability.
There is a wide range of support services available to MSEs in Trinidad and Tobago. However, as in the
case of MSE financing, there is little information on what these sources of support are and how they
may be accessed. A number of agencies provide technical assistance23, and a wide range of other
businesses (which are typically MSEs as well) offer accounting support, marketing support, among other
services. Several challenges have been identified as affecting the supply and demand for business
development and support services. These include:
(i) The lack of information on the services available and the sector’s needs result in a mismatch
between services offered and those demanded;
(ii) The absence of a standardised product and service quality, and a lack of an objective standard of
certification as well as the inability to determine effectiveness of such services
(iii) The low levels of innovation and entrepreneurship;
(iv) Entrepreneurship in the formal education system;
(v) Limited use of advanced technology; and
(vi) Inadequate and insufficient physical facilities for MSEs.
D.3.2
Objectives of Policy
(i)
To improve the access to information of the business development services available. (See
C1.2 : Business Environment –Shared data and information);
(ii)
To encourage high operational and management standards so that MSEs will maintain high
productivity and product and service quality;
(iii) To encourage accreditation within professional organizations;
(iv) To spread a holistic awareness of small businesses, business ownership and innovation in the
formal education system;
(v)
To facilitate a mentoring network;
23
Entrepreneurial Training Institute and Incubation Centre (ETIIC), Small Enterprising Business Association of
Trinidad and Tobago Co-operative Society, Business Development Unit (Tobago House of Assembly), Youth
Training and Employment Partnership Programme (YTEPP), Export Centres Company Ltd, the Caribbean Industrial
Research Institute (CARIRI), IBIS and the Trinidad and Tobago Bureau of Standards (TTBS), NIHERST.
35
(vi) To encourage green entrepreneurship;
(vii) To improve the use of technology within the MSE sector;
(viii) To assist with the provision of physical facilities.
D.3.3
Recommendations and Actions
1. Information availability
MOLSMED will encourage the structured registration of all MSE support services provided by public and
private sector agencies. These will be recorded in the MOLSMED online MSE portal (See C1.2: Business
Environment - Shared data and information). Only organizations recognized by professional bodies or
the National Training Agency or any other statutory authority will be included in the portal.
2. Standard Setting
2.1 Certification of service providers
MOLSMED will partner with the Accreditation Council of Trinidad and Tobago (ACTT), the TTBS, Ministry
of Tertiary Education and Skills Training (TEST) and the National Training Agency (NTA) to certify service
providers and their training programmes.
2.2 MSE Standards Training
MOLSMED will support standards training for MSEs along two lines, namely:
(i) Management and operational standards 24 : MOLSMED will partner with accredited training
institutions to support this initiative.
(ii) Product and Service quality standards: MOLSMED will collaborate with TTBS and the relevant
Ministries support product and service quality standards training and support for MSEs.
3. Innovation
MOLSMED will champion innovation within the MSE sector:
a. The widespread adoption of existing technologies to improve the productive efficiency in the
MSE sector.
b. The creation of new methods and technologies - the encouragement of new intellectual
property in processes, products and services through providing suitable funding to support
these incentives.
c. Information and Communication Technology (ICT): the general adoption of ICTs specifically to
improve the efficient operation of MSEs.
d. “Green” innovation: innovation which will have a positive net effect upon the environment
and/or encourage the adoption of environmentally friendly and sustainable practices in the MSE
sector.
24
The “Trinidad and Tobago Standard for good Management Practices for MSEs”, scheduled for launch in 2013.
36
In order to accomplish the aforementioned, the MOLSMED will support the creation of an Innovation
Network to improve the innovative capacity of MSEs. The Network will depend on collaboration with the
Council for Competitiveness and Innovation (CCI), CARIRI, Metal Industries Company Limited (MIC), TTBS
and the Intellectual Property Office of the MLA to create an environment of innovation and respect for
intellectual property within the MSE sector.
4. Formal Education
MOLSMED will seek partnerships with the MTII, the Ministry of Education (MOE), Ministry of Tertiary
Education of Skills Training (TEST), National Training Agency (NTA) and others to integrate
entrepreneurship and innovation as a component of the education curriculum from primary to tertiary
education. The fundamental purpose of altering the education curriculum to incorporate
entrepreneurship as a core element is to foster a culture of risk-taking, creativity, resourcefulness and
innovation
5. Mentorship Network
MOLSMED will support the creation and utilisation of mentor systems - which will linked to NEDCO and
IBIS - in order to support MSEs to achieve their business goals and improve operations. The network will
also encompass regional and international mentors and similar support networks that already exist.
6. Green Enterprises
Green enterprises include eco-tourism, resource and environmental conservation, environmental
costing/pricing/valuating, renewable energy, agro-tourism, alternative use of organic products and
waste, repurposing and recycling of organic and inorganic products and their waste material, where
such activities are profitable or can be made profitable with suitable support. Green businesses also
include environmental activities linked to the physical, cultural or historic national or regional
patrimony. As such the policy seeks to:
(i)
(ii)
(iii)
(iv)
Create new green enterprises;
Support existing businesses whose core activity is economic greening ;
Inculcate green practices among all MSEs;
Create a green certification process for MSEs.
MOLSMED will achieve the above objectives by partnering with the relevant Ministries, Departments
and Agencies to:
(i) Support programmes and enterprises that both improve the expertise and increase the
financing options green enterprises.
(ii) Support viable green businesses in its incubator and public procurement programmes.
(iii) Create green certification and labelling for all companies with a special emphasis upon MSEs.
37
7. Physical Infrastructure
The policy seeks to provide economically priced facilities to MSEs actively involved or poised to be
actively involved in economic diversification. Such facilities will include:
(i)
(ii)
(iii)
(iv)
(v)
ICT infrastructure
Storage facilities
Utilities and Amenities
Shared Assets
Security
MOLSMED will close these gaps in the development of the MSE sector through:
(a) Enterprise zones to support development in targeted communities, based on the
identification and expansion of growth poles.
(b) Affordable accommodation in collaboration with eTecK within its industrial parks.
(c) To encourage private sector to provide physical facilities to MSEs. Such facilities will contain
adequate communications, ICT, control and security infrastructure at reasonable costs.
8. Public-Private Partnerships
MOLSMED will seek to establish a more coordinated process for business development support by
establishing pubic private partnerships in business development that support MSE development. See
Appendix VII.
Support will be afforded to private sector agents involved in:







