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T&T an advantageous location for BPO

Article - May 20, 2014
Franco Siu Chong, Chairman and Varun Maharaj, CEO, of the Trinidad and Tobago International Finance Centre speak to Untied World about the advantages of business process outsourcing in the country for US companies, particularly in the finance sector, as well as the new investor legislation and the company’s big achievements in it the short three years since its establishment
To date Trinidad and Tobago’s principal wealth has been focused around its natural resources; however the financial services sector provides the 2nd highest contribution with 14% of the GDP.  Can you give us a brief background of TTIFC and the major advantages Trinidad and Tobago offers as an international finance center?
Mr. Siu Chong:  In 2011, a board was appointed to look at the IFC which was initiated by the previous administration. The TTIFC is a new creature in Trinidad with the goal of developing the capital markets and attracting BPO operations.  We have realized there is a little niche for off-shoring operations, especially for American companies.  A lot of the BPO operations in America are currently in India, but what we can offer them is to do their back-office processing in the same time zone, in English, here in Trinidad. We’ve been quite successful, and we’ve attracted one of the largest BPO firms in India, Quatrro, to establish themselves here.  They, together with one of their partners, Caribbean Electronic Payments, are establishing the first pilot project right here in the TTIFC office.
Added to that, Trinidad and Tobago has an extremely highly educated workforce thanks to universal free education provided by this current government.  We expect to have a pool of ready students to get into this industry; in fact, our first class of students specifically trained to enter the BPO markets have just graduated.
The US is obviously a big target market for BPO.  What other countries do you feel have potential for this market?
Mr. Siu Chong:  Canada and the USA are our really specific target markets.
Mr. Maharaj: Over the last 10 years, the government has spent billions of dollars providing free education from kindergarten to PhD Level.  As a result of this initiative, as the chairman has indicated, we’ve been able to produce a significant number of accountants in addition to professionals in banking and finance, mathematics, actual science, and computer science. For an Indian provider such as Quatrro, it presents an opportunity to access that level of expertise at a price point in this environment which is competitive with India.  In addition, we have a greater cultural affinity to North America since many of us have either studied or worked in there.  
By establishing a BPO facility in Trinidad, a Global Provider can pursue what may be called multi-shoring.  They can have operations in India, but we can also provide them with an opportunity to operate within the same time zone as that of a New York or Toronto.  We have a similar culture and similar laws as North America, which is English common law, when compared to all of the other countries in the region.  Trinidad has a stable government and it boast of a knowledge society. 
If you have an investor that wants to come in and invest in the financial services sector here, or in setting up their BPO operations, how would you help them from start to finish? 
Mr. Maharaj: It’s an end-to-end service.  We’ll walk them through all the steps of working with other government agencies to insure that they get their required licenses, work permits, and whatever else they may need to start operations here.  Of course, we’ll also work with them to fashion specific incentives to grow their business so as to amplify their advantage.
Mr. Siu Chong:  They would normally register as a free zone entity and as such they would enjoy unlimited tax-free status as long as they qualify to have more than 50% of their revenue for export.  That is what we have in the BPO industry, but we also want to develop the capital markets to establish an IFC special purpose economic zone where we would have IFC laws that are specific and apart from the existing laws of Trinidad and Tobago.  We could guarantee finance companies that come here would operate under this IFC law.
You are currently implementing FINESSE to provide incentives and support to encourage investment in the banking, financial services and insurance industry.  Can you tell us more about FINESS and the major benefits it brings to investors?
Mr. Maharaj:  FINESSE is really the financial services business process outsourcing. It focuses on banking, finance, and insurance in terms of verticals but also it cuts across in terms of finance and accounting, so we may seek to attract a provider who carries work for an HSBC or Royal Bank of Canada, and once here, in addition to banks they may have the opportunity to carry out work for a number of their global clients from the energy related industries in the accounting sphere while operating in Trinidad.  
Mr. Siu Chong:  Scotia Bank has already established its back office in Central Trinidad where they are employing over 300 people.  They are doing the back-office processing for the whole region.  This has been a big milestone and success for us.  
Mr. Maharaj:  Also the Royal Bank of Canada, they have set up shared service operations where they have consolidated a number of processes in Trinidad to do work for the Northern Caribbean and also Canada.
