Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
Haiti is strategically well-positioned in the Caribbean near many of the world’s major ports, with maritime transport to the United States possible within three days, Panama within five days, and Europe within 10 days. With two international airports in Port-au-Prince and Cap Haitian, Haiti can serve as a strategic hub for businesses and materials alike. It is a 90-minute flight from Miami and Fort Lauderdale, enabling frequent direct supervision trips for U.S. investors.
U.S. companies have several options for entering the Haitian market, including direct exporting, franchising, partnering, licensing, wholesaling, and through representatives. The five main regional markets in Haiti are: the North province including the city of Cap Haitian; the Artibonite Department and its main cities, Saint-Marc and Gonaives; the West Department where the capital, Port-au-Prince, is located; the Central Plateau with the cities of Hinche and Mirebalais; and the South and South-East Departments and their main cities, Les Cayes and Jacmel. Rural retailers generally travel once or twice a month to larger cities such as Port-au-Prince or Cap Haitian to purchase food and other imported products from wholesalers who import primarily from the United States, Europe, China, the Dominican Republic, and Panama. Products in Haiti are generally distributed through regional wholesalers, who in turn supply small and rural shopkeepers. Most of these transactions are paid for in cash. Businesspeople complain of the inconsistency of customs in which taxes are assessed. This causes uncertainty and makes trading cumbersome.
Road access remains problematic for national distribution of products due to gang clashes around some national roads connecting Port-au-Prince to other departments of the country. The National Route 2, which connects the Port-au-Prince to the great south, has been completely blocked by armed gangs. All traffic between the two regions is difficult and perilous, which delays the distribution of products and crucial aid. This leaves businesses to resort to costly road crossing fees, or maritime transport.
Frequent flights between Haiti and south Florida, as well as some other U.S. locations, provide an opportunity to strengthen commercial opportunities. American Airlines, JetBlue, and Spirit all have daily flights between Port-au-Prince and their respective hubs in Miami, Fort Lauderdale, and New York JFK. The airlines seasonally offer direct flights from Port-au-Prince to Boston, Orlando, and Newark. Spirit airlines offer daily flights from Fort Lauderdale to Cap Haitian. Missionary Flights International (MFI) makes regular bi-weekly flights to Haiti transporting supplies, missionaries, their families, and the missionary airline Agape also makes regular flights to Port-au-Prince. IBC Airways, based out of Florida, provides cargo flights to Cap Haitian. Air France has temporarily suspended its flights to Miami until further notice.
Sunrise Airways provides connections between Port-au-Prince and several major provincial cities mainly Cap-Haitian, Jeremie and Les Cayes. Some private jet owners provide interdepartmental flights using old, poorly maintained planes, without official operating authorization, nor commercial flight license. It is strongly discouraged to charter from these operators.
Although the Haitian government is prioritizing infrastructure development, its roads, electricity grids, and water systems are in poor condition. Auto routes remain the primary conduit for the movement of goods in Haiti, leaving businesses dependent upon often-unpaved interior routes vulnerable to delays and impasses.
Using an Agent to Sell U.S. Products and Services
Many foreign firms conduct business in Haiti through local agents and distributors. Under Haitian law, two parties are free to negotiate a contractual agreement and do not require the government’s supervision or approval. Agents are usually compensated on a commission basis. A good local agent may play an important role for U.S. companies as they have detailed knowledge of local conditions. The Haitian Ministry of Commerce and Industry may also assist with identifying local agents. The Haiti Service Provider (HSP) portal provides a list to international investors looking for suppliers to support their businesses in Haiti. Foreign businesses should conduct due diligence when selecting a local distributor or agent.
The U.S. Embassy in Port-au-Prince is available to assist U.S. exporters to find agents and distributors through the U.S. Department of Commerce International Partner Search (IPS) program. It is prudent to choose an agent or distribution and sales channels distributor after visiting Haiti to survey the situation and interview candidates firsthand. Other fee-based services carried out by the U.S. Embassy’s Commercial Section include company profile reports, the Gold Key Service, single company promotions, and contact lists.