Financial and in-kind support
Capacity building via education, training and human resource development
Creativity, Design and Innovation
Technology Upgrade
Research and Development
Feasibility studies, market/product validation, commercialisation
Upsizing of existing MSE support operations
MOLSMED will establish the Enterprise Investment Fund as the vehicle to facilitate such cooperation.
D.4 Governance and Advocacy
D.4.1 Governance
D.4.1.1 Current Situation
Governance refers to the oversight and coordination of activities of the MSE sector, including the social
dialogue process and policy formulation.
D.4.1.2 Objectives of Policy
(i) To establish a mechanism for dialogue for the purpose of MSE governance at a national level.
38
(ii) To establish a system for harmonising policies and programmes and make recommendations on
same to ensure that MSEs are not disadvantaged.
D.4.1.3 Recommendations and Actions
1.
Role of the Enterprise Development Division (EDD)
MOLSMED , through the EDD, will continue its mandate of supporting the development of the
MSE sector. EDD will be responsible for development of policies and programmes for the MSE
sector, and will liaise with Government authorities and other stakeholders to ensure that MSEs
are favourably impacted by Government and private sector policies and programmes.
Additionally, EDD will continue to contribute to entrepreneurship development and support
national programmes that focus on encouraging entrepreneurship.
2.
Trinidad and Tobago Micro and Small Enterprise Council
A Trinidad and Tobago Micro and Small Enterprise Council (TTMSEC)25 will be created and will
comprise members of the public and private sectors and civil society including trade unions and
NGOs. TTMSEC will advise on the development of the MSE sector, and provide feedback from the
stakeholder on issues and challenges that need to be addressed by the Ministry, particularly at
the policy level. The Board of the TTMSEC will be appointed by Cabinet and report to the
Minister.
TTMSEC will:
(i) Propose strategic options and priorities for MSE development.
(ii) Provide feedback from the various stakeholders on matters that are being addressed by those
respective agencies that will affect MSE development.
(iii) Propose recommendations to the stakeholders so that their policies will impact favourably on
MSE growth and development.
(iv) Advise on mechanisms that contribute towards the development and harmonization of
policies and programmes that affect MSEs.
(v) Advise on measures to improve MSE developmental institutions, MSE service providers and
the legal and regulatory framework; such measures are intended to strengthen the
effectiveness of MSE policy.
3.
Harmonisation of Policies and Programmes
The policy will ensure that all Ministries, Government agencies and private sector entities involved in
developing policies and programmes for MSEs will advise MOLSMED in order to create a seamless
support system for MSEs.
D.4.2 Advocacy
D.4.2.1 Current Situation
25
Cabinet Minute #585 dated 2010/08/26.
39
Advocacy consists of two-parts: the advocacy unit within the government, and the advocacy agency or
agencies within the MSE sector. The two interface to create a fully functional advocacy system. The
Enterprise Development Division (EDD) within MOLSMED serves as the policy development unit for
MSEs. Therefore, advocacy for the MSE sector is implicit in the EDD’s role as policy developer. At
present, the EDD collaborates with key stakeholders to monitor the MSE sector and function as an
advocate.26 Despite this, there is a need to strengthen the advocacy role within the Government.
D.4.2.2 Objectives of Policy
(i) To empower MOLSMED to act as intermediary and advocate for MSEs.
(ii) To ensure that MSEs are the recipients of fair market conditions by creating a channel for
receipt of MSE concerns, complaints and recommendation to the improvement of the
management of the sector in a structured and organised manner.
D.4.2.3 Policy Actions and Recommendations
MOLSMED proposes to strengthen the EDD and the Labour Inspectorate to advocate for the MSE
sector. The EDD will therefore effectively monitor, adjudicate and assist with the enforcement of MSE
rights, particularly as they interact with other businesses and institutions (public and private).
The EDD will also relate to the Trinidad and Tobago Micro and Small Enterprise Council (TTMSEC), the
Fair Trade Commission (FTC) and the Regulated Industries Commission (RIC) to strengthen its advocacy
functions.
26
The advocacy functions of EDD are not meant to operate as substitutes for core regulatory agencies such as the
Financial Services Ombudsman, the Ombudsman Fair Trade Commission, Regulated Industries Commission, and
the formal appeals process. It is meant to complement these agents.
40
D. Implementation
E.1
1.
MOLMSED
MOLSMED holds responsibility for the implementation of the Micro and Small Enterprise (MSE)
Policy. As such, MOLSMED will lead the implementation of the MSE Policy and monitor and
evaluate each policy action, thereby ensuring that the desired results are produced. The
MOLSMED will join efforts with the mentioned Government and private sector partners trade
unions and NGOs to mobilize resources toward materializing the policy goals and objectives.
The Implementation Strategy will revolve around the following:
a. Partnerships – the coordinated interaction between the MOLSMED, various public and private
entities for achieving the policy goals and objectives.
b. Implementation Plans – this is a series of plans which explain how the specific policy
recommendations within each policy area are to be undertaken, ensuring that policy goals
and objectives are reached. The plans are to be prepared by the EDD and the Task Force.
c. Structures for data collection and analysis - from the inception of the policy, structures will be
developed to facilitate and enhance data collection on the MSE sector and wider economy
with the ultimate goal of determining the economic impact of the policy actions.
d. Monitoring and Evaluation Scheme – a framework for monitoring and evaluating the
implementation plan is incorporated into the Implementation Strategy. Monitoring and
Evaluation is a critical function which follows up and gives feedback on the implementation
initiatives, and determines the effectives of the policy itself.
2.
The Enterprise Development Division will continue to function as the department of MOLSMED
responsible for:
a. governance and advocacy on behalf of the MSE sector as detailed in C.4 above;
b. development of policies and programmes for the sector;
c. implementation of policies and programmes (where determined) of MOLSMED relating to the
MSE sector;
d. oversight of the performance of the National Entrepreneurship Development Company Limited
on behalf of the Minister.
The Division’s organisational structure should reflect the duties and responsibilities outlined
above.
E.2
National Entrepreneurship Development Company Limited
a. The National Entrepreneurship Development Company Limited (NEDCO) will continue to
function as the key implementation agency for the MOLSMED. Its focus will be on:
 Client sustainability
 Organizational effectiveness
 Financial efficiency
41

