Barriers to Business in Haiti

In a study completed by the World Bank in June 2015, Haiti has a new business density of 0.06. This translates to 383 new businesses created over the course of the year. Out of context, these figures mean very little. However, if we look to Haiti’s nearest neighbor, the Dominican Republic, we see that the Dominican Republic enjoys a new business density of 1.2 and 8,061 new businesses created. Why is this important? We know that entrepreneurship is one of the single biggest indicators of economic growth and power. And the intersection of new firm registration, the regulatory environment, and economic growth may lend credence to the voices that suggest there needs to be a focus not only on physical infrastructure, but also on legal, regulatory, and administrative infrastructures.

What stands in the way of new businesses that can create new jobs and spur the construction of physical infrastructure? Perhaps, one of the greatest and simplest areas of concern is the length of time to become formally incorporated. It takes an average of 97 days to register a new business in Haiti; seventy-eight of those days are simply to register the business with the Department of Commerce and receive an authorization of operations. The average time for new businesses to be operational in Latin America and the Caribbean is 29.4 days. In the Dominican Republic, the average time is 14.5 days. These comparisons are not an attempt to join the seemingly prevailing voices stating that Haiti cannot compete in or contribute to the world economy. These comparisons are made to bring attention to the areas (legal, regulatory, and administrative infrastructures), where innovation is needed to break the cycle of poverty in Haiti.

* This article was created using information from the wonderful World Bank Doing Business database. Any errors are my own.

 

 

Lovely Bonhomme Headshot-LG

 

Lovely  is a first-year student at CUNY School of Law, which graduates public interest attorneys with the motto of practicing “law in the service of human needs”. She is a first generation American of Haitian descent. She has a particular interest in corporate law with a focus on infrastructure and energy projects in emerging markets and developing countries. More broadly, she hopes to contribute to the areas of international rule of law and human rights. 

International Institute for the Unification of Private Law

“The International Institute for the Unification of Private Law (UNIDROIT) is an independent intergovernmental Organisation with its seat in the Villa Aldobrandini in Rome. Its purpose is to study needs and methods for modernising, harmonising and co-ordinating private and in particular commercial law as between States and groups of States and to formulate uniform law instruments, principles and rules to achieve those objectives.”

 

Membership to UNIDROIT is limited to states that accede to the UNIDROIT statute.

UNIDROIT currently has 63 member states.

Of the Americas, the following states are members:

– Argentina / Argentine
– Bolivia / Bolivie
– Brazil / Brésil
– Canada
– Chile / Chili
– Colombia / Colombie
– Cuba
– Mexico / Mexique
– Nicaragua
– Paraguay
– The United States of America / Etats-Unis d’Amérique
– Uruguay
– Venezuela

Haiti is not a member state.

 

 

 

Haiti Wages

Someone got paid about 4 dollars a day in Haiti to make your Gildan shirt.
Haiti is one of many countries to establish a minimum wage that varies across employment sectors, with different daily rates established for domestic workers, electricians, bank employees, and other professions.
“As opposed to the bulk of Gildan’s operations, which are vertically integrated, sewing operations in Haiti are subcontracted by Gildan to third parties. Therefore, to address the concerns which were raised regarding the issue of minimum wages in Haiti, Gildan made a commitment in November 2013 to require its third party contractors in the country to comply with the payment of 300 gourdes per day in an eight hour work day to their piece rate workers, based on the expectation that they continue to operate at a reasonable efficiency rate.”

ICC Young Arbitrators Forum

The International Chamber of Commerce (ICC) hosts the Young Arbitrators Forum (YAF) where members can “learn from experienced practitioners about career development and issues of interest in arbitration.”

The forum is free to join through a simple online form.

The ICC YAF is headed in Paris but hosts events world wide, including San Francisco, California.

The events are frequently hosted by law firms and “offer a fresh way for young practitioners of the arbitration world to interact.”

 

International Chamber of Commerce (ICC)

The International Chamber of Commerce (ICC) published a new set of rules called the Incoterms® that  are an internationally recognized standard, used in international and domestic contracts for the sale of goods.

Since their first publication in 1936, the rules have provided internationally accepted definitions and rules of interpretation for most common commercial terms.

“The rules have been developed and maintained by experts and practitioners brought together by ICC and have become the standard in international business rules setting. Launched in mid-September 2010, Incoterms® 2010 came into effect on 1 January 2011. They help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the delivery of goods from sellers to buyers. Incoterms® rules are recognized by UNCITRAL as the global standard for the interpretation of the most common terms in foreign trade.”

Online training on Incoterms® is available.

Contracts for the International Sale of Goods (CISG)

The United Nations Commission on International Trade Law (UNCITRAL) provides information on the United Nations Convention on Contracts for the International Sale of Goods (CISG). CISG was opened for signature at the concluding meeting of the Conference which took place in Vienna, Austria on April 11, 1980. Since that time, 84 states are parties to the CISG.

The CISG applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State.

The CISG can apply automatically to your transactions with foreign buyers or suppliers of raw materials, commodities and manufactured goods.

This is because the CISG is a self-executing treaty.

 

Haiti has not yet accented to the CISG.