How do you see the current state of the capital markets in the country, and what do you feel is the potential?
It’s the best developed capital market in the Caribbean, but we have some distance to go.  We believe that by putting in place best-in-class investor protection legislation within a special purpose economic zone, we can attract global players to come in, and they will raise the standard of finance and financial services operations in Trinidad.  The laws we have been looking at are somewhat similar to what exists in Dubai or Qatar where there is quick resolution of issues, among others.
In your opinion, what are some other opportunities in the financial services sector? 
Mr. Siu Chong:  Trinidad can be a place where we can source capital.  Right now we have a big surplus of capital that is not being utilized and tapped.  A lot of our neighbors in the Caribbean and the region are looking for sources of funds.  Trinidad can be that market they can come to, and then the investors who would want to lend money would be under this special SPEZ law to make sure their investment abroad would be protected.
How far is Trinidad and Tobago from becoming the major finance hub in the region?
Mr. Maharaj:  I think we are already somewhat of a hub and we could become a major hub for example in the area of financing infrastructure in Latin America fairly easily.  If we are able to attract the big international names to our SPEZ we can be the launching pad into Latin America while avoiding using Latin American domestic law which is civil or Napoleonic in nature, unlike the law used for international financing transactions .  You may choose to issue mutual funds within our economic zone then you could sell it to the wider world.  You could also use the SPEZ law to attract international asset managers to register their asset management vehicles in Trinidad and as a result, you attract business to the country.
What will be the greatest challenges in getting this legislation in place?
Mr. Maharaj:  There are a number of territories/space that people hold close to their heart.  In order for us to be successful in setting up this whole economic zone we need to convince people that this is just enlarging the economic pie.  It could in fact increase their business and raise their standard of operations.
So far this is a very young organization, established in March 2011, what do you feel have been the greatest achievements since it’s been established?
Mr. Siu Chong: One of our greatest achievements has been bringing Scotia Bank and RBC’s back office operations in Trinidad. The next significant establishment is Quatrro, this big Indian BPO that has come to Trinidad to set up shop.  That tells it all.  Our value proposition is real. The other achievement in progress in the capital markets is the establishment of the IFC legislation. It has been accepted by the cabinet and the government, and we are now engaging attorneys out of the UK who have assisted Dubai and Qatar.
Mr. Maharaj:  With the establishment of the Scotia facility and the RBC facility, it is concrete evidence that the value proposition that Trinidad and Tobago holds out to the world is a valuable one because these multinationals acted on it. And it is important to note that Quatrro’s managing chairman and founder, Mr. Raman Roy, is considered the father of the BPO industry; so for him to make this decision to come to Trinidad says a lot of what we have to offer to the world because Quatrro does not have many operations on this side of the world.  
How long will the IFC legislation take to be approved?
Mr. Maharaj:  We have compressed time frame compared to the length of time it took for Dubai and Qatar.  We want it done before the end of this year.  If everything goes well, in five years time, Trinidad will be transformed.  The economic landscape will have changed.
Would it make sense for a US company who doesn’t already have some sort of a business established in Trinidad to come here and set up back-office operations?
Mr. Siu Chong:  Yes, it would.  You see many US companies already have back-office operations in the Philippines.  A business executive has to fly 18 hours to get there, but it is only 3 hours by plane to Trinidad from Miami. And our country is a beautiful country, so add to the business culture you have the weekends.  The business executives enjoy living here.
Mr. Maharaj:  Compared to the rest of the region, we are below the hurricane belt.  We exist right between North and South America so we can provide an entree into South America but still allow operation in the English language and within English law.
In a conversation with a potential investor, what would you tell them that you think would convince them without a doubt to come and invest in Trinidad and Tobago?
Mr. Maharaj:  To any executive from a large multinational company who is interested in Trinidad and Tobago; I will help arrange their trip and set up meetings for them to meet the key stakeholders. In short there would be an experience which proves the concept/value proposition. Come and experience the country.  If their investment is in the long-term interests of Trinidad and Tobago, we can even customize incentives to make the investment more attractive.  We will even underwrite the cost of investors coming here to explore the market.  If you are serious about investing in BPO or Capital Market activity, we can help.
Mr. Siu Chong:  Explore the possibilities.  We can save you money by setting up an operation here.