Value Driven Management
b. In addition to assisting MOLSMED in implementing its programmes, NEDCO will focus on its
core functions including:
i. Investments in micro and small enterprises. Term loans, working capital financing
instruments, risk capital financing. Terms and conditions will be determined by the
Board and management using well accepted credit and risk assessment principles.
ii. Entrepreneurship training. Short courses in key areas of entrepreneurship training,
and any other courses based on MSE needs assessments determined by NEDCO.
iii. Entrepreneurship advisory services. Fee-for-Service business advice and support to
MSEs.
c. NEDCO will continue to seek out options for self sufficiency including sourcing funding and
support from international institutions.
d. NEDCO will be required to price its financial instruments and services and report on its
operations in accordance with internationally accepted credit and risk assessment, and
reporting and accounting standards.
42
E. Conclusion
The Ministry of Labour and Small and Micro Enterprise Development recognises the immense
importance of small and micro enterprises to the development of the national economy and society
and, as such, seeks to facilitate and advance the development of the sector, principally by setting an allembracing, accommodative MSE environment. To guide the multi-faceted process of directing the MSE
sector towards modernisation, innovation and good governance within the context of national
solidarity, the Ministry, through the Enterprise Development Division, has developed a Micro and Small
Enterprise Policy for Trinidad and Tobago. The Micro and Small Enterprise Policy also intends to solidify
the position of Trinidad and Tobago as the centre of premier entrepreneurship and MSE development.
The Micro and Small Enterprise Policy for Trinidad and Tobago provides the framework for the strategic
and effective integration of micro and small enterprises into the formal economic structure of Trinidad
and Tobago, thereby allowing them to access resources and services directed at holistically improving
and supporting them while simultaneously channelling their economic success in the direction of
employment creation, and economic development and diversification. In this regard, the MSE Policy
outlined four (4) broad policy areas, Business Environment, Financing, Business Development and
Support Services and Governance and Advocacy, which reflect the fundamental issues that the policy
will address for the improvement of the sector. The actions to address the issues will be undertaken in
joint efforts with other Government Ministries and the private sector. The success of each action
therefore requires the deep commitment of all the stakeholders.
The Ministry of Labour and Small and Micro Enterprise Development will monitor and evaluate the
implementation process of the policy for the creation and consolidation of a fostering environment
which will ensure that MSEs are supported toward sustainable and profitable operations within the
formal economic sector. Once implemented, the Micro and Small Enterprise Policy will produce a
business environment for Trinidad and Tobago in which MSEs are formalized, productive, sustainable,
and are stable instruments of diversification, development and employment creation.
F. Appendices
Appendix I: Policy Development Methodology
Desk Review - Prior to the consultations the Ministry engaged the Enterprise Development Division in
extensive desk review centred on past studies on the local MSE sector, references to the sector in the
policies and programmes of other ministries, international reports on the MSE sector and reports and
recommendations from multi-lateral organisations such as the United Nations, European Union and
regional development banks.
Consultative Process- The MOLSMED coordinated its efforts of through a Policy Working Committee – an
internal Committee comprising of members of the Enterprise Development Division (EDD), International
Affairs Unit, the Research and Planning Unit and the Legal Department. This was essential to the
inclusion of diverse and comprehensive views on the way forward for MSEs within Trinidad and Tobago
as well as internationally. The Policy Working Committee contributed to the development of the initial
Draft National Micro and Small Enterprise Policy (MSE) for Trinidad and Tobago (2013-2016) by assisting
in the selection of the four (4) priority areas and eighteen (18) sub-areas as nucleus of the MSE policy.27
In keeping with the Ministry’s Decent Work Agenda, the social dialogue process was incorporated as the
medium for the input and exchange of information from key MSE stakeholder groups. These
stakeholders included MSEs, Ministries, public and private sector agencies, international organizations,
community groups and non-Governmental organisations (NGOs). The social dialogue process consisted
of four public consultations between an extensive period of September 2012 – March 201328 in Trinidad.
The division of Finance and Enterprise Development of the Tobago House of Assembly (THA) also
participated in the process. In these consultations, responses were raised by the participants regarding
each priority area of the MSE Policy. These responses reflected the participants’ concerns, interests and
opinions relating to each area, and were recorded and later sorted, analysed and integrated into a table
format. The responses were thus considered in the development of the Policy. In order to complete the
drafting of the National Micro and Small Enterprise Development (MSE) Policy of Trinidad and Tobago,
the policy will be placed on the Ministry of Labour and Small and Micro Enterprise Development’s
website. Written comments will be accepted from the public. The Draft Policy will be reviewed to
ensure alignment with the general public consensus and the Trinidad and Tobago Medium term Policy
Framework (2011-2014).
Quantitative and qualitative review – The participants’ responses were collected, sorted, analysed and
collated under eight (8) policy areas which referred to the four areas used throughout this policy. The
responses were recorded by frequency of response with the more frequently occurring responses and
comments identified as the most significant. These concerns were then integrated into the respective
27
Definition of MSEs, Business Environment, Finance, Business Development and Training, Market Access, Physical
Infrastructure, The Environment and Green Enterprise and, Advocacy and Governance.
28
Tuesday 18th September, 2012 Paria Suites; Thursday 20th September, 2012, Capital Plaza; Friday 21st September,
2012, Capital Plaza (Two Sessions - Morning and Afternoon); Tobago consultation held in April 2013
44
areas of the policy document. Qualitative responses were also included as much as practicable. These
related specifically to the social focus areas and the areas of advocacy and governance.
45
Appendix II: Seven Interconnected Pillars for Sustainable Development
1. People Centred Development – focuses on improving our education system and maintaining a
seamless link for continuous learning.
2. Poverty Eradication and Social Justice – introduces strategies to reduce the income inequality that
exists and provide a social safety net for the poor and vulnerable.
3. National and Personal Security – centres on human security and the maintenance of law and order.
Addressing the social conditions that serve as incubators for criminal activity and the reform of the
prison and justice systems will be critical.
4. Information and Communication Technologies – serves as the backbone which supports our
educated population, maintains effective communication locally and globally and promotes timely
information sharing and management.
5. A More Diversified, Knowledge Intensive Economy – emphasizes the expansion of other productive
sectors in the economy through the continued development of existing sectors and the
establishment of new areas that span the creative, technological and manufacturing sectors.
6. Good Governance – focuses on ensuring transparency, accountability participation and effective
representation through institutional strengthening, enhancing democracy and strengthening
execution and delivery capacity.
7. Foreign Policy – maintains and develops bilateral and multilateral relations ensuring that our foreign
policy supports our objectives for the achievement of sustainable development.
46
Appendix III: Social Areas for MSE Development
Women
Although female participation in various levels and sectors in the occupational environment has
continued to improve progressively29 and despite the upturn in women running businesses, the gender
gap in entrepreneurship remains significant. Statistics for the Americas30 show that even though women
have become increasingly visible in the workplace, their participation is marked by occupational
segregation and gender discrimination. This policy recognises the crucial role of women in enterprise
development and subsequently in boosting the modern economy. As such, the MOLSMED seeks to
create women’s mentoring networks and will partner with groups that address the particular needs of
women entrepreneurs.
It will also measure the performance of women entrepreneurs and provide a platform for discussion on
the trends, prospects and challenges encountered by women entrepreneurs in the business
environment.
Youth
The MSE policy attempts to unleash entrepreneurial potential of the youth by solidifying an
entrepreneurial culture, modifying in the education curricula, creating awareness and providing
effective support through the following:
1. Amendment in primary, secondary and tertiary level curricula to stimulate and reinforce a culture of
entrepreneurship and innovation among youth. This incorporates initiatives such as, an inclusion of
“Entrepreneurship” courses in all professional degree awarding programmes and vocational
institutions.
2. Youth competitions in entrepreneurship
3. Mainstreaming of youth in the IBIS (Integrated Business Incubator System), FairShare, and other
existing youth enterprise development programmes.
4. Collaboration with existing youth business stimulation programmes such as Youth Business Trinidad
and Tobago (YBTT)
5. Public information sessions and fairs in public locations, schools, universities, special institutions and
private and public business.
6. Training and other support services specific to youth
Differently-abled and other people in special circumstances
This group is comprised of individuals who are excluded from the work and wider socioeconomic
environment for reasons such as incarceration, hospitalisation, being differently-abled and having a
