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INTER-AMERICAN DEVELOPMENT COMMISSION
A Statement of the
LAWS OF HAITI
In Matters Affecting Business in Its Various Aspects and Activities
WASHINGTON, D. C.
A very limited edition of this STATE ENT OF HAITIAN LAT,' IR MATTERS AFFECTING BUSINESS IiT ITS VARIOUS ASPECTS AND ACTIVITIES is being offered now in mimeographed form in order not to delay its availability until such time as circumstances may permit its publication in printed form.
Copies are obtainable from the Inter-Ameri'can Development Commission 2400 Sixteenth Street, N.W., Washington, D.C. The price is $2.00 per copy.
Similar Studies of the Law of Business in several of the Latin American Republics are under preparation and will be made available from time to time by the Inter-American Development Commission.
This Statement of the Laws of Haiti in matters affecting business in its general aspect and activities has been prepared under the auspices of the Inter-American Development Commission of Washington, assisted by the Haitian Commission of -Inter-American Development.
PIERRE CHAUVET CHARLES F. PRESSOIR and
GEORGES BAUSSAN Lawyers of Port-au-Prince, Haiti
In making the Statement available to such persons, corporations and institutions as may wish to study or consult it, the InterAmerican Development Commission is animated by the desire to render a service as part of its work in the field of practical interAmerican collaboration. The Commissions, of course, do not in any way assume responsibility for the contents of the Statement.
The information herein contained is not meant to relieve anyone of the reasonable requirement of consulting counsel in respect
to legal matters in Haiti.
J. RAFAEL OREAMUNO Inter-American Development Commission
Washington, D. C.
Copyright, 1947, by the Inter-American Development Commission Washington, D. C.
This is a translation of the French original, which is deposited in the offices of the Inter-American Development Commission in Washington, D. C. Although all due care has been exercised in the preparation of the translation, no assurance is given as to its absolute accuracy.
INT=R-AERICAN D=ELOIMENT COMMISSION
TABLE OF CONTENTS
NATIONALITY AND 11MIGRATION
1. Laws and regulations 1
2. Laws and regulations 3
3. Passports, visas and other requirements 3
4. Civil rights of foreign residents 4
5. Exercise of liberal professions by foreigners 5
RIGHTS OF FOREIGNERS TO ENGAGE IN INDUSTRY AND TRADE
1. Industry 6
2. Commerce 6
3. Nationality of companies or corporations 6
4. Foreign employees and foreign capital 6
1. Forms of mercantile concerns 8
2. Taxes on mercantile concerns 10
3. Taxes on shares of stock 10
FOREIGN COMMERCIAL COMtPARIES
1. Distinction between foreign and Haitian
2. Distinction between corporations and
other business organizations 12
1. Fees and taxes for business licenses
2. Individual income taxes 15
3. Schedule of taxes in individual incomes 17
4. Tax exemptions, Capital, Subsidies
Concessions and Registration Charges 18
5. Tax Administration 18
AGRICULTURAL ACTIVITIES AND -NE=RPRISES
1. Law applicable to agricultural activities 20
2. Equal rights for foreigners and Haitians 20
3. Employees 20
4. Taxes 20
1. State and private ownership 22
2. Rules concerning prospecting 22
3. Rules governing exploitation of mines
and quarries 23
4. Rules governing concessions 24
5. Taxes 25
1. Validity recognized by the Constitution 26
2. Procedure for obtaining a monopoly 26
3. State monopolies 26
4. Special Concession 26
1. Legislation for the protection of labor 27
EXCIHANGE CONTROL 29
REAL PROPERTY RIGHTS
1. Agricultural and forest lands 30
2. Acquisition of public lands 31
3. Fees and taxes on land purchases
possession or rental 32
4. Rights of foreigners to purchase or
use land 32
INDUSTRIAL PROPER= 33
NATI0 .LITY ATD IM1,IGRATION
1. Laws and regulations regarding nationality
Nationality of individuals in Haiti is covered by the Constitution of 1944 in articles 5 and 6; and by thc law of August 22, 1907. The law of February 13, 1925, concerns the nationality of companies.
l Nationality of persons
Article 6' of the Constitution provides that all Haitians are equal before the law. Article 5 concerns the political rights of persons who have become Haitians by naturalization.
Article 1 of the law of August 22, 1907, dealing with nationality and naturalization provides that Haitian citizenship is acquired by birth, by naturalization and by special provisions of law.
2) Citizenship by birth
The Haitian law' does not declare that all persons born in Haiti are Haitian citizens. If the father is a Ha-itian, his child born in Haiti is Haitian. If the father or mother is a foreigner, but a member of the African race, their child born in-Haiti is a Haitian. Birth in Haiti by parents of another race does not make a child a Haitian, but upon becoming of age, or later, he o~r she may choose Haitian citizenship, or be regarded as a foreigner.
3) Acquisition of nationality by naturalization
Articles 5 and 6 of the law of August 22, 1907, dealing with-naturalization have been replaced by the decree-law of July 1, 1941, which provides that, to become naturalized, ten years of residence in Haiti is required (article 1). According to article 4 of the decreelaw of December 28, 1943, the term of residence is reduced to five years
for any foreigner who may marry a Haitian woman and to three years for members of the Catholic Clergy of Haiti, To become naturalized a tax of 100 gourdes (,20.00) is to be paid and application made to the Department of Justice (article 2). The following documents should accompany the application:
1) Residence permit;
2) Identity card;
3) A certificate of residence signed by the Justice of Peace
4) Receipt showing payment of the $20 tax.
The President of the Republic passes upon an application for
naturalization by a decree published in the Official Gazette. Before the decree is published, the applicant must swear to renounce allegiance to any other country than Haiti.
4) Acquisition of nationality by means other than naturalization
Persons entitled to naturalization according to the law of August 22,l1907, are: child of an unknown father and mother (article 3)4 child of a foreign father and mother but not of the African race (article 4); a foreigner who has been an official of the Haitian Government for five years (aritclo 7); and a child of a Haitian woman married to a foreigner (article 11).