Establishing an Office
The Center for the Facilitation of Investment (CFI) is Haiti’s national investment promotion agency, mandated to promote investments and help potential investors find and take advantage of opportunities in Haiti. Created by presidential decree on January 31, 2006, the CFI functions as an independent bureau under the Ministry of Commerce and Industry. The CFI’s mission is to work to attract investments that contribute to the development of the country, diversify the economy, strengthen supply chains, and stimulate job creation. Although the CFI has proposed the development of a “one-stop” project for streamlining the process of doing businesses in Haiti in the past, this project has not come to fruition. While a local partner can assist with navigating the challenges of Haiti’s business environment, care should be taken to ensure bona fides, particularly when doing business remotely, as corruption is endemic in Haiti (see “Due Diligence” section).
Rules for establishing a business include the following:
All companies incorporated in Haiti must have a minimum of three shareholders; one must be a Haitian national and a company board member;
Haitian legislation does not establish a minimum requirement for Haitian nationals to own shares of capital stock; and
The founding members of the corporation must establish nominal value for the capital stock.
Commercial rent prices vary greatly depending on the area and departments. Costs are usually per square meter with with either monthly or yearly payment plans.
There are no specific regulatory laws for franchising. The government does not restrict private citizens from establishing franchises. Franchising is still relatively new, with only a few U.S. businesses penetrating the Haitian market. U.S. companies with franchises or affiliated local partners include: Office1 Superstore, Radio Shack, Federal Express (FedEx), Culligan Water Technologies, Coca Cola, Pepsico, NAPA Auto Parts, Avis Rent-a-Car, Hertz, Dollar, Thrifty, Budget Car Rental, Crowley, Domino’s Pizza, Amazon, and Marriott. While U.S. franchises such as Holiday Inn and Kentucky Fried Chicken came to Haiti in the 1980s and 1990s, one issue these brands faced was customizing to the local preferences.
Product marketing is an underutilized U.S. business opportunity. Many small Haitian producers make quality products ranging from foodstuffs to beauty products, but need help to market them to national and international audiences. Although the products are successful and are certified in Haiti, many brands lack recognition beyond the local communities they service. Products are often marketed using word-of-mouth, radio, mobile phone ads, printed journals, billboards and road signage. The internet, social media, and mobile phones are emerging as important marketing media.
Direct mail marketing is practically non-existent in Haiti considering that Haiti’s postal service lacks the funds to operate at full capacity. Haiti has several well equipped marketing agencies including Blue Mango Studios, DigiPub, and Dagmar.
Foreigners are free to enter into joint ventures with Haitian citizens. The distribution of shares is a private matter between partners. Foreign companies are free to own private property in Haiti, and there are no restrictions on the repatriation of profits. The law does not, however, permit foreigners to own property or buildings alongside national borders, including the Haiti/Dominican border and maritime borders. Foreign citizens purchasing land in Haiti should be aware that Haiti’s cadaster has not been effectively maintained and land disputes are common.
Courier services are available in certain areas of the country, mainly in Port-au-Prince, through international and local express delivery companies. The most popular ones include DHL, FedEx, TNT, and UPS. They are widely used by individuals and businesses for the shipment of spare parts, clothing, and gifts. The average delivery time from the United States to Port-au-Prince and vice-versa is one to three days, with about a two-day delay for packages that require customs clearance. Haitian customs may apply a 30 percent tax on packages valued over $50.
Some local and American companies provide weekly shipping service to Haiti’s largest cities. These companies provide a U.S. address, mainly in South Florida to Haitians who want to order online from retailers that don’t deliver to Haiti. The orders are consolidated and delivered locally on clients’ requests for a fee.
Due to corruption, intellectual property protection, and other concerns, it is always advisable to conduct due diligence on potential partners in Haiti. U.S. firms interested in doing business in Haiti should respond to trade opportunities and review market research information published on the U.S. Department of Commerce website. Foreign businesses should take care to ensure bona fides and maintain records such as receipts and acknowledgements of payment in dealing with both the government and commercial or non-profit enterprises (see “Market Entry Strategy”).