status of rehabilitated ex convicts. The MOLSMED recognises that efforts must be made to access these
individuals as they may signify under-represented entrepreneurial potential and labour.
29
As at 2011 in Trinidad and Tobago, the labour force participation rate (ratio of female to male shares) is 0.705,
according to the ACS.
30
The Council of Ministers of Central America (COMMCA)
47
Appendix IV: Policy Areas and International Best Practices
i.
Business Environment
1.1 MSE Definition31
According to the revised European Union 2005 MSME definition, an MSME is classified by the following
three criteria: staff headcount, annual turnover and annual balance sheet.
New 2005 EU Threshold
Enterprise
Category
Headcount: Annual
Work Unit (AWU)
Annual turnover
Annual balance sheet total
Micro
< 10
≤ €2 million
≤ €2 million
(previously not defined)
(previously not defined)
≤ €10 million
≤ €10 million
(in 1996 € 7 million)
(in 1996 €5 million)
≤ €50 million
≤ €43 million
(in 1996 € 40 million)
(in 1996 € 27 million)
Small
Medium-sized
< 50
< 250
a. Bureaucracy and Licensing32
The Government of Singapore uses a business portal called BizFile. BizFile is Accounting and Corporate
Regulatory Authority’s (ACRA) award-winning online filing and information retrieval system. BizFile
offers close to 300 e-services, serving as a one-stop facilitator for businesses. With the integration of eservices comprising of multiple state agencies such as the Singapore Customs, Inland Revenue Authority
of Singapore, Spring Singapore and Singapore Government Network Information Centre, business
owners can now be GST-registered, reserve their web domain name or activate their customs account,
among other business processes. BizFile also allows searches for registered entities, purchase
information, and file business transactions and many other business operations.
31
Details and explanations of the new SME definition which took effect on 1/1/2005 from the Official Journal of
the European Union L 124, p. 36 of 20 May 2003
32
Bizfile Singapore : www.bizfile.gov.sg
48
1.3 Market Access33
As a result of the "Market Access Strategy" for European exporters of 2007, Market Access Teams are
now operational in thirty (30) key export markets. They bring together trade councillors, European
Commission and EU business organisations to closely cooperate to inform each other about trade
barriers and how to tackle them. A study on internationalization of European SMEs was completed,
which is used to guide SMEs wanting enter foreign markets.
The European Union facilitates market access for its MSME sector via the following:
In line with principle ten of the Small Business Act, EU business centres which are geared at helping
the EU MSMEs enter international markets were established in India and China. The centres provide
business support services including matchmaking, market access assistance and guidance on
regulatory issues and Intellectual Property Rights (IPR), among others. The IPR Help Desk in
China has been operational for the last three years.
Within the European Union, the Enterprise Europe Network helps small business to make the most
of the European marketplace by developing businesses in new markets, sourcing and/or
licensing new technologies and accessing EU finance and funding.
ii.
Financing
a. Public sector financing
It is common for the Government to create an agency for meeting the various financial needs of MSEs.
In the case of Singapore, Spring Singapore supplies a wide range of financial services ranging from long
and short-term loans, co-funding with the private sector, angel investment schemes, credit guarantees,
leases, vouchers and grants. The purpose of the financing varies widely depending upon the
development objectives of the government of Singapore, ranging from international trade, establishing
foreign companies in the domestic system, technology support, for intellectual property and brand
strengthening, among others. (See “Assistance Programmes for SMEs” Spring Singapore, 2012). Similar
strategies are employed by the European Union (European Union Support Programmes for SMEs: An
overview of the main funding opportunities available to European SMEs (January 2012)).
b. Private sector financing
Access to Capital Markets34
Jamaica has developed a stock exchange for its SME sector, called the Junior Market. It provides listed
SMEs with a ten (10) year tax incentive, in addition to the equity financing to fund expansion and
33
Adopted from http://ec.europa.eu/enterprise/policies/sme/market-access/internationalisation/index_en.htm
Adopted from http://chamber.org.tt/articles/small-and-medium-sized-enterprises-an-engine-for-growth-intrinidad-and-tobago/
34
49
growth. During the first five (5) years of listing, the companies pay zero corporate tax, while for the
subsequent five (5) years, half of the existing corporate tax rate is charged. From its opening in April
2009 to the end of December 2010, there were eight (8) companies listed, raising just under JMD$1
billion combined and the shares of all eight (8) companies were oversubscribed during the initial public
offering (IPO). It is anticipated that at least 10 more companies would list on the Junior Market during
2011.
Developing private equity /risk (or venture) capital markets35
The Inovar Programme in Brazil, designed in 2001 by Financiadora de Estudos e Projetos (FINEP) in
coordination with the Inter-American Development Bank (IADB), provides funding to strengthen
technological and scientific development in Brazil. The objective of the programme is to support the
development of new SME technology-based companies through the establishment of a venture capital
(VC) market and to enhance private investment in technological businesses. The programme has created
a VC portal with over 2,650 registered entrepreneurs, and over 200 investors. It also established a
Technology Investment Facility where investors can perform joint analyses and due diligence on VC
funds, which resulted in over 50 joint due diligences with approximately USD 165 million
committed/approved in 15 VC funds. The programme has also established 20 venture fora for SMEs to
interact with potential investors and present business plans, resulting in 45 SMEs receiving over USD 1
billion in VC/PE investments.
Funding Facility – European Union (EU) and European Bank for Reconstruction and Development
(EBRD) SME Finance Facility36
The EU and EBRD SME Finance Facility is a regional facility, created in 1999, consisting of EBRD-funded
loans to participating financial intermediaries (banks or leasing companies) to on-lend to eligible SMEs
for their investment needs. EBRD loans are accompanied by comprehensive technical assistance
programmes, and grants funded by the EU aim at developing the capacity of financial institutions to
engage in SME financing on a sustainable basis. As a result, EBRD funds have financed over 100,000
loans, with an average individual loan size of USD 30,000. Technical assistance funds have been used to
train more than 7,300 financial institutions in various business areas (sales, credit analysis, management,
back-office support, etc.)
Factoring (use of working capital)37
In 2005, China embarked upon a reform of its movable collateral framework to encourage financing
against valuable movable assets. Before the reform, use of movable collateral, such as accounts
35
Adopted from G-20 Stocktaking Report, p. 73
Adopted from http://www.ebrd.com/pages/sector/financial/sme.shtml
37
Adopted from G20 Stocktaking Report, 2010; de la Campa, 2010
36
50
receivable, was a key constraint for SME financing, as bank lending was largely based on real estate
collateral, which SMEs typically do not possess. The reform model had three phases: development of the
property law; creation of an electronic registry for accounts receivable and leases; and training of
lenders to use movable assets as a basis for lending. Following China’s reform of a movable collateral
framework and establishment of the receivables registry, SMEs can now use a wider range of assets,
such receivables, to obtain credit. In the three (3) years (2008-2011) of operation of the new system,
lenders have granted more than US$ 1.5 trillion in loans secured with receivables to more than 100,000
businesses, more than half of them being SMEs. The reform of the systems has also led to the
development of the leasing and factoring industries, which have grown substantially over the same time
period.
c. Incentives
In the United Kingdom, institutional and angel investors are considered integral to the economy and this
importance has been recognised by successive governments through a number of tax incentives. The
Durfkapitaal System is one such system that “aims at stimulating third parties to make investments in
start-up MSEs. The loan has to be registered and has to be used for financing assets that are an integral
part of the MSE’s basic assets. It has to be a subordinated loan, so that the money is part of the risk
capital in the company. The private creditor is exempted from tax on the interest received and, if the
loan is not paid back due to bankruptcy or other financial problems of the MSE, the creditor gets [...] tax
compensation up to a maximum of 50,000 Euros (US$66,000).”38
38
https://www.wbginvestmentclimate.org/uploads/Designing_Tax_Systems.pdf
51
d. Taxation
In 2007, the International Finance Corporation (IFC) published “Designing a Tax System for Small
Businesses: Guide for Practitioners”39 as a comprehensive guide for using the tax system to support
MSEs. The document focuses on simplifying the reporting system, the use of VAT, reducing the tax
burdens on weaker MSEs, adequately taxing high-profit MSEs, and supporting private sector investment
in MSEs. In designing an appropriate tax system, the following diagram can be used as a best practice
summary.
e. Quality of Information
This area relates to the improvement in the information made available on and to MSEs, and will be
facilitated by an online information portal. See Section 2 above: Bureaucracy and Licensing on best
practice regarding Singapore’s MSE information portal.
39
https://www.wbginvestmentclimate.org/uploads/Designing_Tax_Systems.pdf
52
iii.
Business Development and Support Services
a. Information Availability
b. Standard Setting
In “Using standards to support growth, competitiveness and innovation” (Guidebook Series), the EU
outlines the use of structured funds to support access to standards within industry. Part of the process
involves the inclusion of businesses (including MSMEs) in creating standards.40 Secondly, the policy
shows that strategies must address various aspects of standards adoption, often focusing upon
information dissemination. This second process encompasses treating with:




insufficient information on standards
knowing what they are
understanding what they are
appreciating the specific benefits that they carry,
A third policy activity deals with strengthening certification or testing bodies. The EU policy also speaks
to the holistic treatment of standards (whether they by formal or informal; voluntary or mandatory
standards; product standards and management standard) and the methods of encouraging the
businesses to become members of associations that assist in the attainment, maintenance and
development of standards.
Such strategies may also be used to support innovation.
c. Innovation
See section 3.2, Standard Setting, and Section 3.4, Formal Education.
d. Formal Education
The EU has begun dealing with entrepreneurship via its formal education system. In “Entrepreneurship
Education: Enabling Teachers as a Critical Success Factor “A report on Teacher Education and Training to
prepare teachers for the challenge of entrepreneurship education”, (November 2011), entrepreneurship
is defined as “an individual's ability to turn ideas into action. It includes creativity, innovation, showing
initiative and risk-taking, as well as the ability to plan and manage projects in order to achieve
objectives. According to the report, the priorities going forward will be:
Improving teacher competences, making sure that teachers possess the necessary pedagogical
skills to teach their own subjects and the transversal key competences, including in
heterogeneous classes and making the best use of ICT;
Improving the quality of Initial Teacher Education (ITE) which should provide a Higher Education
qualification and should balance research-based studies and teaching practice;
40
This feature is also presented in EU industrial Policy as shown on:
http://ec.europa.eu/enterprise/magazine/articles/industrial-policy/article_11051_en.htm
53
Ensuring the quality of teacher educators (teacher trainers) who should have solid practical
teaching experience, good teaching competences and be of a high academic standard; and
Promoting professional values and attitudes in the teaching profession (in which teachers adopt
a culture of reflective practice, undertake autonomous learning, engage with research, and
collaborate extensively with colleagues).
The full report is available at: http://ec.europa.eu/enterprise/policies/sme/promotingentrepreneurship/files/education/teacher_education_for_entrepreneurship_final_report_en.pdf
e. Mentorship Network
UK Government’s financial literacy programme, known as Business Finance Taskforce, and the British
Bankers’ Association have formed a network of retiree volunteers to assist MSEs. The members of the
network will be trained by the independent UK Skills Sector Body for Enterprise and Business Support,
SFEDI. Similar networks from private providers have been in existence in the UK since 2010. The EU has
several networks for special interest MSMEs including women. 41
f.
Green Enterprises42
The International Labour Organisation (ILO) has prioritised green jobs within its Decent Work Agenda.
This initiative recognises that green jobs, in addition to preserving and restoring the environment, are
associated with output that generates greater value added. In order to maximise the impact of greening,
the Organisation has been engaging in retooling existing MSEs, particularly in developing countries, to
operate in a green manner and has been developing opportunities for stimulating the green sector for
its role in employment creation.43
g. Physical Infrastructure
Even where entrepreneurs have access to good education and reasonable finance, locating suitable
industrial space is often a real challenge. Typically, the Network of Business Incubators of America
(NBIA) 44 includes, in its definitions for physical business incubation (as opposed to virtual or on-line
business incubation), shared common spaces and shared business supplies and resources. The New York
City Economic Development Corporation (NYCEDC),45 formed in 2012, has made the provision of
affordable, community-oriented, high-quality spaces for incubated businesses. The Corporation aims to
41
For the UK network of mentors, see http://www.mentorsme.co.uk; for mentors specific to women entrepreneurs
in the EU, see: http://ec.europa.eu/enterprise/policies/sme/promotingentrepreneurship/women/national_contacts_en.htm
42
Adopted from Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World, UNEP/ILO/IOE/ITUC,
September 2008.
43
44
45
http://www.ilo.org/empent/units/green-jobs-programme/lang--en/index.htm
See http://www.nbia.org/resource_library/review_archive/1012_02a.php
http://www.nycedc.com/
54
do this by partnering with academic institutions, commercial landlords, and real estate managers. The
facilities come with basic business services and administrative support. Consequently, one of the
important best-practices linked to business incubation is the provision of physical operating and
manufacturing spaces for MSEs.
h. Public-Private Partnerships (PPPs)
Guidelines for PPPs are identified largely by United Nations Commission for International Trade Law
(UNCITRAL), Public-Private Advisory Facility (PPIAF) and Her Majesty’s Treasury - Public-Private
Partnerships. These emphasise emphasised the use of a special purpose vehicle (SPV) or a project
company representing the interests of the Government and the private sector, empowered to transact
legally without the constraints of either party. PPP financing is always project-based and is “ringfenced” meaning that the PPP is legally and economically self-contained, where private sector investors
receive a return on their investment from the activities of the PPP project. Both the public and private
sector may contribute to the SPV but the public sector seldom seeks competitive financial returns from
the project. The private sector may contribute both debt and equity to the project and expect a
substantial return.
For the evaluation, assessment and selection of projects for PPPs, financial analysis are combined with
economic analysis with the chief difference between both analyses is the inclusion of the value of
externalities (or third party impacts) in the latter analysis. Other important assessments included
environmental impact assessment (EIA), risks analysis, related to the probability of projects performing
above or below expectation and capacity assessment capacity will include commercial, practical,
economic, achievable and theoretical capacity. Certain qualitative analyses are also included. These
included the assessment of the service providers and project proposers in terms of their technical ability
(the ability of the provider to meet to provide the good or service) and the priority of the need
assessment ascribed to the beneficiary of the PPP project in the context of other competing needs.
iv.
Advocacy and Governance
The U.S. Small Business Association of is the independent voice for small business in the Federal
Government and the source of small business statistics. The Advocacy office is the independent voice for
small business within the federal Government and is the watchdog for the Regulatory Flexibility Act
(RFA). The office advances the views and concerns of small business before Congress, the White House,
the federal agencies, the federal courts and state policy makers.46 Brazil is among the more advanced
developing countries where MSE advocacy is concerned.47
46
47
Adopted from http://www.sba.gov/advocacy
Adopted from http://www.sebrae.com.br/
55
The United Nations Global Compact on Good Governance (2005) outlines the need for transparency in
decision-making at the sector level. Applied appropriately the MSE sector, it supports social dialogue as
espoused by the ILO.
Appendix V: Approved Small Company Status
The existing Approved Small Company Status48 was approved in 1995 to be administered by Business
Development Company, under the MTII.
Benefits




