2017 Investment Climate Statements: Saint Lucia

Policies towards Foreign Direct Investment

The Government of St. Lucia strongly encourages foreign direct investment (FDI), particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens.

Through Invest St. Lucia (http://www.investstlucia.com/ ), the government introduced a number of investment incentives for businesses that considered locating in St. Lucia, encouraging both domestic and foreign private investment. Invest St. Lucia provides “one-stop shop” facilitation services to investors, helping to guide them through the various stages of the investment process. Government concessions are granted by applicable government agencies, rather than through Invest St. Lucia, itself. Invest St. Lucia is overseen by the Prime Minister’s Office of Commerce, International Trade, Investment, Enterprise Development and Consumer Affairs.

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 establishing and expanding both foreign and domestic investment. Invest St. Lucia also provides investment promotion services.

The St. Lucian government encourages investment in all sectors, but key targeted sectors include: tourism, smart manufacturing and infrastructure, information and communication technologies, alternative energy, education and knowledge processing operations.

Limits on Foreign Control and Right to Private Ownership and Establishment

There is no limit on the amount of foreign ownership or control in the establishment of a business in St. Lucia. The government allows 100 percent foreign ownership of companies in any sector. Currently, there are no restrictions on foreign investors investing in military, security or natural resources. However, investment proposals are assessed for viability and in accordance with the laws of Saint Lucia. Trade Licenses and other approvals/licenses may be required before establishment.

Other Investment Policy Reviews

In 2014, the OECS, of which St. Lucia is a member, conducted an investment policy review through the World Trade Organization. This report, which speaks to the general investment climate in St. Lucia, can be found at: https://www.wto.org/english/tratop_e/tpr_e/tp399_e.htm .

Business Facilitation

Invest St. Lucia is the main business facilitation unit. It facilitates FDI in priority sectors, and advises the government on the formation and implementation of policies and programs to attract investment within St. Lucia. Invest St. Lucia provides crucial business support services and market intelligence to all investors. All potential investors applying for government incentives must submit their proposals for review by Invest St. Lucia to ensure the projects are consistent with the national interests and provide economic benefits to the country. Invest St. Lucia offers an on-line resource that is useful for navigating the laws, rules, procedures and registration requirements for foreign investors. It is available at http://www.investstlucia.com/ .

The Registry of Companies and Intellectual Property office maintains an e-filing portal for most of its services, including company registration, on its website. This allows applications to be reviewed. However, the registration fee cannot be paid on-line; this transaction must be completed at the Registry office. The Registry of Companies and Intellectual Property office can only accept payment in the form of cash and checks. Personal checks are not accepted. It is advisable to consult a local attorney prior to starting the process. Further information can be obtained from: http://www.rocip.gov.lc .

According to the World Bank Doing Business Report for 2017, St. Lucia is ranked 66th of 190 countries in ease of starting a business, which takes five procedures and 11 days to complete. The general practice is to retain an attorney to prepare all incorporation documents. A business must register with Registry of Companies and Intellectual Property Office, the Inland Revenue Authority and the National Insurance Corporation.

Outward Investment

Although the Government of St. Lucia prioritizes investment retention as a key component of its overall economic strategy, there are no formal mechanisms through which this is channeled. While the Government of St. Lucia remains committed to the generation of more domestic savings, the Government of St. Lucia will continue to require significant foreign investment to fill the investment gap.

There is no restriction on domestic investors seeking to do business abroad. Local companies in St. Lucia are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the Organization of Eastern Caribbean States Economic Union and the Caribbean Community Single Market and Economy, which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

St. Lucia has no bilateral investment treaty with the United States. St. Lucia does have bilateral investment treaties with the United Kingdom, Germany, and the Caribbean Community (CARICOM). St. Lucia is also party to the following:

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.

Organization of Eastern Caribbean States

The Revised Treaty of Basseterre establishes the Organization of Eastern Caribbean States. The OECS consists of seven full Member States: Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, the Federation of St. Kitts & Nevis, St. Lucia and St. Vincent & the Grenadines and three associate members: Anguilla, Martinique and the British Virgin Islands. Martinique joined as an associate member in February 2015. 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

The Economic Partnership Agreement (EPA) was concluded between the CARIFORUM States and the European Community and its Member States in 2008. The EPA replaced 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, public procurement, the environment and protection of personal data.

Caribbean Basin Initiative

The objective of the Caribbean Basin Initiative (CBI) 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 U.S markets.

Transparency of the Regulatory System

The Government of St. Lucia provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety. The Ministry of Commerce, Industry, Investment, Enterprise Development and Consumer Affairs, and Invest St. Lucia provide oversight on the transparency of the system as it relates to investment. The government offers a wide framework of incentives for foreign investors. The Invest St. Lucia Act, No. 14 of 2014, addresses government policy for attracting 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 impact foreign investment, as well.

