St. Vincent’s history dates back as early as 5,000 BC, although its most recent history begins in the late 17th century – when a shipwreck brought African slaves headed for America to the islands. These slaves, who stayed there and integrated with the native Caribs, have direct descendents even today on the island. The UK settled there in 1783, and although the islands became independent in 1979, they remain a British Commonwealth.
The administration of the islands is divided between Saint Vincent and the Grenadines and Grenada. Its government is a parliamentary democracy, presided over by Queen Elizabeth II, who is represented by a Governor General. The head of the government is the Prime Minister, who advises the Governor General on Cabinet appointments. The legislative branch consists of a unicameral House of Assembly.
The Saint Vincent legal system is based on English common law. The Eastern Caribbean Supreme Court is based on St. Lucia, with each country’s representative justice living in his or her own jurisdiction.
Agriculture: Sugarcane, rice, yams, vegetables, bananas; fish
Industry: Tourism, cotton, salt, copra, clothing, footwear, beverages
Exports: Bananas, eddoes and dasheen (taro), arrowroot starch; tennis racquets to France, Greece, Italy, Russia and the UK
Imports: Foodstuffs, machinery and equipment, chemicals and fertilizers, minerals and fuels from Singapore, Trinidad and Tobago, US, Italy, Spain, Turkey and Germany
Although St. Vincent and the Grenadines has much debt, their economic growth has been impressive for the Caribbean, mostly fueled by new construction, a sharp increase in tourism and a dedication to the offshore banking sector.
Fiscal year: Calendar year
Bank licenses are issued from the Central Caribbean Bank, headquartered in St. Kitts and Nevis, and can be a Class I or Class II. Class I requires USD$1 million, with half that amount held in deposit or invested. Class II requires USD$500,000 and USD$50,000 held in deposit or invested.
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Tax holidays of up to 15 years are the major incentive offered by St. Vincent, as well as duty exemption and profit repatriation. Almost any foreign investment – from financial services to technology to agriculture – is eligible for these incentive schemes.
The Aliens Holding Ordinance decrees that a government license is necessary in order for foreigners to own land on any of the islands. If the property in question is an acre or less, a foreigner’s application for the license must have a construction or development plan that shows completion within six months. If the property is more than one acre, all this is needed plus financing, construction crew hiring and architectural details must be included.
All salaries to XCD20,040 must have social security paid. The employee pays 2.5 percent, the employer 3 percent.
A valid passport and proof of return passage is needed to enter St. Vincent and the Grenadines, and non-residents upon exiting the country must pay a departure tax.
Businesses in St. Vincent and the Grenadines can be formed as an International Bank, International Business Company, International Insurance Company, International Trust, Limited Duration Company or a Mutual Fund.
International Trusts are safe from legal settlements and judgments only two years after their establishment. Before that time, creditors can make claims against a trust – but only after depositing USD$25,000 with a St. Vincent court and proving the purpose of the trust is to keep those specific assets from that specific creditor.
St. Vincent makes no distinction between citizens, residents and foreigners when it comes to personal income tax. All income over XCD15,000 is subject to tax levies, from 10 percent to 30 percent depending on a variety of factors. However, capital gains taxes, inheritance taxes and dividend taxes are not levied.
Corporations that register as “exempt” receive a 20-year tax holiday. “International” companies are tax-exempt. Corporate taxes are on a sliding scale from 10 percent to 40 percent, depending on a variety of factors.
There is a VAT of 15 percent and an excise tax, the amount of which varies depending on the item. There is a Hotel, Restaurant and Bar Sales Tax of 7%, and a Property Tax of 5%.
St. Vincent and the Grenadines are not a part of any double tax treaties, and in fact have a reputation for not complying with the tax authorities from nations around the world.