Limited Liability Companies can enjoy a tax credit of 25% of their chargeable profits by
obtaining Approved Small Company status through the Business Development Company
(BDC) Ltd.
Financial institutions that grant loans to Approved Small Companies will be entitled to a 10%
tax deduction of the net increase of those loans for the year of income.
Additionally, there is 50% exemption on corporation tax on interest earned on transactions
to Approved Small Companies.
The Approved Small Company Status is valid up to 5 years but renewals are not automatic
and must be requested by companies on an annual basis.
Eligibility
In order to be registered as an Approved Small Company, a Limited Liability Company must:








Be locally owned and controlled;
Not have as a shareholder any other Company holding shares directly or indirectly through its
nominees;
If incorporated after 8th January 1988, not be a result of splitting or reconstruction of an
existing company;
Have machinery, equipment and working capital the total value of which does not exceed
$1,500,000;
Have at least five permanent employees;
Have potential for creating jobs;
Make optimum use of locally produced raw materials;
Operate a system of accounts approved by an accountant who is a member of the Institute of
Chartered Accountants of Trinidad and Tobago.
A Limited Liability Company interested in obtaining Approved Small Company Status should obtain and
complete the Approved Small Company Application Form from any BDC office. Please follow the link at
the bottom of this section for a list of BDC office locations.
48
Adapted from TTCONNECT:
http://www.ttconnect.gov.tt/gortt/portal/ttconnect/Cit_businesspersDetail/?WCM_GLOBAL_CONTEXT=/gortt/wc
m/connect/gortt+web+content/TTConnect/Citizen/Role/ABusinessPerson/GeneralBusinessServices/Approved+Sm
all+Company+Status
56
Application Process
Copies of the following supporting documentation should be attached to the completed application
form:
1. Certificate of Continuance
2. Certificate of Incorporation
3. Sixth Schedule-Form of Annual Return for Company having share capital
4. Notice of Directors (Form 8)
5. Audited Financial Statements for the year of income and an introductory report from auditors
There is a processing fee of $500 for the Approved Small Business Status.
57
Appendix VI: Statutory Licenses/Permits
Sector
Activity
A- Agriculture
01. Crop and animal production
- Farmer ID, Agricultural county office in Ministry of Food Production,
Land and Marine Affairs.
D- Electricity, gas and
air
35. Electricity, gas and air conditioning supply
- The Government Electrical Inspectorate certifies that wiremen
carrying out electrical installations are qualified and capable to
perform such work. Licences are issued to wiremen as verification of
their certification. (Licence to act as a wireman) Ministry of Public
Utilities.
F- Construction
-Must follow Organizational Health and Safety Act.
-Should have a health and safety employee.
-Inspectors only have to do an inspection when there is a complaint;
a letter is given to the organization of the findings which is kept on
file.
G2- Automotive services
45. Repair of motor vehicles and motorcycles
- Permits and inspections required for each aspect of the auto repair
business.
- Open General Licence for importing all goods into Trinidad and
Tobago except the goods listed on the Import Negative List, an
import licence is required for those.
H- Transportation and
storage
49. Land Transport
-A class specific licensed driver
-Vehicles must be licensed and approved based on their purpose.
I- Accommodation and
food services
55. Accommodation
- All places of accommodation (including guesthouses, hotels, bed
and breakfast properties and other self-catering facilities) are
encouraged to have their facilities inspected and registered with the
Tourism Development Company Limited (TDC). This process ensures
that the facilities uphold the minimum standards stipulated by the
TDC and the Ministry of Tourism.
56. Catering, food and beverage service activities
- Liquor licence from the Excise Branch of the Customs and Excise
Division. Types of licences are:
1. A spirit retailer's licence is required for persons or
businesses that wish to sell intoxicating liquor in any
quantity for consumption, either on or off the licensed
premises, at any time of day or night.
2. A wine retailer's licence is required for persons or
businesses wanting to sell only wine or beer in any
quantity for consumption either on or off the licensed
premises, at any time of day or night.
3. A spirit grocer's licence is required for persons or
businesses that wish to sell intoxicating liquor in bottles
only in any amount for consumption away from the
licensed premises, at any time of day or night.
4. A wine merchant's licence is required for persons or
businesses wanting to sell beer and/or wine only for
consumption off the licensed premises only, and in
quantities of not less than 3.4 litres (0.75 gallons) of wine
or 6.8 litres (1.5 gallons) of beer at one time, at any time of
day or night.
Mandatory









58
5.



A spirit dealer's licence is required for persons or
businesses that wish to sell intoxicating liquor for
consumption off the licensed premises only, at any time of
day or night. This licence states that minimum quantities
must be sold as follows:
For rum made in Trinidad and Tobago, not less than 109 litres (24
gallons) contained in one cask, or 6.8 (1.5 gallons) contained in
bottles in one case.
For wine, not less than 3.4 litres (0.75 gallons).
For other intoxicating liquor, not less than 6.8 litres (1.5 gallons) with
the original packages, in which the liquor was imported, unbroken.
6. A night bar licence is required for places that sell spirits to
be consumed on the licensed premises at any time of day
or night.
7. The
hotel
spirit/special
hotel/restaurant/special
restaurant licences are required to sell intoxicating liquor
in any quantity to be consumed on the licensed premises
only, at any time of day or night.
8. The hotel spirit licence is required for places that sell
alcohol to persons lodging at the hotel or having a meal
there.
9. The restaurant licence is required for places that sell
alcohol to persons having a meal at the premises.
10. The special restaurant/special hotel licence is required by
places that sell alcohol to persons whether or not they are lodging at
the premises or having a meal there.
- Food Badge
- Inspection Certificate


J- Information and
communication
58. Printing, publishing, packaging
No licences required
59
60. Programming and broadcasting activities
-Concessions are needed to operate broadcasting networks.
The Authority’s concession classifications are as follows:

Type 1: Network-Only Concession (network-based): Authorises a
concessionaire to own or operate a public telecommunications
network, without the provision of public telecommunications or
broadcasting services.
Type 2: Network-Service Concession (network-based): Authorises a
concessionaire to own or operate a public telecommunications
network in addition to providing public telecommunications services
over that network.
Type 3: Virtual Network-Service Concession (service-based):
Authorises a concessionaire to provide public telecommunications
services, without an authorization to own and/ or operate a physical
public telecommunications network, in a manner that is transparent
to the end user. Such a concession will be required in cases where an
entity has the capability of providing multiple services (e.g. data,
image, voice, video) over a single transmission medium that has
been leased or otherwise obtained from an authorised network
operator.
Type 4: Telecommunications Service Concession (service-based):
Authorises a concessionaire to provide a specific public
telecommunications service(s) without an authorization to own and/
or operate a telecommunications network.
Type 5: Broadcasting Service Concession (service-based): Authorises
a concessionaire to provide a broadcasting service without an
authorization to operate a telecommunications network. An entity
that leases capacity from a telecommunications network operator
and provides subscription-based broadcasting services via that
media, requires a Broadcasting Service concession. However an
entity that supplies programmes or other broadcast content to a
broadcasting service provider does not require a concession.
-A licence is required for the use of any radio transmitting equipment
or for the operation of any radio communication service.
1. A spectrum licence, which authorises the licensee to operate radio
communication systems within a specified frequency band on a
technology neutral basis. Systems for which a spectrum licence will
be required include the following:
a. Public mobile radio systems
b. Private mobile radio systems
c. Trunked mobile radio systems
d. Fixed wireless access systems
2. A station licence, which authorises the licensee to operate the
specified station in accordance with technical parameters
determined by the Authority, which may include: antenna
characteristics, transmitter power, polarisation, frequency, and
60
modulation techniques. A station licence will be required in respect
of the following systems:
a. Amateur stations
b. Maritime stations
c. Satellite stations
d. Broadcast stations
e. General radio communication stations
f. Aeronautical stations
g. Citizen Band (CB) stations
h. Stations for special events
i. Stations for test and development purposes

3. A class licence, which authorises persons to use specific radiocommunication devices within specific technical and operational
parameters, and will generally apply to low-powered mass-market
consumer devices. The Authority will determine the radio devices for
which class licences will apply. These radio devices may include:
a. Alarm Systems
b. Radio transmitting computer peripherals
c. Cordless telephones
d. Radio frequency identification devices
e. Family Radio Service (FRS) systems
f. Wireless end user devices (mobile handsets, pagers etc.)
M- Professional,
scientific and technical
activities
No licence required
N – Administrative and
support service
activities
77. Rental and leasing activities
–Register with Rent Assessment Board

79.Travel agency, tour operator, reservation service and related
activities
– Tour operators will require permits to enter prohibited area
(available during the nesting season)
Permits for the reservation service will vary based on what is
required to be reserved.

80. Security and investigation activities
- Must be licensed to operate as a Security Firm or Protective
Service Agency. The Protective Services Division of the Ministry of
National Security administers the issuing and monitoring of licences.

61
P- Education
85. Education
– To teach at a primary or secondary school in Trinidad and Tobago,
a person must obtain a Teacher's Registration Number.
- All post secondary and tertiary level institutions must register with
ACTT (Certificate of Registration)


Q- Human health and
social work activities
86. Human health activities
- Nursing Council’s Registration Certification
- Medical Practitioner Licence (For Doctors)
- Nursing Homes need to be registered with Ministry of Health



R- Arts, entertainment
and recreation
92. Gambling and betting activities
- Gambling and betting licence from Ministry of Legal Affairs

62
Appendix VII: Enterprise Investment Fund
European Investment Fund (EIF) is the European body specialized in small and medium sized enterprise
(SME) risk financing. The EIF is part of the European Investment Bank group and has a unique
combination of public and private shareholders. It is owned by the EIB (61.9%), the European Union through the European Commission (30%) and a number (25 from 16 countries) of public and private
financial institutions (8.1%). EIF's central mission is to support Europe's SMEs by helping them to access
finance. EIF primarily designs and develops venture capital and guarantees instruments which
specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation,
research and development, entrepreneurship, growth, and employment.
The Multilateral Investment Fund (MIF) is an independent fund administered by the Inter-American
Development Bank (IDB), created in 1993 to support private sector development in Latin America and
the Caribbean. In partnership with business organizations, Governments, and non-Governmental
organizations (NGOs), MIF's stated goal is to provide technical assistance and investments to support
micro and small business growth, build worker skills, and to improve markets and access to finance.
63
Appendix VIII: Overview of Existing Incentives for Local Business
Compiled from the Business Development Company information
SECTOR
GENERAL INVESTMENT INCENTIVE
FILM

Tax exemption for a maximum of 7 years on the profits from an approved tourism
project, which includes the production of international feature films that promote
Trinidad and Tobago.(Tourism Development Act)

Tax deduction of up to 25% on investment in the equity capital of an approved tourism
project. (Income Tax Act)

150% tax rebate up to a maximum of TT$1 million for audio, visual and video production
for the purpose of local education or entertainment or reflecting local culture for radio or
television.( Corporate Tax Act)

Full exemption from Customs Duties on imports of machinery and raw materials
benefiting the tourism sector. (Customs & Excise Act provides)

A foreign investor is allowed to purchase land up to one acre for residential purposes, five
acres for commercial use and up to 30 % of the cumulative shareholding in a public
company. (Foreign Investment Act)
FISH AND FISH
PROCESSING

Full exemption from Customs Duties on imports of machinery, plant, equipment and raw
materials for a major capital investment. (Customs & Excise Act)

A foreign investor is allowed to purchase land up to one acre for residential purposes ,
five acres for commercial use up to 30% of the cumulative shareholding in a public
company.( Foreign Investment Act)

Relief from Value Added-Tax (VAT) on imports for highly capital-intensive enterprises.
(Fiscal Incentives Act)
 Provisions for the waiver of income tax on dividends or other distributions, other than
interest, out of profits derived from the manufacture of Approved products. (Fiscal
Incentives Act)
FOOD AND
BEVERAGE
 Full exemption from Customs Duties on imports of machinery, plant, equipment and raw
materials for a major capital investment. (Customs & Excise Act)

A foreign investor is allowed to purchase land up to one acre for residential purposes ,
64
five acres for commercial use up to 30% of the cumulative shareholding in a public
company.( Foreign Investment Act)

Relief from Value Added-Tax (VAT) on imports for highly capital-intensive enterprises.
(Fiscal Incentives Act)
 Provisions for the waiver of income tax on dividends or other distributions, other than
interest, out of profits derived from the manufacture of Approved products. (Fiscal
Incentives Act)
MERCHANT
MARINE

Duty free importation of plant, machinery, equipment, components and raw materials for
use in industrial enterprises. (Customs & Excise Act)

A foreign investor is allowed to purchase land up to one acre for residential purposes ,
five acres for commercial use up to 30% of the cumulative shareholding in a public
company.(Foreign Investment Act)

