Openness to, and Restrictions upon, Foreign Investment
The Government of St. Lucia strongly encourages foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens. The government has a number of incentive programs in place to attract foreign investment, available through the National Development Corporation, also known as “Invest St. Lucia,” the country’s the principal investment promotion agency.
Government policies provide liberal tax holidays, waiver of import duty and consumption tax on imported plant machinery and equipment, imported raw and packaging materials, and export allowance or tax relief on export earnings. Fiscal incentives are provided under various laws to encourage the establishment and expansion of both foreign and domestic investment. Investment promotion services are also provided by Invest St. Lucia.
All investment proposals are reviewed by Invest St. Lucia to ensure that the project is consistent with the national interest and provides economic benefits to the country. Invest St. Lucia provides “one stop shop” facilitation services to investors to guide them through the various stages of the investment process. St. Lucia is open to investment in the following sectors: tourism and hotel development, information and communication technology, manufacturing, international financial services, agro-business, entertainment, and any other economic activity. Additional sectors may also be subject to approval. Only government-approved projects can be established in St. Lucia. In the past, government officials have not always acted expeditiously in engaging on a potential investment.
Foreign nationals receive the same legal protections as local citizens. The police and court systems are efficient and unbiased in commercial matters, and the government operates in a generally transparent manner. The judicial system generally upholds the sanctity of contracts, although court proceedings can last years. St. Lucia’s legal system is based on British common law. The judiciary is independent, and trials are generally fair.
Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital. There is no general limit on the amount of foreign ownership or control in the establishment of a business. The screening of all investment is done through Invest St. Lucia, intended to be a “one stop shop” for both domestic and foreign investors. In addition to the National Development Corporation Act, which addresses government policy to attract investment, the Trade License Act, Aliens Licensing Act, Development Incentives Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Tourism Development Act, and Fiscal Incentives Act, all have some impact on foreign investment. The Fiscal Incentives Act No. 15 of 1974 allows for fiscal incentives to enterprises to facilitate local and foreign investment in productive sectors of the economy. Special consideration is given to export-oriented manufacturing enterprises. If a company seeks fiscal incentives, depending upon the sector, an application is filed with the Ministry of Commerce, Business Development, Investment and Consumer Affairs, with a copy to the Invest St. Lucia office. In response, the investor receives a clear answer of approval, disapproval or a request for more information. The purpose of the approval process for fiscal incentives is to ensure consistency with national interest policies, legal requirements, and net economic benefit. Criteria for fiscal incentives qualification are: the enterprise must be incorporated and registered in St. Lucia; the enterprise must contribute to the economic development of St. Lucia; the country’s human and natural resources must be utilized; the enterprise must train local personnel and upgrade its plant through technological transfer; the enterprise must form linkages with other economic sectors; and the enterprise must contribute to earnings in foreign exchange.
There are some special license requirements as to acquisition of land, development of buildings and expansion of existing construction, and special standards for various aspects of the tourism industry. Individuals or corporate bodies who are not citizens and who are seeking to acquire land may require a license prior to the execution of the transactions, depending upon the amount of land in question.
The Special Development Areas Act seeks to encourage investment in designated areas through the island. Special development areas are Vieux-Fort, Anse la Raye, Soufriere, Canaries and Dennery. Special concessions offered under this law include: exemption on import duty, stamp duty and consumption tax on inputs for the construction of new buildings and the renovation or refurbishment of existing buildings; land and house tax; stamp duty payable by vendors and purchasers on the initial purchase of property; higher tax allowances; and accelerated depreciation. Types of businesses which can qualify for these concessions are: residential complexes; commercial or industrial buildings; facilities directed towards the improvement or expansion of services to the tourism sector; water based activities; tourism projects highlighting the heritage and natural environment of St. Lucia; arts and cultural investments; agricultural based activities; and fisheries based activities.
The Tourism Incentives Act provides for earnings to be exempt from income tax, as a tourism project managed by or on behalf of a company is entitled to distribute profits to shareholders or debenture holders as capital monies free of tax during the two year period following the end of the tax holiday. The Act also allows for customs duty exemptions, and permits the importation into St. Lucia free of customs duty and consumption tax of materials and equipment used exclusively in connection with the construction and equipping of the tourism project.
