Home' Trinidad and Tobago Guardian : December 12th 2013 Contents DECEMBER 2013 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
Varun Maharaj, the chief exec-
utive of the T&T International
Financial Centre, says he is con-
fident that the company can
fulfil its mandate to generate
3,000 new, high-paying jobs in the financial
services sector within five years.
Maharaj, a certified public accountant and
a chartered investment manager, joined the
TTIFC as CEO at the start of 2013 after spend-
ing seven years as an executive director at
ANSA Merchant Bank.
"Our estimate is that if we were to add the
3,000 jobs in five years, in the course of that
period, we could see being added to the econ-
omy in the region of $1.2 billion a year, given
the present propensity to consume," Maharaj
said in an interview with the Business Guardian
in his Port-of-Spain International Waterfront
Maharaj says the mandate of the IFC,
which is an investment promotion agency,
is to develop the country s financial services
sector "and in so doing, create long-term,
meaningful jobs that are well paid."
He said: "Our focus is to develop a new
industry, on the one hand, and on the other
hand, to develop the local capital markets."
Maharaj said the IFC s role is to contribute
to the diversification of the T&T economy.
Financial services currently contribute
about 14 per cent of T&T s GDP and that
sector has been growing faster than the aver-
age growth rate of the local economy.
Maharaj said the financial services sector
has been growing at a rate of between three
and four per cent per annum over the last
two to three years.
"The Government rightly decided that the
growth of the financial services sector should
be a priority of the country."
The specific segment of the financial serv-
ices industry that the IFC has been mandated
to push is the middle and back office aspects
of Business Process Outsourcing.
The development and deepening of the
financial services industry will tap into some
of the 17,000 tertiary-level graduates a year
that T&T is generating, Maharaj said.
He said another important statistic is that
T&T is estimated to have close to 6,000
people writing professional accountancy
exams at the various levels.
"We believe that that pool is underem-
ployed in T&T and by growing this industry,
we could put people to work," Maharaj said.
To drive the development of the middle
and back office segment of the financial
services industry, the IFC has attempted to
sell the competitive advantages of T&T in
this area to companies looking to outsource
part of their operations to a near-shore loca-
"We are looking for North American clients
who are looking for a location in the region
where they can outsource at a cheaper cost,
their middle and back office work," he said.
What T&T has to offer
Asked to outline the competitive advantages
that T&T has in attracting companies to out-
source their middle and back office operations
here, Maharaj said the educated workforce is
a key element.
But so is the cost of hiring finance pro-
"If you were line up the average cost of
hiring finance and other professionals here
against the cost in Costa Rica, Nicaragua,
the Dominican Republic and Jamaica, we are
cheaper because of the number of graduates
we are generating," the IFC chief executive
In addition to the cost of labour, he cited
the cost of electricity, which is much lower
in T&T than almost anywhere else in the
He also described the country s telecom-
munications infrastructure as being "robust
and on par with the first world."
One of the most important competitive
advantages that T&T has is a package of
incentives the IFC and the T&T Free Zones
Company have put in place to attract com-
panies looking to outsource their middle and
back office work.
Changes to the free zone legislation mean
those entities are no longer tied to a specific
location. Any location in T&T can be des-
ignated as a free zone and qualify for the
benefits and incentives provided by the Gov-
ernment as long as at least 50 per cent of
their output is dedicated to external markets.
Companies defined as qualifying for free
zone status do not have to pay corporation
taxes, withholding tax, Value Added Tax, land
and building taxes or taxes on the distribution
of their profits, said Maharaj.
"And there is no time limit for these fiscal
incentives. Other countries have stipulated
that their concessions last for five or seven
years, but we have no time limit on ours.
That adds to the value proposition of T&T,"
Asked how the country would benefit from
this new industry if the Government is not
collecting any tax revenue, Maharaj said: "The
people employed in the sector will pay taxes
and the employment of a new cadre of finan-
cial professionals will generate a multiplier
effect. In addition, there will be a transfer of
knowledge as we develop this cadre of pro-
fessionals. Thirdly, there will be new foreign
direct investment flowing into the country."
Already, the IFC has managed to attract
Scotiabank and the Royal Bank of Canada
(RBC) to locate some of their middle and
back office operations in T&T.
Although both banks have operated here
for decades, Maharaj said they are doing new
work in T&T now.
"They are not new customers to T&T, but
they are both doing new work here now as
a result of the new package of concessions,"
said Maharaj, pointing out that Scotiabank
is doing work for the northern Caribbean
and some work for Canada. This has led to
the creation of close to 400 jobs. Similarly,
RBC has created jobs here to cater for external
The process by which a company sets up
an operation that it controls to do back office
work for the company are called captives.
According to Maharaj, what the TTIFC has
found is that the growth in the industry is
being driven by third-party, BPO (business
process outsourcing) providers.
"The world is no longer looking at captives.
The strategy that we are pursuing is really
one of matchmaking. If there is a BPO
provider that is interested in T&T, we are
attempting to match that provider with a
client in North America that is looking for
a near-shore location to outsource."
He said the process of matchmaking takes
longer than attracting a captive, but there is
significant interest in T&T.
Maharaj said: "I believe that in the next 12
months, we could see the creation of between
150 and 200 high-paying jobs in T&T. That
will have a domino effect because once we
get one or two of those large, global BPO
providers, the news will be transmitted
instantly to other players in the market to
start looking at T&T. So we could have some
significant job growth."
New IFC boss, Varun Maharaj...
We can create thousands
of jobs, add $1.2bn to T&T
Varun Maharaj, the chief
executive of the T&T
International Financial Centre
Howai on prospects
In delivering the 2014 budget in
September, Finance Minister Larry
"Over the past year, we have advanced
the building of a financial institution
shared-support services industry.
"In our 2013 budget, we committed to
creating 3,000 jobs in this sector within
the next five years.
"Following the tax incentive
framework put in place in the Finance
Act 2013, I have signed the order for
developing shared service centres in T&T.
"With the tax incentive framework in
place, T&T can now position itself as an
attractive destination of locating back
and middle office processing for financial
"In fact, during this year, close to 1,000
high-quality jobs were created in this
"Scotiabank T&T Ltd has already
employed close to 400 persons with
another 40 to be engaged in 2014. RBC
Royal Bank has employed 465 persons
with another 135 to be employed in
2014. RBC Royal Bank, which has been in
the process of streamlining its business
model, has been able to save the jobs of
approximately 400 additional employees
who were transferred to their shared
"In the coming year, we intend to build
on these successes and will commence
discussions with companies providing
services within the European Union to
facilitate the movement of similar-
shared services facilities to T&T," Howai
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