Relief from Value Added-Tax (VAT) on imports for highly capital-intensive enterprises.
(Fiscal Incentives Act)
 Provisions for the waiver of income tax on dividends or other distributions, other than
interest, out of profits derived from the manufacture of Approved products. (Fiscal
Incentives Act)
MUSIC AND
ENTERTAINMENT
PRINTING AND
PACKAGING

150% tax rebate on the expenditures in respect of an artistic work up to a maximum of
TT$1,000,000. (Corporate Tax Act: Arts and Culture Allowance)

Tax exemptions up to seven years for profits of the project, tax exemptions in respect of
interest received on an approved loan used for a project which has international tourism
appeal and which showcases the culture, heritage and artistic product of Trinidad and
Tobago. (Tourism Development Act)

Importation of entertainment equipment including musical instruments, electronic items
and other apparatus free of customs and excise duties. (Customs and Excise Act)

A foreign investor is allowed to purchase land up to one acre for residential purposes ,
five acres for commercial use up to 30% of the cumulative shareholding in a public
company.(Foreign Investment Act)

Relief from Value Added-Tax (VAT) on imports for highly capital-intensive enterprises.
(Fiscal Incentives Act)
 Provisions for the waiver of income tax on dividends or other distributions, other than
interest, out of profits derived from the manufacture of Approved products. (Fiscal
65
Incentives Act)

Duty free importation of plant, machinery, equipment, components and raw materials.
(Customs & Excise Act)
 A foreign investor is allowed to purchase land up to one acre for residential purposes ,
five acres for commercial use up to 30% of the cumulative shareholding in a public
company.(Foreign Investment Act)
YACHTING

Any company which promotes or sponsors yachting will be granted a tax allowance of
150% of the expenditure incurred, up to a maximum of TT $1,000,000.00. (Corporate Tax
Act)

Tax deduction of up to 25% on investment in the equity capital of an approved yachting
tourism project. (Income Tax Act)

Tax exemption for a maximum of seven years on the profits from an approved tourism
project including marinas, boatyards, dive operations, water sports, charter boats, cruise
activities and tour operations by sea. (Tourism Development Act)

VAT exemption on Yachting repair and other services including port and harbour services,
docking, mooring and conservancy are VAT exempt, provided that the yachts and
pleasure crafts are owned by person who are neither citizens nor residents of Trinidad
and Tobago at the time when the repairs and services are performed. (Tourism
Development Act)

Full exemption from Customs Duties on imports of machinery and raw materials used in
the tourism sector. (Customs & Excise Act)
 A foreign investor is allowed to purchase land up to one acre for residential purposes ,
five acres for commercial use up to 30% of the cumulative shareholding in a public
company.(Foreign Investment Act)
TOBAGO
INVESTMENTS

Tax holidays of up to ten years for the manufacture of products using significant local
inputs, or goods produced exclusively for export, or capital intensive businesses investing
in excess of TT $50 million.

Exemption from corporation tax on profits, taxes on dividends, and value added taxes on
inputs for entities exporting 80% of products.

Exemptions from import duty on raw materials, machinery and equipment for industrial
projects.
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PAYE - system of taxation where
enterprise has employees
Structure
Corporation Tax
Income Tax
Health
Surcharge
25% of chargeable
income
Tax rate
Business Levy
Green Fund Levy
Withholding Tax
VAT
0.20%
0.1% of gross
revenue
5%, 10%, 15%, 20%
Revenue >$360K
Sole trader
No
Yes
Yes
Yes (gross rev. > 200K)
No
15% to individual
Revenue >$360K
Partnership (General)
No
Yes
Yes
Yes (gross rev. > 200K)
Yes
20% payment to any
other company
Revenue >$360K
Limited Liability
Companies
Yes, 25%.
However, "no" for
approved small
companies,
approved activity
company, cos in
regional
development area.
No
Yes
Yes
Yes
Yes
Revenue >$360K
Partnership (Limited
Liability)
Yes, 25%
No
Yes
Yes
Yes
Outward, 10% any
other company; 5% to a
parent company
Revenue >$360K
NPO
No
Revenue >$360K
Co-operatives
No
Revenue >$360K
Small businesses pay
N.I.S.
Annual
Returns
Hotel tax
10% of
revenue
taxes quarterly basis
Late payment 20%
annum
69
G. References
European Commission: Entrepreneurship Education: Enabling teachers as a critical success factor. “A
report on Teacher Education and Training to prepare teachers for the challenge of entrepreneurship
education.” (2011)
European Commission: How to support SME Policy from Structural Funds (2012)
European Commission: The new SME definition: user guide and model declaration.
European Union Support Programmes for SMEs : An overview of the main funding opportunities
available to European SMEs (2012)
German Institute of Global and Area Studies (GIGA): Economic Growth and Poverty: Does Formalisation
of Informal Enterprises Matter? (2006)
Global Partnership for Financial Inclusion: the Brazilian way- Brazil’s engagement with standard setting
bodies and the implications for financial inclusion. (2011)
International Finance Corporation (IFC): Designing a Tax System for Micro and Small Businesses: Guide
for Practitioners (2007)
International Finance Corporation (IFC) and the World Bank: Doing Business in a more transparent world
Report 2012. (http://www.doingbusiness.org/~/media/FPDKM/Doing%20Business/Documents/AnnualReports/English/DB12-FullReport.pdf
International Journal of Business and Management: Women Participation in SMEs Business- A Case
Study of Sindh Province (2010)
International Labour Organization (ILO): The Green Jobs Programme of the ILO (2012)
International Labour Organization (ILO): Micro, Small and Medium-sized Enterprises and the Global
Economic Crisis. Impacts and Policy Responses. (2009)
Khrystyna Kushnir, Melina Laura Mirmulstein, and Rita Ramalho : Micro, Small, and Medium Enterprises
Around the World: How Many Are There, and What Affects the Count? (2010)
Malaysian SME Corp: Definition of SMEs. http://www.smecorp.gov.my/v4/node/14
Saleh Ghavidel, G.Farjadi and A. Mohammadpour : The Relationship Between Entrepreneurship And
Unemployment In Developed And Developing Countries. (2011)
Swedish International Development Cooperation Agency : Fact Finding Study : The Informal Economy
(2004)
Spring Singapore: Assistance Programmes for SMEs (2012)
United Nations Development Programme (UNDP), Trinidad and Tobago and South Trinidad Chamber of
Industry and Commerce (STCIC): Mapping Corporate Social Responsibility in Trinidad and Tobago, (2007)
United Nations Industrial Development Organization (UNIDO) and Organization for Economic Cooperation and Development (OECD): Effective Policies for Small Business: A guide for the policy review
process and strategic plans for micro, small and medium enterprise development (2004)
United States Small Business Administration (SBA): The Dynamic
Entrepreneurship, Unemployment, and Growth: Evidence from U.S. Industries
Relationship
between
World Economic Forum: Global Competitiveness Report 2012-2013
World Economic Forum: Women’s Empowerment: Measuring the Global Gender Gap. (2005)
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