The Freezone Act is designed to promote export development and foreign investment projects in a ‘bureaucracy-free, duty-free, and tax-free” environment for prescribed activities. Incentives include: exemption for customs duties, taxes and related charges on all classes of goods entering the Freezone for commercial or operating purposes; no restrictions or taxes on foreign exchange transactions; no taxes on dividends for the first 20 years of operation; no work permit fees for management personnel of Freezone businesses; no import or export licenses and no price control; and no company income tax for the first five years, and thereafter a very limited tax range.
TI Corruption Index
71 – 22 out of 176 countries
Heritage Economic Freedom
70.4 – 32 of 177 countries
World Bank Doing Business
53 of 185 economies
Conversions and Transfer Policies
Foreign investors in St. Lucia can repatriate all profits and dividends and import capital.
There are no exchange controls in St. Lucia and the invoicing of foreign trade transactions may be made in any currency. Importers are not required to make prior deposits in local funds and export proceeds do not have to be surrendered to Government authorities or to authorized banks. There are no controls on transfers of funds. The Government of St. Lucia guarantees the free transfers of profits and repatriation of capital.
Expropriation and Compensation
St. Lucia employs a system of eminent domain to pay compensation when property needs to be acquired in the public interest. There have been no recent claims of unlawful expropriation in St. Lucia. There have been no reported tendencies of the government to discriminate against U.S. investments, companies or landholdings. There are no laws forcing local ownership in specified sectors.
St. Lucia bases its legal system on the British common law system. The Magistrates and the High Court administer justice in St. Lucia. An appeal may be taken to the organization of Eastern Caribbean States Court of Appeal, and final appeals were taken to the Judicial Committee of the Privy Council in the United Kingdom.
The United States and St. Lucia are both parties to the World Trade Organization (WTO). The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.
Performance Requirements and Incentives
While there are no formal performance requirements, government officials will more likely approve investments they believe will create jobs and increase exports and foreign exchange earnings. There are no requirements for participation either by nationals or by the government in foreign investment projects, but to qualify for fiscal incentives the enterprise must contribute to the economic development of St. Lucia; the country’s human and natural resources must be utilized; the enterprise must train local personnel and upgrade its plant through technological transfer; the enterprise must form linkages with other economic sectors; and the enterprise must contribute to earnings in foreign exchange.
With one exception, there is no requirement that enterprises must purchase a fixed percentage of goods from local sources, but the government encourages local sourcing. However, companies purchasing chicken must purchase a minimum of 25% locally-produced chicken, and companies purchasing pork must purchase a minimum of 40% locally produced pork.
Fiscal Incentives Act
In an effort to increase investment, St. Lucia has implemented a series of investment incentives. The Fiscal Incentives Act provides a list of incentives including:
Corporate Tax Incentives
Under the Fiscal Incentives Act, four types of enterprise qualify for tax holidays. The length of the tax holiday for the first three depends on the amount of value added in St. Lucia. The fourth type, known as enclave industry, must produce goods exclusively for export outside the CARICOM region.
Maximum Tax Holiday
50% or more
25% to 50 %
10% to 25%
Corporate Income Tax
The standard corporate income tax rate is 33.3%. An IBC may elect to be exempted from paying income tax or to be liable to income tax on the chargeable income of the company at the rate of 1%. An IBC is not subject to stamp duties, withholding tax or capital gains tax.
St. Lucia provides companies with a further tax concession effective at the end of the tax holiday period.
Exemption from Import Duties
Full exemption from import duties on parts, raw materials, and production machinery is also available.
Right to Private Ownership and Establishment
Foreign investment in St. Lucia is not subject to any restrictions, and foreign investors are entitled to receive the same treatment as nationals of St. Lucia. The only restriction is the requirement to obtain an Alien Landholding License for foreign investors seeking to purchase property for residential or commercial purposes.
Protection of Property Rights
Civil law protects physical property and mortgage claims. St. Lucia is a member of the International Center for Settlements of Investment Disputes. St. Lucia is a member of the World intellectual Property Organization (WIPO). Article 45 of the Protocol Amending the Treaty that established CARICOM commits all 15 members to implement stronger IP protection and enforcement.
The administration of intellectual property laws in St. Lucia is under the responsibility of the Attorney General. The registration of patents, trademarks, and service marks is administered by the High Court Registry.
