Saint Vincent and the Grenadines: a Whitelisted Offshore Jurisdiction

There are over countries and territories in the world that can be referred to as ‘offshore jurisdictions’ because they offer certain tax incentives to foreign entrepreneurs and require little or no reporting. Since the number of offshore jurisdictions is so high, choosing the best one can be hard. Should you prefer a long-standing offshore zone such as Seychelles or the British Virgin Islands or should you consider a European country that offers perks to foreign business people such as Latvia or Scotland? Tax optimization instruments are important but they are not the only thing that matters. The offshore country has to give access to financial services and instruments, have a stable political and economic situation, and enjoy a good reputation in the international community. Only a combination of these factors can make your offshore company prosper regardless of what business area it works in.  

St Vincent and the Grenadines in the Caribbean offers all advantages at a time. There you can find a wonderful infrastructure for engaging in international business operations coupled with a high level of personal information confidentiality. Since 1996, the corporate legislation of the country has contained many elements characteristic of offshore jurisdictions but it has been in compliance with the international regulations at the same time.

An ambitious business center in West Indies

St Vincent and the Grenadines is a relatively small country in the West Indies, Kingstown being its capital. It consists of the island of St Vincent and around 30 small islands called the Grenadines. The country is a member of the UN, the Commonwealth of Nations, the Caribbean Community, and all other important global and regional organizations.

St Vincent and the Grenadines has a long colonial history. It was a French colony first, and in 1763, the British took over. The country became independent from Great Britain in 1979 but it inherited the British Common Law. Officially, the King of England is head of state in St Vincent and the Grenadines but in practice, it is a fully independent country.

The regulations governing offshore business activities in the country were adopted only in the mid-1990s. The comparatively belated introduction of ‘offshore rules’ allowed the local Government to borrow the best practices from other offshore jurisdictions. On the other hand, it was able to keep away from the harmful practices that put some other offshore countries on black lists.

Traditions and innovations live together peacefully in St Vincent and the Grenadines. Probably this factor has turned the country into one of the leading financial centers in the West Indies. It has also contributed to the achievement of ambitious goals of the local Government to strengthen the economic system, boost economic growth, and improve the people’s lifestyle. The priority sectors for St. Vincent and the Grenadines today are agribusiness, tourism, financial services, light industry, and the IT sector. Investments into these areas are especially welcomed by the local authorities. You can learn more about business opportunities in St Vincent and the Grenadines by logging onto this website.

Tax system in St Vincent and the Grenadines

The tax system in the country differs from tax systems in many other offshore jurisdictions. The local Tax Code has some characteristics of onshore tax codes and some characteristics of offshore tax codes. If you launch a business company in St Vincent and the Grenadines, the amount of taxes that you have to pay will largely depend on the type of company that you set up.

International Business Companies (IBCs) are a popular offshore instrument that allows saving on taxes in some other offshore countries but not in St Vincent and the Grenadines. Below we list the key characteristics of an IBC registered in the country. Most of them actually serve as reasons against registering an IBC in St Vincent and the Grenadines.

1. First such form of company ownership as an International Business Company (IBC) has been unavailable in St Vincent and the Grenadines since January 1, 2019. Now you can register only a Business Company (BC).
2. Names of BC owners and directors have to be open to the public. The Financial Services Authority (FSA) has to be informed about their names and addresses.
3. BCs are taxed on their global income at the rate of 30%.
4. BCs have to do the reporting. Companies whose gross income exceeds 4 million per year have to submit annual Financial Statements. The same requirement applies to companies with an asset value that exceeds 2 million dollars.  
5. Companies with a smaller turnover and/ or lower asset value have to submit Declarations of Solvency annually.
6. Now BCs in St Vincent and the Grenadines have to keep detailed financial records that reflect all the business operations of the company. The records have to remain available for 7 years after the end of the financial year that they cover.
7. All Minutes and Resolutions have to remain available for 10 years after the corresponding Shareholders or Board of Directors’ meeting.

As you can see, registering an IBC is impossible in St Vincent and the Grenadines any longer and registering a BC there does not make sense.

An alternative form of company ownership in St Vincent and the Grenadines

Apart from a BC, you can also register an LLC (Limited Liability Company) in the country. Now this form of company ownership brings several important advantages and this is the form of ownership that will let you make some good money with a company in St Vincent in the Grenadines. The main characteristics of an LLC registered in the country include the following ones:

1. The company name has to reflect the form of the company ownership. That is, it has to end in ‘Limited Liability Company’ or LLC.
2. There are no requirements as to the registered capital: it can be as small as 1 dollar.
3. The registered capital can be in any currency.
4. An LLC in St Vincent and the Grenadines can have only one director who can be an individual or a corporate entity.
5. No company Secretary has to be hired.
6. Local LLCs are not taxable in St Vincent and the Grenadines.
7. LLCs do not have to disclose the names of the company owners and directors to the Business Register in the country.  
8. Company shareholders and directors can hold meetings anywhere in the world, not necessarily in St Vincent and the Grenadines.
9. LLCs do not have to file annual reports.
10. Registering an LLC in St Vincent and the Grenadines is extremely simple. Company registration takes 2 to 3 days from the date when the documents are submitted to the registration authorities.

Conclusion

St Vincent and the Grenadines is an offshore jurisdiction only in some sense, not in full sense. It does offer some advantages characteristic of offshore zones but not all of them. For instance, one more advantage that you can find in the country is the opportunity to offer brokerage services without having to obtain a license. This opportunity can hardly be found in any other country of the world.

The high level of confidentiality protection in St Vincent and the Grenadines does not affect the international reputation of the country. It has been on the OECD white list of countries since 2010 and it is going to remain there for a long time. Thus, doing business via a company (an LLC in particular) registered in St Vincent and the Grenadines is an option certainly worth considering.