A Haitian woman married to a foreigner who after his marriage
becomes naturalized as a Haitian, thereby recovers her Haitin-nationality, The status of the children is dealt with in articles 12 and 13. A woman of non-Haitian origin married to a foreigner may gain Haitian nationality if the husband becomes naturalized as a Haitian (article 14). A Haitian woman, by virtue of article 3 of the decree-law of October 22, 1942, retains her Haitian citizenship upon marrying a foreigner.
According to article 16, adoption of the above privileges is optional.
5) Civil and political rights of naturalized citizens
According to the Constitution of 1944, all Haitians are equal before the law and in the exercise of civil rights.
Article 5 of that Constitution provides that foreigners naturalized as Haitians may not exercise politicql rights until having resided in the country for ten years after naturalization.
6) Loss of nationality
Article 17 of the law of August 22, 1907, states that citizenship is lost:
1) By naturalization in a foreign country;
2) By abandoning the homeland at a time of imminent danger;
3) By unauthorized accobtance of public office or pensions from
a foreign government;
4) By rendering; services'to enemies of the Republic or by any
transaction with them; and
5)" By life sentence to corporal and degrading punishment.
2. Laws and Regulations
Decree-law of January 1, 1945, groups foreigners entering Haiti into three categories: 1) for residence (articles 1 to 9); 2) as tourists (article 9); and 3) in transit (articles 19 ond 20).
1) Foreigners arriving for permanent residence
A foreigner arriving in Haiti to reside must possess $200 if
single, or $400 if accompanied by his family. Also he must present to the Immigration Service a health certificate and a certificate showing that he has never been comdemned for a crime or common law offense. These documents must be legalized by a Haitian consular or diplomatic agent (article 18).
Within twenty-four hours after arrival the foreigner, in person or through his hotel, must present to the Department of the Interior or to the Police Station, a declaration of residence. He must go to the Department of the Interior, or if outside the capital, to the Office of the Deputy, for a residence permit. There he will receive a card, and should then go to the Tax Office, where he pays $6,00oo, of which $1o00 is for the residence permit (pormis de sejour) and $5.00 for the annual residence tax, Having paid the tax the foreigner may receive his actual residence permit from the Department of the Interior. The residence permit is renewable nine times and therefore is valid for te years. After ten years of residence the annual tax is $3,00 instead of $5.00.
A tourist may remain in the country thirty days (article 9). He may obtain an extension of his sojourn, subject to a tax of $2.00, upon application to the Department of the Interior.
3) In Transit
A foreigner in transit may remain in the country for seventy-two hours without observing any formalities, if the transportation company or enterprise furnishes a written guarantee to the Immigration Service. He may obtain permission to'prolong his stay 15 days upon payment of a tax of $3.OJ (article 19). Permission for further prolongation of his stay must be obtained by applying to the Department of the Interior, and payment of a tax of $2.00.
3. Passports, Visas and other requirements
In principle, any foreigner may enter Haiti upon fulfilling legal
requirements; the government reserving the right to refuse admission, Every foreigner desiring to enter the country must apply to the Haitian consulate or diplomatic office located at his place of residence for a passport visa for that purpose.
The consul or diplomatic agent will refer the application to the Haitian Government for approval (articles 4 to 6). Upon approval by the Government the passport is visaed upon payment of a fee of 5.o00 (article 7). A consul or diplomatic agent does not need the approval of the Government for a visa for a tourist.
A tourist pays a fee of "2,00 for a visa by a Haitian consul or diplotutic agent (article 9) with the exception of a North American tourist, who as a result of the exchange of notes of February 2, 1945,
is exempt from payment of this foee.
As a foreigner in transit is exempt from the above formalities, he need not' appear beforoa consular or diplomatic agent before his departure (article 19). A foreigner who has been in Haiti more than
three days may not leave the country without obtaining an exit visa from the Department of the Interior, for which he pays a fee of $2,00. This visa must be registered at the Police Station.
4. Civil rights of foreign residents other than those connected with
commercial, industrial, agricultural or mining activities)
The status of a foreigner in Haiti, with reference to exercise of civil rights, does not differ from that of a Haitian, except in regard to a) the right to own real property, and b) the exercise of certain liberal professions.
A foreigner may own real property in Haiti only for his own personal occupation. He is prohibited from leasing it to others (article
1 of the law of February 13, 1925).
Article 15 of the law of February 13, 1925, provides that to purchase real estate a foreign individual or company must show proof that it is required for the purposes of habitation, for industrial undertaking, or for teaching. At the time of purchase there must be submitted the designation of his residence and information as to the use and purposes of the property to be acquired.
However, the statement of purposes will not prevent the foreigner from later making such use of the property as is permitted by law.
One important effect of this limitation on the right to hold real property is found in matters of inheritance. Different cases of this
kind should be noted.
1) Foreign heirs, legatees or surviving spouses
The respective rights of these persons, if all are foreigners, are determined by the last will and testament of the deceased and the present law. The competent court is that of the plaei of residence in Haiti of the deceased.
2) Haitian heirs
The Haitian laws of succession are applicable,
3) Conflict between Haitian and foreign heirs
The division of property is made by the competent H-itian court in accordance with Haitian laws. However, in regard to the foreign interests there are two different cases to be considered:
1) If the foreigner does not reside in Haiti at the time of
settlement of the estate, the property that would have
gone to him is sold at public auction unless the Haitian co-heirs or co-logatees decide to keep it. In this case the foreign heir or legatee is paid a sum determined by
expert appraisers chosen by the parties concerned, or
by the Court;
2) If the heir or legatee resides in Haiti he cannot receive
in kind the real property assigned to him unless it is to
be used for one of the purposes provided in the heretofore
mentioned law of February 13, 1925.
5. Exercise of liberal professions by foreigners
A foreigner may not exercise certain of the liberal professions,
such as notary and lawyer, but may exercise the profession of physician, pharmacist, dental stugeon, or midwife. However if their professional degrees were obtained abroad they must obtain the equivalent degrees in Haiti.
The number-of such professionals is, moreover, limited by the law
of July 9, 1940', to five physicians, two dental surgeons, tvn pharmacists and one midwife.
RIGHTS OF FOREIGNERS TO ENGAGE
IN INDUSTRY AND TRADE
Foreigners have the right, not restricted by any law, to engage in any kind of industry in any part of the country.