Rule making and regulatory authority lies with the bicameral Parliament of the Government of St. Lucia. The Parliament has two chambers, which consist of 17 members elected for a five year term in single-seat constituencies to the lower house, and 11 appointed members appointed to the Senate.

All regulations relating to foreign investment in St. Lucia are governed by the nation’s laws. These laws are developed in the respective ministries and drafted by the Ministry of Home Affairs, Justice and National Security. These laws are enforced by the applicable ministry or ministries. The attraction of FDI is governed principally through the laws that oversee Invest St. Lucia and the Citizenship by Investment Program. St. Lucia’s laws are available online at http://www.govt.lc .

Although, some draft bills are not subject to public consultation, input from various stakeholder groups and town hall meetings may be enlisted as part of the formulation of new legislation. Public awareness efforts such as television and radio call-in programs are used to inform and shape public opinion. Copies of proposed laws and regulations are published in the Official Gazette before being presented in the House of Assembly. Although St. Lucia does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice. The government maintains an information service website on which it posts information such as directories of officials and a summary of laws and press releases. The government budget and an audit of that budget are available on the website. Accounting, legal and regulatory procedures are generally transparent and consistent with international norms. The International Financial Accounting Standards which stem from the General Accepted Accounting Principles govern the accounting profession in St. Lucia.

The Office of the Parliamentary Commissioner or Ombudsman is a constitutional provision to guard against excesses by government officers in the performance of their duties. The Office of the Ombudsman is independent and not subject to the direction or control of any other person or authority. The Ombudsman investigates complaints relating to any government official’s or body’s action or failure to act, where such results in an injustice or an aggrieved member of the public.

Regulations are developed nationally and regionally. At the national level, the respective ministries advise the Ministry of Home Affairs, Justice and National Security regarding necessary elements and parameters of the proposed legislation. The Ministry of Home Affairs, Justice and National Security subsequently drafts the legislation, ensuring compatibility with the nation’s domestic and international legal commitments. Invest St. Lucia has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.

St. Lucia’s membership in regional organizations, particularly the Organization of Eastern Caribbean States and its Economic Union, commits the state to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the Eastern Caribbean Currency Union, although there are some minor differences in implementation from country to country.

International Regulatory Considerations

As a member of the Organization of Eastern Caribbean States and the Eastern Caribbean Economic Union, St. Lucia subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre. The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies, aimed at the progressive harmonization of relevant policies and systems across the region. Thus, St. Lucia is obligated to implement regionally developed regulations, such as legislation passed under Organization of Eastern Caribbean States Authority, unless specific concessions are sought.

The St. Lucia Bureau of Standards is a statutory body established under the Standards Act, No. 14 of 1990. It establishes, maintains and promotes standards for improving industrial development and efficiency, promoting the health and safety of consumers as well as protecting the environment, food products, citizen quality of life and the facilitation of trade. It also conducts international standards consultations and training. As a signatory to the World Trade Organization Agreement on the Technical Barriers to Trade, St. Lucia is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade. St. Lucia is working to improve customs efficiency, modernize customs operations, and address inefficiencies in the clearance of goods.

Legal System and Judicial Independence

St. Lucia bases its legal system on the British common law system but its civil code and property law is greatly influenced by French Law. The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice. The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal. The High Court hears criminal and civil matters and makes determinations on the interpretation of the Constitution. Appeals are made in the first instance to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all Organization of Eastern Caribbean States members. Final appeal is to the Judicial Committee of the Privy Council of the United Kingdom.

The Caribbean Court of Justice is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The Caribbean Court of Justice has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. In its appellate jurisdiction, the Caribbean Court of Justice considers and determines appeals from Member States of CARICOM, which are parties to the Agreement Establishing the Caribbean Court of Justice. Currently, St. Lucia is subject only to the original jurisdiction of the Caribbean Court of Justice.

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.

Laws and Regulations on Foreign Direct Investment

Invest St. Lucia’s FDI policy is to actively pursue FDI in priority sectors and advise the government on the formation and implementation of policies and programs to attract sustainable investment in St. Lucia. All proposals for investment concessions and incentives are reviewed by Invest St. Lucia to ensure the projects are consistent with the national interest and provide 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. Invest St. Lucia offers a website that is useful to navigate the laws, rules, procedures and registration requirements for foreign investors: http://www.investstlucia.com/  .

