CARIFORUM and UK EPA Study

of third country entities within the UK supplying services to UK nationals, which is an important point of departure for any assessment of the potential attractiveness of the UK market for CARIFORUM investors and investment. This, however, has to be considered against the UK’s investment regulatory environment, and particularly whether the relevant provisions of the CARIFORUM-UK EPA create an enabling environment for CARIFORUM investment in that country. As it turns out, the UK’s investment commitments under the EPA provide largely unrestricted access to the UK market, with a few sector specific and horizontal limitations. First, it should be noted that the UK’s limitations on the legal form of banking and financial services entities will likely have an impact on the level and extent to which CARIFORUM investors are able to participate in the banking and financial services sector in that country, as the prevailing higher tax obligations may not justify the cost of commercial establishment in the UK. Similarly, the general limitations on the treatment of subsidiaries vis a vis branches or agencies of CARIFORUM firms located in the UK, will result in a broader level of restriction on CARIFORUM’s participation across a wider range of sectors within the UK market. This is due to the higher costs that will be imposed on potential regional investors, through the wider applicability of domestic tax liabilities on the international activities conducted by subsidiaries relative to branches established in the UK. In addition, while the supply of maritime transport services to the UK via CARIFORUM flagged vessels remains feasible, the UK’s nationality restriction related to the acquisition and ownership of UK flagged vessels will limit CARIFORUM’s full ownership and control of commercially established maritime transport entities in that country, and prohibit regional suppliers from attracting third country investors that may be interested in partnerships to supply such services to the UK utilizing the EPA.

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