By virtue of article 1 of the decree-law of September 23, 1939,
foreigners may not eng age in commerce except in the ports open to foreign commerce, that is, in Port-au-Prince and the eleven large coastal cities such as Cap Haitian, Yacmel, 6r6mie, etc, Hence a foreigner may not have a commercial establishment in a ton-open port, such as l'Archaie
or in an interior town such as Hinche. Moreover, even in the open ports, foreigners may not sell at retail the goods listed in the decree-law of September 23, 1939.
These restrictions apply only to the purchase and sale of goods. Consequently, a foreigner may operate a hotel, even in a non-open port or in an interior locality, such as Kenscoff.
3. Nationality of companies or corporations
The nationality of companies is dealt with in article 4 and 5 of the law of February 13, 1925. A society6 anonyme" corresponds to a corporation in the United States. if formed in Haiti and maintaining its headquarters there its nationality is Haitian. As stated in the section relating to taxation, it does not pay a license fee and its patent fee in general amounts to one half the patent fee of a foreign company. A company, other thcn a corporation organized in Haiti under the laws of the country, has Haitian nationnlity if at least one half of the capital belongs to Haitians.
4. Foreign employees and foreign capital
In principle, there are no provisions of law compelling foreign
agricultural or industrial enterprises to employ a certain percentage of Haitian workers or employees. Nevertheless it is the usual rule in contracts between the state and private individuals or companies, for the Government, before approving the undertaking, to establish a definite percentage for the number of Haitian employees.
The technical and adminilorctive staff of a commercial or industrial enterprise is not included in the terms "employees and laborers" such personnel always may be foreign.
Haitian law fixes no limit on t.he percentage of foreign capital that may be invested in industrial or commercial enterprises, whether such enterprises belong to nationals or foreigners, nor is it concerned with the percentage of' Haitian or foreign capital except in determining the nationality of' a company (law of' February 13, 1925).
1. Forms of Mcrcantile concerns
Concerns recognized by Haitian law and having legal personalities distinct from the personalities of their individual members, are the collective partnership (soci6et.ennom collectif), the silent partnership society6 en conmandite), which may have one of two forms the simple silent partnership or the stock-issuing partnership (en commandite participation), and the corporation (soci6t6 anonyme), A type of organization having no legal personality is the co-parthership (soci6t6 en participation).
These several forms are described as follows:
1) A collective partnership is formed by two or more persons for the purpose of doing business under a firm name. Only the names of partners may be included in the firm name. The partners are and remain jointly and severally liable with all their property for all the partnership debts (articles 21, 22, and 23 of the Commercial Code),
2) A silent partnership is formed by contract between one or several associates who are jointly and fully liable, and one or more associates known as silent partners (coraanditaires) who are more contributors of funds. It operates under a firm name vbich must contain the names of one or more bf the fully liable partners (article 24 of the Commercial Code), A silent partner is liable for the firm's losses only to the extent of the funds he has contributed to the firm (article 26).
3) L- ratin does not operate under a firm name, but under a
name which indicates the purpose of the enterprise. Its members are liable-only for the amount of their interest in the corporation (articles 30, 31, Pnd 34 of the Cormercial Code). This form of business organization becomes definitely created only after at least half its capital has been subscribed to, and payment therefor has been made by each shareholder in currency, securities or otherwise in full, if the amount subscribed to by him is not over $20, and at least one fourth thereof -if it is $100 or over. Subscription and payment must be shown by a statement executed before a notary which must be published in the Official Tournal along with the charter, by-laws and the approving decree issued by the President of the Republic (article 35 of the Commercial Code). A corporation can not exist without the aforementioned Presidential decree (article 38 of the Commercial Code),
4) A. o-portnership is an organization formed in the manner and under conditions agreed upon between the parties concerned, without the knowledge of third parties (article 51 of the Commercial Code).
The two forms of organization most frequently used are the collective partnership -nd the corporation. If a maximuma of moral and pecuniary security is desired the former is the best; the latter however best serves the purposes of enterprises requiring a large investment of capital contributed by a great number of subscribers each of whom is willing to risk a limited amount in the undertaking. I
The determination as to whether a concern is commercial or otherwise is not dependent upon its form, but rather on the nature and purpose of its business. It is regarded as commercial if it is engaged in commerce and if such is its customary business (article 1 of the Commercial Code).
The Commercial Code of March 27, 1826, amended by decree-law of December 22, 1944, is the sole lavw governing commercial relations.
Foreigners may organize commercial concerns in Haiti and participate
in their operation; they may do so merely as partners or as members of a board of directors. However, they may engage in commerce only in the open ports of the Republic.
Haitian laws do not take into consideration the domicile or residence of a foreigner.
There are no restrictions on the capital that may be invested by a foreign r in commercial concerns established in Haiti.
The Departments of Labor, Commerce and National Economy and the
Director Geheral of Agriculture control the organization and operation of commercial and industrial enterprises.
Associations, companies and corporations or individual enterprises undertaking commercial and banking operations and performing banking transactions involving exchange of currency, precious' metals, and securities are regulated by decree-law of Tune 24, 1940.
Associations, enterprises, etc. having a paid up capital of one million dollars may not engage in business without obtaining previous authorization by the President of the Republic.
The telephone service within townsand between towns of the country is a State service under the Department of National Economy (Decree-law of September 23, 1944).
2, Taxes on mercantile concerns
As a general rule the basis of taxation for business organizations are the same as for individuals, discussed earlier. In summary, the taxes to be paid are the following:
1) Communl-taxes, in accordance with decree-law of September
23, 1935, as heretofore indicated under "Schedule of business
fees and taxes" and subsequent titles;
2) Governmental taxes, as heretofore indicated under "Schedule
of taxes on individual incomes"; Special licenses (distintt
fro. licenses for fotoigCners hbt applicable hcre).depend
on the type of industry and because of the small amount involved are little more than a statistical fee;
3) Income tax, as already indicated, the rate for individuals
ranges from 3 to 15 percent and for corporations from 12 to
15 percent (oticle 7 of the decree-law of DAy 2, 1942,
amended August 13, 1942).