Under St. Lucia’s Citizenship by Investment Program, foreign individuals may obtain citizenship in accordance with the Citizenship by Investment Act of 2015, which grants the right to citizenship by investment. Program applicants are required to submit to a due diligence process before citizenship can be granted. The minimum investment for a single applicant to qualify is a USD 100,000 contribution to the National Economic Fund. A USD 190,000 contribution applies to a family of four made up of the principal applicant, spouse and up to two dependents. Alternatively, a real estate purchase valued at USD 300,000 or more will also qualify. There are also provisions for enterprise investment in approved projects. More information on the CIP is available at https://www.cipsaintlucia.com .

Competition and Anti-Trust Laws

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to Caribbean Community (CARICOM) States. Member States are required to establish and maintain a national competition authority for implementing the rules of competition. CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct. CARICOM competition policy addresses anti-competitive business conduct, such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction or distortion of competition within the Community, and actions by which an enterprise abuses its dominant position within the Community. No legislation is yet in operation to regulate competition in St. Lucia. The Organization of Eastern Caribbean States agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill was submitted to the Ministry of Home Affairs, Justice and National Security for review.

Expropriation and Compensation

Under the Land Acquisition Act, the government may, by declaration, initiate the acquisition of land required for a public purpose. A notice of acquisition must be served on the person from whom the land is acquired. St. Lucia employs a system of eminent domain to pay compensation when property needs to be acquired in the public interest. There were 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.

There is one disputed case of expropriation involving an American citizen-owned property. An American citizen purchased 32 acres of land in St. Lucia in 1969. It was expropriated in 1985 by an act of law and the claimant sought redress since that time. In July 2014, the Cabinet of Ministers denied the claimant’s application to rectify the land registry in his favor. However, in subsequent recognition of certain questions of fairness associated with the cabinet’s review process, the Government of St. Lucia established a committee to further review this and other similar cases in an attempt to resolve the claim. To date, however, a government judgment as to the disposition of the property remains pending.

Dispute Settlement

ICSID Convention and New York Convention

St. Lucia is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of October 14, 1966, but not a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards; also known as the New York Arbitration Convention. The Arbitration Act (2001) provides general and specific provisions on arbitration rules and procedures in St. Lucia.

Investor-State Dispute Settlement

Investors are permitted to use national or international arbitration with regards to contracts entered into with the state. St. Lucia does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States. U.S. Embassy Bridgetown is not aware of any current investment disputes in St. Lucia.

The country’s court system is generally seen as being slow, with cumbersome bureaucracy widely seen as main hindrances to timely resolutions of commercial disputes. Reflecting these challenges, the 2017 World Bank’s Doing Business Report assessed that St. Lucia’s dispute resolution mechanisms took an average of 635 days. The country ranks 71^st out of 190 countries in resolving contracts in the same Doing Business Report. Through the Arbitration Act of 2001, the local courts recognize and enforce foreign arbitral awards issued against the government. In 2016, St. Lucia established a Commercial Court, which should improve the efficiency of contract enforcement and dispute resolution.

International Commercial Arbitration and Foreign Courts

The Eastern Caribbean Supreme Court is the domestic arbitration body and the local courts do recognize and enforce foreign arbitral awards. The Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.

Bankruptcy Regulations

St. Lucia has a limited bankruptcy framework that grants certain rights to debtor and creditor. The 2017 World Bank Doing Business Report addresses the strength of this framework and its limitations, ranking St. Lucia 114^th of 190 countries in resolving insolvency.

Investment Incentives

St. Lucia’s Trade License Act, Aliens Licensing Act, Development Incentives Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Fiscal Incentives Act, Tourism Incentives and Tourism Stimulus and Investments Act together constitute a broad framework of incentives for foreign investors.

Except for pork and chicken, there are no requirements for an enterprise to purchase a fixed percentage of goods from local sources. Companies purchasing chicken must purchase a minimum of 25 percent locally-produced chicken; companies purchasing pork must purchase a minimum of 40 percent locally-produced pork. Further information is available from Invest St. Lucia.

The Fiscal Incentives Act of 1974 provides for fiscal incentives to facilitate local and foreign investment in the productive sectors of St. Lucia’s economy. Special consideration is given to export-oriented manufacturing enterprises. Investors may apply for incentives with the relevant ministry or ministries, providing a copy of the application to Invest St. Lucia. The criteria for fiscal incentive qualification are that an enterprise must: be incorporated and registered in St. Lucia; contribute to the economic development of St. Lucia; utilize domestic human and natural resources, form linkages with other economic sectors, contribute to foreign exchange earnings, train local personnel, and introduce plant upgrades via technological transfers.

The Fiscal Incentives Act provides a list of incentives including a tax holiday of up to 15 years for approved projects, a waiver of import duty and consumption tax on imported machinery and plant equipment, a waiver of import duty and consumption tax on imported raw and packaging materials, and an export allowance on export earnings. Under the Fiscal Incentives Act, four types of enterprises 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.