Transparency of the Regulatory System
St. Lucia is working to improve customs efficiency, modernize customs operations, and address inefficiencies in the clearance of goods.
Efficient Capital Markets and Portfolio Investment
St. Lucia is a member of the OECS, and as such, it is also a member of the Eastern Caribbean Securities Exchange (ECSE). The ECSE is a regional securities market established by the Eastern Caribbean Central Bank and licensed under the Securities Act of 2001, a uniform regional body of legislation governing securities market activities to facilitate the buying and selling of financial products for the eight member territories. St. Lucia is a member of this stock exchange, and is open to portfolio investment.
Competition from State Owned Enterprises
There are a very limited number of statutory corporations (state-owned enterprises) in St. Lucia. Those that exist do not generally pose a threat to investors, as they directly support the government in achieving its objectives.
Corporate Social Responsibility
Investors in St. Lucia are required to recognize the economic and social objects as well as the policies and priorities of the government. They are also equally responsible for maintaining workers’ rights and safeguarding the environment. The Labor Commissioner settles disputes over safety conditions. Workers have the right to report unsafe work environments without jeopardy to continued employment; inspectors then investigate such claims, and workers may leave such locations without jeopardy to their continued employment.
St. Lucia does not have a history of political violence.
While corruption related to foreign business and investment is not generally believed to be a major problem in St. Lucia, there have been some widely publicized allegations against government officials. The new government elected in November 2011 has publicly pledged to investigate the claims.
St. Lucia has laws, regulations and penalties to combat corruption. Senior government officials in the new government assert they are taking anti-corruption efforts seriously. Government agencies involved in enforcement of anti-corruption laws include the Royal St. Lucia Police Force, the Director of Public Prosecutions, and the Financial Intelligence Unit.
The country is a party to the Inter-American Convention against Corruption.
Economic and Monetary Regulation
St. Lucia's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=US$1.
OPIC and other Investment Insurance Programs
In 1999, the U.S. Government's Overseas Private Investment Corporation (OPIC) signed with Citibank to establish a US$200 million Investment Facility for the Caribbean and Central America, as one means of encouraging investment and stimulating economic development. The Caribbean Development Bank, which is based in Barbados, administers this program. OPIC provides financing and political risk insurance to viable private sector projects, helps U.S. businesses invest overseas, and fosters economic development in new and emerging markets.
Additionally, in 2004, OPIC approved an additional investment guaranty of up to US$100 million to Citibank to establish a lending facility that will enable Citibank to expand its activity in Central America and the Caribbean, including lending to small businesses. Under this facility, Citibank and OPIC share credit risk in loans, and OPIC provides clearances on workers’ rights and environmental issues for each downstream loan.
Minimum wage regulations in effect since 1985 set wages for a limited number of occupations. The minimum monthly wage for office clerks was EC$300 ($111), for shop assistants EC$200 (US$74), and for messengers EC$160 (US$59). A new labor code went into effect on August 1, 2012.
St. Lucia has a labor force of about 90,600 persons, with a literacy rate of 94.8%. The country’s technical and training needs are met largely by the local state college, which offer courses in skilled labor, including, plumbing, electrical engineering, air conditioning and refrigeration, masonry, carpentry, mechanical engineering, motor mechanics, typing and basic hotel skills. There is also a pool of professionals to draw from, in fields such as law, medicine, business information technology and accounting. Many of the professionals in St. Lucia trained in the Caribbean, the United States, Canada and the United Kingdom, where many of them gained work experience before returning to St. Lucia.
Foreign Trade Zones/Free ports
St. Lucia has a Freezone created by law; it is an enclosed area treated for customs purposes as lying outside the customs territory of the island. Goods of foreign origin may be held pending eventual transshipment, re-exportation and, in some cases, importation into the local market, without payment of customs duties.
Foreign Direct Investment Statistics
In 2012 the amount of net inward foreign direct investment was estimated at US$138 million.
Bilateral Investment Agreements, Economic Agreements, and Trade Agreements
St. Lucia has no bilateral investment treaty with the United States. St. Lucia has a bilateral investment treaty with the United Kingdom and with Germany.