3, Taxes on shares of stock
1) Roistered shares
a) A tax: of 1 percent is collected once on all shares actually issued, in accordance with the provisions of article 24 of the law of August 11, 1903, which reads as follows: "Every certificate or share ofstock in a firm, company or enterprise of any kind, financial, industrial commercial or civil, whether for a fixed amount or for a certain quota,
* whether paid in full or not, and regardless of the date of organization of the company, firm or enterprise, shall, upon promulgation of the present law be subject to a tax of 1 percent of the par value of each share. Payment shall be made by the company, firm or enterprise, regardless of its status".
b) An annual tax-of O0.25 per $100 payable one fourth quarterly on October 15, January 15, April 15, and July 15.
c) k-traisfer tax of $0.10 per $100 on transferred shares payable quarterly on transfers made during the preceding quarter.
Article 2 of law of August 1, 1921, stipulates that "Beginning with the fiscal year 1921-22 the transfer tax on nominative shares as provided in article 36 of the law of August 11, 1903, shall be ten centimes (0.10) gold per hundred dollars. Such shares shall in addition pay a yearly tax of 25 centimes (0.25) in gold or gourdes per hundred gourdes or dollars under the some conditions as bearer shares".
2) Bearer shares
Bearer shares are subject to taxes indicated under (a-) and (b)
of registered shares but not being registered, are not subject to the transfer ta indicated under (c).
As heretofore stated, in accordance with article 38 of the Commercial Code, in order to operate or exist in Haiti a corporation must be authorized by decree of the President.
FOREIGN COMMRCIAL C0MANIES
1. Distinction between foreign and Haitian Companies
Whereas Haitian companies enjoy all rights pertaining to civil
persons in Haiti with respect to real property, foreign companies according to the law of February 13, 1925, may become owners of real property only in connection with their business.
A second distinction made in law between Haitian and foreign companies is that foreign companies are authorized to engage in commerce only in the open ports of the country.
2. Distinction between corporations and other business organizations
According to law of February 13, 1925, corporations formed in ac. cordance with Haitian law and having their headquarters in Haiti are regarded as Haitian.
2) Other business organizations
The criterion adopted for other organizations is the amount of capital invested; article 5 of the law of February 13, 1925, states that they ere not regarded as Haitian unless at least one half the capital belongs to Haitians.
Nq distinctions are made in Haitian law emong various foreign companies or enterprises with regard to their commercial activities#
Foreign firms must meet the same requirements as Haitian firms withthe: optionin that tho: license eo is double that imposed on a Haitian firm, and an additional license is required. Othzzwise, foreign concerns have the same rights as Haitian business organizations.
Special provisions contained in the decree-law of Sune 24, 1940,
in regard to banks are applicable to both domestic and foreign concerns. The same is true of laws relating to maritime insurance and public transportation.
1. Foes and taxes for business licenses and permits (patentes')
To engage in either industry or commerce a foreigner must obtain a national license (licence) and a local permit (patente), in accordance with which national and local taxes are paid. The law of August 11, 1903, relates to licenses, and the decree-law of September 23, 1935, to
fees for permits.
1) Procedure to be followed in obtaining licenses and permits
1) At the local Tax Office the applicant signs an application
for a permit and an application for a license, paying the
fee for the license, and the corresponding stamp tax. The
amount of the license fee depends upon the amount of the
fee for the permit;
2) He then writes to the Secretary of State for Commerce requesting a license, enclosing the receipts from the local
Tax Office for the license fee and the stamp tax;
3) Upon receiving his license the applicant returns with it
to the local Tax Office And pays the fee for his permit.
2) Additional licenses and permits
A foreigner who dishes to engage in business as a consignee merchant must as a general rule obtain two licensesand permits. In order to sell goods consigned to him he requires authorization to engage in wholesale as well as retail merchandising.
Permits are subject to a surcharge of 20 percent for social aid
and to a stamp tax not exceeding-$2,00. Under the provisions of article 63 of the law of August 11, 1903, amended by the law of August 16, 1913, the license has a surtax of 25 percent in gold to be added to the amount of the fee paid by the foreigner for the permit, but not including the amount for social aid and the stamp tax.
3) Schedule of business fees and taxes
Except for any stipulation to the contrary of the schedule of rates
annexed to decree-law of September 23, 1935, the fee payable by a foreigner for a permit is double that payable by a Haitian.
The fee for a permit varies according to the class of the municipality. The capital, Port-au-Prince, is in the first class. Cap
Haitian is in the second class. The following schedule shows what a foreigner must pay to engage in business in Port-au-Prince, the amounts being stated in gourdes, which is the Haitian currency, and in dollars at the rate of five to one;
Permit of consignment merchant 350.00 70.00
Social Aid 70,00 1'.00
Stamp tax -E-4 .00
430': 00- "'86 .oo
License for consignment merchant 437.50 87.50
Stamp tax 10.00 2.00
Permits for wholesale and retail
merchant 120.00 24!100
Social Aid 24.00 4,80
Stamp tax 2. 00 0.40
License for wholesale and retail
merchant 150,00 30.00
Stamp tax 10.00 2.00
Grant Total 1,183.50 236.70
4) Special Licensas
In addition to those paid on business permits and licens'es, other taxes are payable in certain types of commerce and industries.
Besides a foreigner's license, a special license is required to sell alcohol or tobacco, to manufacture essential and other oils, margarine, soap, matches, and to engage in the lumber trade. In contrast to the regular license fee payable by a foreigner, this special license fee is the same for Haitians and foreigners. This fee is for statistical purposes and as a rule is not high. For example the special license fee provided for by the law of July 7, 1935, for the manufacture of matches, soap, margarine and vegetable oils is 25 gourdes, or $5.00.
5) Tine for payment of taxes
All taxes are payable annually. The fiscal year in Haiti begins October 1st and ends Septcmber 30th.
There are various time limits within which taxes must be paid: the license fee is to be paid between October 1st and 20th and the permit fee between October 1st and J-nu -y 15th of each fiscal year. A new tax payeremust make his payments before starting in business, or be subject to a fine.
T 15 r
6) Identity card taxes
In order to pay his business permit fees, a foreigner must possess an identity card, which is issued by the Tax Office to all foreigners having a residence permit.
