Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Although Haiti offers an open economy in principle, there are serious barriers to commerce and foreign investment in the country, including corruption, gang violence, political instability, and a burdensome bureaucracy. The World Bank’s 2020 Ease of Doing Business report issued Haiti a score of 40.7 out of a possible 100, resulting in a ranking of 179th out of 190 countries on the list. As of September 16, 2021, the World Bank Management Group decided to discontinue the report, however archived knowledge and data remain available.
U.S. firms entering the market in Haiti will face multiple challenges. The lack of reliable security, electricity, fuel, and water often means companies provide their own supplies. Armed gangs frequently disrupt business transportation routes resulting in significant losses of revenue, decreasing profit margins, and high overhead costs. During 2021, many businesses reported difficult and slow customs clearance processes, which resulted in long waits for imported products to become available. Companies often arrange for a local agent who can facilitate the process. Corruption often affects business activity. Laws are applied inconsistently, and the judicial process is slow. Companies as a result often find a local legal advisor necessary.
The most common concerns expressed by foreign investors include:
- Political instability;
- Insecurity, crime, and gang violence;
- Road blockages
- Fuel shortages;
- Recurrent strikes in public offices;
- Unavailability of foreign currencies for exchange;
- Widespread corruption;
- Lack of transparency in governmental tender procedures;
- Unreliable electricity from the grid and high cost of onsite electricity generation;
- Haiti’s need for improved port entry and generally poor infrastructure, including a lack of internet connectivity;
- High obstacles to credit and the lack of a national credit bureau, and
- Frequent land disputes, in part due to the lack of effective cadastral and civil registries, as well as inefficient civil dispute resolution.
Given the challenging business environment and despite investment-friendly policies, Haiti usually receives relatively modest levels of Foreign Direct Investment (FDI). It has recently experienced over a 100 percent increase, from $23 million in 2020 to $50 million in 2021, according to The United Nations Conference of Trade and Development (UNCTAD).
Haiti’s official languages are French and Creole. U.S. companies seeking to do business in Haiti may require interpreter services when interacting with official public offices.
Fuel The retail prices for gasoline, diesel, and kerosene are fixed in gourdes by the government at a rate that usually requires government subsidies to maintain. This subsidy and its contribution to the government’s budget deficit exert considerable negative pressure on the value of the gourde. Haiti continued to experience recurring disruptions to its fuel supply throughout 2020 and 2021, with the government unable to pay for fuel imports in a timely manner and recurring insecurity interfering with fuel distribution. The government began allowing locally-based fuel companies to import fuel directly in April 2019. The state has disengaged from orders for petroleum products. With the market liberalized, the companies place the orders with the Monetization Office of Development Assistance Programs (BMPAD) which launches tenders for the premium every two months. The government continues to struggle to reimburse fuel distributors for the cost of the subsidized retail fuel price. In December 2021, the government partially removed oil subsidies, hiking retail fuel prices by 74.3 percent on average. Haiti has been experiencing fuel shortages since the price of petroleum soared in the international market. The shortages contribute to instability, pressure at pumps, and the growing fuel black market. Companies can purchase a limited quantity of fuel cargo, and due to the excess price of petroleum products since the start of the Russian invasion of Ukraine companies cannot purchase fuel. Despite the shortage the official market price of fuel in Haiti is lower than the international market at 250 HTG/gal (U.S. $2.22).