Caribbean Community (CARICOM)
The Treaty of Chaguaramas established CARICOM in 1973. Its purpose is to promote economic integration among its fifteen (15) Member States. Investors operating in St. Lucia are given preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas goes further to establish the CARICOM Single Market and Economy (CSME), by permitting the free movement of goods, capital and labor within CARICOM States.
Organisation of Eastern Caribbean States (OECS)
The Revised Treaty of Basseterre establishes the Organisation of Eastern Caribbean States (OECS). The OECS consists of nine Member States of Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts & Nevis, St. Lucia and St. Vincent & the Grenadines with associate members being Anguilla and the British Virgin Islands. The purpose of the Treaty is to promote harmonization among Member States in areas concerning foreign policy, defense and security, and economic affairs. The six independent countries of the OECS ratified the Revised Treaty of Basseterre establishing the OECS Economic Union on January 21, 2011. The Economic Union established a single financial and economic space within which all factors of production, including goods, services and people, move without hindrance.
Economic Partnership Agreement (EPA)
The Economic Partnership Agreement (EPA) was concluded between the CARIFORUM States and the European Community and its Member States. The EPA is designed to replace the now expired transitional trade regime of the Cotonou Agreement. The overarching objectives of the EPA are to alleviate poverty in CARIFORUM, to promote regional integration and economic cooperation and to foster the gradual integration of the CARIFORUM states into the world economy by improving their trade capacity and creating an investment-conducive environment. The Agreement promotes trade related developments in areas such as competition, intellectual property, and public procurement, the environment and protection of personal data.
Caribbean Basin Initiative (CBI)
The objective of the Caribbean Basin Initiative is to promote economic development through private sector initiative in Central America and the Caribbean islands by expanding foreign and domestic investment in non-traditional sectors, diversifying CBI country economies and expanding their exports. It permits duty free entry of products manufactured or assembled in St. Lucia into markets of the USA.
Caribbean / Canada Trade Agreement (CARIBCAN)
CARIBCAN is an economic and trade development assistance program for Commonwealth Caribbean countries in which Canada provides duty free access to its national market for the majority of products which originate in Commonwealth Caribbean countries.
St. Lucia is a member of the WTO, and has a multilateral economic association agreement with the European Union.
Major U.S. Investors and Franchises
Investors include: American Airlines, American Life Insurance Co., Hess Oil, Monroe College, and Treasure Bay Corporation. Franchises include: Burger King, Budget Rent-a-Car, DHL Worldwide Express, Domino’s Pizza, FedEx Express, KPMG, Price Waterhouse Coopers, Subway, Terminix, Western Union, CaribTrans, Econocarib Shipping, Avis Rental Cars, Discovery at Marigot Bay, Harry Edwards Jewelry, Basic Blue (Levis), Cool Runnings (Nike Concept Store), Diamonds International, Duty Free Caribbean, The Moorings Yacht Charters, and UPS.
For further information, please contact the Economic/Commercial Section at the U.S. Embassy.
U.S. Embassy, Bridgetown, Barbados
Political, Economic, and Commercial Officer
U.S. Embassy, Bridgetown, Barbados
Jonelle M. Watson
U.S. Embassy Bridgetown, Barbados
Contacts for Investment Related Inquires
The following are contacts for investment related inquiries:
St. Lucia Ministry of Commerce, Business Development, Investment and Consumer Affairs
4th Floor, Heraldine Rock Building
The Waterfront, Castries
St. Lucia, W.I.
Tel: (758) 468-4218/(758) 468-4202
Fax: (758) 453-7347
Invest St Lucia
International Investment Development Director
1st Floor Heradline Rock Building
The Waterfront, Castries, P.O. Box 495
St. Lucia, W.I.
Tel: (758) 452-3614 or (758) 452-3615
Fax: (758) 452-1841
St. Lucia Office of Private Sector Relations
Office of Private Sector Relations
Greaham Louisy Administrative Building
The Waterfront, Castries
Tel: (758) 468 2145 / 468 2286
Fax: (758) 452-4606
St. Lucia Chamber of Commerce, Industry & Agriculture
PO Box 482,
St. Lucia, W.I.
Tel: (758 452 3165), (758) 453 1540
Fax: (758) 453 6907
Freezone Management Authority Ltd
PO Box 519
St. Lucia, W.I.
Tel: (758) 454-8881
Fax: (758) 454-8427