According to article 4 of the law of April 21, 1939, merchants and industrialists pay for their identity card tax either according to their yearly salary or their business permits, whichever ta,: would be higher. In other words, if according to the business permit the identity card tax would be $ 2.00 and according to salary it would be 45.00, a tax of $5.00 is collected by the Government'. Based on salaries,thb identity card tax ranges from $0.20 to $25.00. On the other basis, it is figured at 10 percent of the permit fee. Consequently, the identity tax of a foreign consignment merchant at Port-auxPrince amounts to 35 gourdes or "?'7.00, as may be seen from the table above.
7) Different business tax-.es for Haitians and foreigners
To summarize, there are three kinds of business taxes which are different for foreigners and Haitians, to wit:
1) License tax for foreigners is collected from foreigners
but not from Haitians;
2) The business permit fee for foreigners is in general double
the amount paid by-Haitians. Article 7 of the decree-law of September 23, 1935, provides that except in specially designoted cases foreigners mu~t pay double the amount of tax
indicated in the schedule;
3) The identity card tax of a foreigner is double that of a
Haitian in most cases because the business permit fee of
the former is double that of the latter. In certain instances,
the identity card tax of a foreigner is four times that of
a Haitian because in Port-au.orince a foreign representative
is subject to a business permit fee of 200 gourdes ($40)
whereas a Haitian representative pays but 50 gourdes ($10).
However, the identity card tax is not high, not exceeding
020 even for the proprietor of a large business.
2. Individual income taxes
This most important tax of all wgs 'established by decree-law of May 2, 1942, and wtqs amended August 13,' 1942. It applies only to individual
earnings from industry and commerce. There is no general income tax in Haiti. Persons engaged in professions, such as medicine, law, engineering, etc., do not pay income taxes.
All taxes, national or local, collected by the government are based on operations and activities within the country and not those abroad. The income tax of a merchant doing business both in Haiti and the United States applies only to earnings from his business in Haiti, It is applied to net income.
Article 2 of decree-law of May 2, 1942, indicates certain exemptions They are the incomes of all individuals, industrialists and merchants who sell quantities of less than one barrel, one dozen, five-liters, one case
or other packing unit, and who show that the inventories, including the installations in their establishments, do not exceed 2,000 gourdes, or $400 in value.
Incor:e taxes are determined by two methods as a fixed lump sum or according to balances. Private individuals and partnerships first pay the tax on the fixed basis. If i.n examination of their books shows that the balance sheet basis would bring more revenue to the State, they are sent a supplementary tax bill (article 6).
Tc system used for corporations is the opposite of that for other taxpayers. They pay the tax directly in accordance with their balance sheets (;:rticle 5). Only as a penalty may the State collect on the lump sum basis.
1) The lump sum basis
The lump sum basis has no relationship to the profits or losses of
a merchant or industrialist, hence his books are not examined to determine the tax. The rental of the building occupied for his particular commerce or industry is multiplied by 5 and the figure obtained represents the taxable income. For example, if a merchant pays l100 a month rent, that makes $1,200 a year. This figure mutiplied by 5 gives ',6,000. Without deductions for general expenses, otc., the $6,000 is taken to represent
the net income end the tax is a certain percent of that amount.
The tax levied on this basis is payable in advance, beginning on
October 1 of the Fiscal year, and is payable half by October 30 and half by the following April 30 (article 4).
2) Balance sheet basis
Income tax based on the b lance sheet is figured at the cud of the financial year of the tax-payer. It is determined by an examination of his books and other accounts.
3) Stamped account books
According to Haitian law account books before use must be stamped by the Tax Office and approved and initialed by a Court. An unstamped, non-
approved and uninitialed account book is not acceptable and may not be used for calculating income tax, nor in court litigation.
The books that must be stamped, checked and initialed are the
journal and the inventory ledger. Article 11 of the decree-law concerning income tax provides penalties for improperly kept accounts and prescribes the manner of making entries in the inventory ledger (articles 8, 9, and 10 of the Commercial Code).
Article 8 of the above mentioned decree-law indicates what expenditures may be deducted from grosprofit to arrive at the not profit. Such deductions must represent normal charges and expenditures. Gifts made to charitable undertakings in the name of the firm, club expenses, and bonuses given to employees do not constitute deductible expenses or charges. Article 8 contains a list of certain deductible charges and expenses, but it is not limitative.
3. Schedule of taxes in individual incomes
Article 7 of the decree-law of Mlay 2, 1942, as amended August 13 of that year, establishes the following tax rates on individual incomes:
All incomes equal to or below 5,000 gourdes, on the Tull
amount ... ......... ...... ...... ... ...,... .. .. 3%
All incomes above 5,000 gourdes but not over 10,000:
a) on the first 5,000 .............. .. ... . ..**. 3%
b) on the excess.,...................... . ...... 4%
All incomes above 10,000 gourdes but not over 15,000 on
the full amount ......................., .... ........... 5%
All incomes above 15,000 gourdes but not over 30,000:
a) on the first 15,000. *........ ...... .......... ... .4 5%
b) on the excess..... ................... 8%
All incomes above 30,000 gourdes but not over 100,000 -on
the full amount ......................................... 12%
All incomes of over 100,000 gourdes on the full amount..15%
The tax is applicable to commercial and industrial companies and also to individual merchants and manufacturers, excepting corporations (soci6t6s anonymes). According to the amendment of August 13, 1942, corporations are taxed at the following rates:
All incomes equal to or below 50,000 gourdes.,.......... 12%
All incomes of over 50,000 gourdes:
a) on the first 50,000 .................... '.. 12%
b) on the excess ........................... .......... 15%
4. Tax Exemptions, Capital, Subsidies, Concessions, and Registration Charges
1) Tax Exemptions
No exemptions from internal taxes-are provided for in Haition fiscal laws, except in the case of income tax, hero the value of the installations and stock of merchandise of a merchant does not exceed 2,000 I
gourdes ($400) (See article 2 of the decree-law of May 2, 1942).
There are no reductions in taxes, To encourage the development of certain enterprises the Government, in some cases, by contract has given assurance that taxes will not be increased for a stated period. Such contracts must be approved by a law or a decree-law.
There are no restrictions on the importation of capital.
The Government has granted no subsidy to any existing company, butcontracts with the Government may provide exemptions from certain taxes, particularly import duties on materials and equipment.
The Government may grant concessions, which must be approved by a law or decree-law.
5) Taxes for registration of new companies
In addition to those taxes already mentioned, it should be noted that when a commercial or industrial company is formed it must pay a fixed charge of $0,40 for registration of the act of organization and $3.00 for notification to the commercial tribunal.
5. Tax Administration
In Haiti, the two organizations that deal with taxes are the Gustom Service and Internal Revenue Service. The former collects the duties as provided in the customs tariff. The Administration Gen6rale des Contributions collects the income tax and other internal revenues and the local
r 19 T
or communal taxes. The only local tax directly affecting commerce or industry is the fee for business permit. There are no departmental taxes, no excess profits tax, nor tax on capital or property.
There is however a rental tax collected annually, equivalent to 3,
3 1/4, or 3 1/2, percent of the yearly rental value of buildings located in cities and tovns. It is covered by decree-law of September 23, 1935 (article 1).
1. The law applicable to agricultural activities
Agricultural activities of enterprises and individuals are governed by civil law just as are those by which they dispose of the products of their lands and animals, whether in original or converted form' In purchasing produce from others for re-sale along with their own produce, whether in original or converted form, they becme subject to the terms of commercial law relating to purchased goodsJ Likewise, the purchase of fertilizers and seed by a former in quantities greater than needed for
his own farming operations, with an idea of re-selling the surplus, also subjects him to the terms of commercial law. However, these transactions are not necessarily to be subject to the commercial law unless customarily or repeatedly carried on.
2. Equal rights for foreigners and Haitians
Foreigners are free to develop agricultural property or enterprises in Haiti, enjoying in such activities the same rights as nationals of the country.
There are no legal provisions which require that a certain percentage of the employees or workers in agricultural activities or enterprises be of Haitian nationality. Likewise, there are no restrictions on the amount of foreign capital that may be invested in such activities.
Individual agricultural activities are exempt from payment of any business permit (patente) or license (licence) fees. Corporations engaged in agriculture pay the same fees as commercial corporations.
The local business permit fees payable by foreign corporations amount to 300 gourdes ($60) plus 60 gourdes (012) for social security and 1.35 gourdes ($0.27) for stamp tax, a total of 361.35 gourdes ($72.27). The national license fee amounts to 375 gourdes ($75) plus 10 gourdes ($2) for the stamp tax, a total of 385 gourdes ($77).
Other taxes (income tax, etc.) are the same as for other companies.
Here again, a guarantee against any future increase in taxes is obtainable only in a contract with the Government. Since this concerns
both agriculture and finances, the two interested Government Departments must participate in drawing up such a contract.
Operation of minos, pits and quarries are governed by decreelaw of December 1943, and are regarded as commercial activities. This decree-law is a coordination of previous provisions relating to mines and is the only mining legislation now in force. Mines, pits and quarries arc defined in articles 4, 6, and 7 of the decree-law:
1. State and private ownership
By law, all mines and quarries which can be exploited only by underground passages are the private property of the State4
Pits and quarries which can be exploited by means of opei cuts belong to the surface owner.
The following summary concerns only mines and quarries which are the private property of the State.
2. RTilcg. concerning r r ,cct ing
The rules concerning prospecting are foLund in articles 16 to 30 inclusive of the decree-law of December 1943.
With the exception of a surface owner who has the right to make
excavations on his property, a prospector may not undertake preliminary work of excavation, prospecting and drilling except by a permit granted by the Secretary of State for Public Works, after approval by the Cabinet.
The law provides for two types of permits:
) Sinnlo prospoctin$p mor-iit
Upon payment of the fee prescribed, a simple prospecting permit, valid for one year, is granted. It may be renewed free of charge, for another year. It gives the right to undertake any prospecting and drilling in any part of the country. It may not be transferred except upon authorization by the Cabinet.
The holder of a permit who makes excavations for the discovery and conservation of deposits must reimburse the surface owner for damages. In certain cases (article 28) he may carry on Work only upon authorization of the Secretary of State for Public Works.
All holders of permits enjoy the same rights (article 29).
Substances extracted by a permit holder may not be sold or
utilized without authorization by the Secretary of State for Public Works.
2) Exclusive permit
For prospecting for one or more specific substance an exclusive
permit is granted upon payment of a fee of 1,000 gourdes. It is valid for a maximum of three years. It accords an exclusive right to prospect in a definitely determined area.
3. Rules Coverning exploitation of mines and quarries
The following may exploit mines and quarries:
1) The holder of a temporary exploitation permit;
2) The holder oi a concession;
3) State intervention.
1) Temporary exploitation permit
This permit, according to articles 31 to 42, constitutes a temporary authorization to exploit a mine. It is issued by the Secretary of State for Public Works only to holders of prospecting permits who intend to engage in preliminary mine work, upon payment of a fee of 1,000 gourdes. It is valid for one year, renewable by payment of a fee of 500 gourdes
Each application for a temporary exploitation permit must be accompani-< by a sketch of the teri'ain in which the exploitation is to' take place. A permit shall list the rights and obligations of the holder. A temporary exploitation permit may be transferred only to a holder of a prospecting permit.
A permit may be revoked by the Secretary of State for Public Works:
1) If it has expired and has not been renewed;
2) If the work authorized is not duly carried out.
2) Mining concessions
According to articles 43 to 77, the holder of a concession has the
exclusive right of exploitation and is the owner of the products obtained.
Articles 51 to 52 indicate how a concession must be obtained.
All concession holders must deposit with the Banque Nationale de la
Republique d'Haiti a guarantee of not less than 25,000 gourdes for mining concessions, or 5,000 gourds for quarries.
If exploitation of a mine or quarry is not begun within the time limit determined in a concession, it is revoked and the guarantee reverts to the State; otherwise it will be returned to the concessionaire.
4. Rules governing concessions
The following is a summary of the rules relating to concessions for mines and quarries.
1) The Government is entirely free in the choice of concessionaires, be they surface owners, discoverers or others having no previous rights.
2) A concession is temporary, with a maximum of 60 years for mines and 40 years for quarries.
3) A mine bestowed by concession becomes a new property which may be mortgaged. However it may not be divided or sold in lots without prior authorization by the Government.
4) The exploitation of a mine is subject to control by the Bureau of Mines of the Department of Public Works.
5) A concession gives the right to occupy and utilize any portion of the surface necessary for the exploitation (articles 59 and 66) aid also the right of expropriation (article 62). It also gives the right to establish means of communication or to construct docks and wharves if needed in exploitation.
6) Free customs entry is granted to concessionaires for articles needed for the installations and operation of the enterprise* However, spare parts and accessories and replacements are subject to import duties, although free entry is extended for instruments, materials aid medicines required for hospitals or dispensaries which concessionaires must install.
7) A concessionaire must pay:
1) To the State
a) A fixed royalty of a minimum of one gourde per year per
hectare (articles 65 and 69).
(However, the contract of concession may stipulate repayment
to the concessionaire of the amount of the surface tax on
any portion of the concession actually exploited, beginning
at the tine such exploitation ic commenced);
b) A royalty proportional to the gross value of ore removed
(articles 66,67, and 68);
2) To the surface owners
A royalty for use of the surface of not less than 5 percent
nor raore than 10 percent of proportional royalty paid to
the State (articles 78 to 82);
3) To the discoverer
a) A royalty of not less than 10 percent of the proportional
royalty paid to the State (article 50);
b) Reirabursenent of expenses involved in making the discovery
Haitian law contains no restriction or prohibition against a foreigner engaging in either the prospecting or exploitation of mines and quarries.
The law does not require that a given percentage of the labor
employed be of Haitian nationality, nor is there any restriction in regard to capital invested in mining enterprises.
However, employment by a concessionaire of foreigners as technicians or skilled workers must be authorized by the Secretary of State for Public Works, such authorization is for a period of two years, renewable indefinitely (article 71).
In practice, a concession contract fixes a percentage of Haitians to be employed in such enterprises.
Although, as previously-stated, the law of December 20, 1943, is the sole law governing mines, pits and quarries actually now in force, article 5 of this law provides that the exploitation of hydrocarbons, coal and other miners substances used for fuel shall be governed by a special law. However to date the Governmcnt has not presented a project for such a law to the Legislative Body.
In regard to taxes, there is the decree-law of November 14, 1940, which imposes an internal tax of 0.78 gourdes ($0.156) per gallon (3.7853 liters) of gasoline obtained from crude petroleum refined in Haiti. This tax is equal to the customs duty on imported gasoline.
In addition to the taxes referred to gbove, mining operations are subject to the license taxes if the enterprise is foreign, and to the income tax in accordance with the principles described elsewhere.
1. Validity recognized by the Constitution
The validity of monopolies is recognized in the Constitution of Haiti and they are not forbidden by law. It should be noted, however, that the Government grants a monopoly only in extremely rare cases, when the public interest so demands and when, without such monopoly, an organization could not operate; as for example a monopoly granted a company to supply electricity to the city of Port-au-Prince,
2. Procedure for obtaining a monopoly
To obtain a monoply, application must be made to the appropriate Ministerial Department and if the applicant can show the necessity for a monopoly the terms of a contract are agreed upon. It is then submitted to the Conseil des Secretaires d'Etat (the Cabinet) for approval. If the Cabinet approves, a special authorization for signature of the contract is issued by the appropriate Secretary of State4 The contract is then submitted to the Legislature for ratification if it is in session, and if not, to the Permanent Committee of the National Assembly. A contract becomes effective only after such rat if i cation.
3. State Monopolies
Trade in gold is a State monopoly. Gold purchases may not be
made except by the Banque Nationale'de la R~publique d'Haiti, a State bank (Decree-law of August 9, 1941). The lottery is also a State monopoly.
4. Special Concessions
Mines may be exploited only under a special concession from the Haitian Government (Decree-law of December 20, 1943). Banks may operate only after obtaining authorization from the President of the Republic (Decree-law of Tune 24, 1940). In these matters the State thus exercises direct control over the operation of such enterprises.
A concession is granted by the State to permit a concessionaire to have exclusive rights to operate in an area determined by contract. it is granted only when the public interest so requires and if the State believes that the applicant is in a position to operate the concession successfully.
Social legislation in Haiti is still in an embryonic state since it is only within the last few years that the subject has received serious consideration, Certain regulations, however, have been adopted.
1. Legislation for the protection of labor
The law of April 21, 1939, requires that every person should posses an identity card.
1) Hours of labor
Article 12 of Decree-law of August 16, 1934, on labor,provides
that the working day shall be eight hours, although the parties concerned may agree between themselves on overtime by day or night.
Article 13 provides for 24 hours rest per week which should be Sunday unless the public interest or the successful operation of an establishment require that it be some other day.
2) Holidays and vacations
Workers and employees generally, regardless of whether hired by the day, by the hour, by the job or on piece work must be given ,such holidays and days' of rest as are authorized by Presidential decree, without loss of wages. They must be given 15 days vacation per year, at one t ime.
3) Minors and 1. regLnant women
An employer is prohibited from hiring minors under 15 years of
age (article 16). A pregnant woman must be giv-en leave with pay amounting to three weeks prior to childbirth and three weeks thereafter (article 17).
4) Minimum wages
The minimum wage for all manual workers, employed by the-job or in piece work is two gourdes per day (decree-law of December 24, 1945).
5) Medical ;are
Article 19 of the decree-law of August 16, 1934, requires that
Haitian or foreign employers hiring more than 100 persons must provide a dispensary in charge of a Haitian physician and equipped to give first aid in case of accident.
Other than the above, there is as yet no legislation covering work accidents.
6) Social Security Fund
Docroe-Law of May 15, 1943, created a social security fund; this fund is obtained through the compulsory contribution of $0.20 per fortnig1t by all viorkers employed in agricultural etGrprisos 'cnploying: ovcr fifty laborers.. The fundc is used to pay supplementary compensation in case of accidents, for the creation of an almshouse, etc.
There are no laws providing for tensions except for employees and officials of the Government.
7) Percentage of Haitian employees
In general, in contracts made between the Government and individuals or firms, the Government fixes the percentage of Haitians to be employed in an enterprise; otherwise there is no special legislation.
The Departments of Labor and National Ecoramy and the Ditection Generale of Agriculture are the agencies handling labor matters.
8) Trade unions, strikes and disputes
No legislation exists concerning trade unions or workerst
organizations There is likewise no legislation in regard to strikes or
the settlement of disputes between employers and workers.
Haiti has never exercised control of exchange, The value of the
gourde has been pegged at five gourdes to the U.S. dollar since 1915-16,
Although banknotes issued by U.S. Federal Reserve Bahks are not legal tender, they are readily accepted in Haitian cities.
REAL PROPERTY RIGHTS
1. Agricultural and forest lands
Article 7 of the Constitution provides that tha right to own
property is guaranteed to citizens. Expropriation of real property for reasons of public necessity or utility may not be resorted to except by payment to the owner or registration of his right to prompt and fair compensation. But ownership of property likewise involves obligations. The use that is made of it must be in accord with the generl interest, A landowner has a duty to his community to cultivate and develop the soil. Punishment for ignoring this obligation is provided by law. The principal agrarian laws are:
1) The law on property (Civil Code) which defines the right of ownership and governs the right of accession, that is, a right to the natural or industrial products or movable or real property, and to natural or artificial improvements, constructions, plantings, alluvial or other accretions, etc.
2) The law on usufructs, usage and occupation (Civil Code).
3) The law on property administration dealing with encumbrances affecting the interests to other persons due to natural conditions and circumstances such as water rights, boundary lines, or fences, either by reason of obligations imposed by law or understandings between property owners.
i) The law concerning the different ways by which property is acquirod (Civil Code), that is: inheritance, gift by will or between living persons, result of obligations salon assignment, accession or incorporation and prescription; and Law No. 21 on sales (Civil Code).
5) Law No. 23 on rental contracts (Civil Code): lease of rural and urban property, lease of livestock.
6) The law of December 11, 1922, concerning land survey commissions and investigating commissions charged with investigating the depredations, thefts and frauds of which rural inhabitants and the State may be victims with respect to their property rights.
7) The law of December 21, 1922, concerning long-term leases of State-owned lands for periods varying from 9 to 30 years. Such leases may not be made except for agricultural purposes and in accordance with the provisions set forth in the law.
8) The law of February 3, 1926, concerning national forest reserves, declares that they are inalienable.
9) The laws of July 26, 1927, -and May 28, 1928 concern State
domains, to wit: the public domain, ihich is inalienable and imprescriptible, and its private domain, which is imprescriptible but is alienable. The first of these laws fixes the conditions by which lands of the State's private domain may be leased, and the second governs claims to vacant lands occupied and leased by the State to private individuals Under the terms of this law the State may prescribe the title
of individuals after 10 years, whereas the usual prescription period in regard to real property is 20 years.
10) The law of January 12, 1934, concerning rural family property, grants a maximum of 5 hectares to Haitian far~aers. Such property is
unattachable and that status is extended to buildings and other improvements constructed on the property, as well as any installations, implements, farm tools and animals conducted with the undertaking.
11) The supplementary law of September 4, 1934, provides for exemption from the required period of residence in the granting of rural family property, Haitian farmers who have themselves occupied and developed the land for ten years.
12) The law of June 3, 1936, protecting from eviction by third parties, all farmers having 50 or more hectares under authorized registered lease, and who work the land for agricultural purposes.
13) The law of Ylarch 5, 1937, requires that the Minisiere Public be notified of all judgments by default which involve expropriation, removal or expulsion of an inhabitant from rural areas.
14) The law of April 18, 1939, concerns undeveloped lands, provides for an annual tax of 5 to 10 percent of their estimated value, according to area, and stipulates that in case of non-payment of this tax within ten months the land will be sld at auction. This law has never been enforced.
2. Acquisition of public lands
Public lands may be acquired through sale, which must be-authorized by a specific law, as indicated in article 18, law of July 26, 1927; and the same article, as amended June 17, 1941, prohibits transfers.
Under laws of January 12 and September 4, 1934, concerning family rural property, grants for at least five hectares may be made only to
Acquisition of state lands by prescription is prohibited (article 4 of the law of October 28, 1864, and article 3 of the law of July 26, 1927).
3. Fees and taxes collected on land purchases, possession or rental
Taxes on sales of real estate (law of July 4, 1933) are:
Registration ................. 2%
Transcription ................ 1%
Certificate of transcription G 2.50 Notarial fees, 50 lin~s ...... 4.00 Stamp tax per G 100 .. ........ 0.10
On leases for over 9 years or less if paid in 3 year periods or over, the fees are:
Registration l.......... 1%
Transcription ...... 1
Notarial foes, 50 lines ...... G 4.00 Certificate ....... G 2-50
Stamp tax, per G 100 ......... G 0.10
Other leases pay merely the registration fee and stamp tax.
4. Rights of foreigners to purchase or use land
In brief, article 8 of the Constitution and the law of February 13,
1925,provide that a foreigner Piay own real property only for his own needs as residence or for agricultural, commercial, industrial or educational pursuits. Hence a foreigner does not have the right to rent real estate to others.
Regulations regarding trademarks is provided by the law of Docember 18, 1922, and by the Inter-American Convention of February 20, 1929.
The assignment or transfer of trademarks is governed by the law of March l, 1937.
Legislation on patents for inventions is covered by the law of December 14, 1922.
The maximum validity of registration of trade marks and patents is 20 years, although if registration was already made elsewhere, the number of years of protection accorded in that country shall be the basis for the duration of such protection in Haiti.
The registration fee for trademarks is set at $15 regardless of the petod of validity. The registration fee for patents varies in accordance with the period of validity. It is 025 for registration for five years; 050 for ten years and 4100 for a period of twenty years.
In addition to the fee, an applicant must convey special power to his representative charged with obtaining registration, and this is to
be accompanied by throe facsimiles of the patent or trade mark.
With the exception of the provisions covering maritime insurance, in articles 375 to 431 of the Commercial Code, there are no regulations governing insurance in Haiti. However, the use of both life and fire, as well as other forms of insurance under the terms of American, English, and other policies, have become fairly widespread.
There is a registration fee or 2 percent on all payments made to insurance companies.
Article 39 of the law of July 4, 1933, provides a special fee of two percent to be collected on all payments made to insurance companies for redemption of policies or premium installments, regardless of type, conditions or agreements. To assure payment of this fee all such transactions must be registered, under penalty of a fine of double the fee.