The standard corporate income tax rate is 30 percent. An international business company may elect to either be exempted from paying income tax or to be liable for income tax on the chargeable income of the company at the rate of 1 percent. An international business company is not subject to stamp duties, withholding tax or capital gains tax.

Various special licensing requirements apply to the acquisition of land, development of buildings, expansion of existing construction and certain aspects of the tourism industry. Individuals or corporate bodies who are not citizens and seek to acquire land may require a license prior to execution, depending upon the amount of land in question.

The Special Development Areas Act encourages investment in designated areas throughout the island. These 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 that may 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, agriculture-based activities and fisheries-based activities.

The Tourism Incentives Act effectively provides for earnings exemption 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 duty free and consumption tax free importation of materials and equipment used exclusively in connection with the construction and equipping of the tourism project.

The Free Zone 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 Free Zone 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 Free Zone businesses; no import or export licenses; no price control; and no company income tax for the first five years, and thereafter a reduced tax range.

Foreign Trade Zones/Free Ports/Trade Facilitation

By law, St. Lucia maintains a Free Zone. 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 trans-shipment, re-exportation and, in some cases, importation into the local market, without payment of customs duties. There are various types of companies operating in the free zone including distributors of appliances, furniture, household and office supplies/items; manufacturers; duty free suppliers of liquor, cigarettes, fragrances, wines and other items; and pharmaceuticals. There is one American company operating in the free zone.

Performance and Data Localization Requirements

The Government of St. Lucia does not mandate local employment. However, foreign investors are expected to add value to the local economy, which can be achieved by providing local employment. All non-CARICOM individuals and companies intending to conduct business in St. Lucia and own more than 49 percent of the company’s shares are required to obtain a trade license. The ministry with responsibility for commerce issues trade licenses. Under the Foreign National and Commonwealth Citizens (Employment) Regulation, anyone outside the Organization of Eastern Caribbean States (OECS) seeking to conduct business or be employed in St. Lucia must apply for a work permit. Applications may be obtained from the Labor Department of the ministry with responsibility for labor. There are no excessively onerous visa, residency or work permit requirements.

While there are no formal performance requirements, government encourages investments that create jobs and increase exports and foreign exchange earnings. 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. Foreign investors seeking to purchase property for residential or commercial purposes must obtain an Alien Landholding License. No industries are officially closed to private enterprise, although some activities, such as telecommunications, utilities, broadcasting, banking, and insurance, require a license from the government. There is no restriction on foreign ownership of a local enterprise or participation in a joint venture. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (e.g. backdoors into hardware and software turn over keys for encryption, etc.).

Real Property

Civil law protects physical property and mortgage claims. There are some special license requirements pertaining 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 seek to acquire land may, depending upon the amount of land in question, require an alien landholders license prior to acquisition. This license is obtained through the Ministry for Agriculture, Fisheries, Physical Planning, Natural Resources and Co-operatives and must be registered by a local attorney. In the 2017 World Bank Doing Business Report, St. Lucia is ranked 104^th of 190 countries in ease of registering property. It takes about 17 days to complete the nine necessary procedures, at a cost of about 7.6 percent of the property value. The report describes the procedure to purchase and register property.

Intellectual Property Rights

St. Lucia has a legislative framework in place for the protection of intellectual property rights. While the legal structures governing intellectual property could be considered strong, enforcement generally could be strengthened. The Attorney General is responsible for administering intellectual property laws. The registration of patents, trademarks, and service marks is administered by the Registry of Companies and Intellectual Property Office.

St. Lucia is signatory to the Washington Treaty on Intellectual Property in Respect of Integrated Circuits; the WIPO Performances and Phonograms Treaty; WIPO Copyright Treaty; the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks; the Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms; the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks; the Patent Cooperation Treaty; the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations; the Paris Convention for the Protection of Industrial Property; the Berne Convention for the Protection of Literary and Artistic Works and Convention Establishing the World Intellectual Property Organization.

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the Caribbean Single Market and Economy commits all 15 members to implement stronger Intellectual Property protection and enforcement. The Economic Partnership Agreement (EPA), which was signed between the CARIFORUM States and the European Community in 2008, contains the most detailed obligations in respect of intellectual property in any trade agreement to which St. Lucia is a party. The EPA gives recognition to the protection and enforcement of intellectual property. Article 139 of the EPA requires parties to “ensure an adequate and effective implementation of the international treaties dealing with intellectual property to which they are parties and of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS).”

The Comptroller of Customs spearheads the preventative and enforcement aspects of IPR protection, which includes the detention, seizure and forfeiture of goods. The Customs and Excise Department conducts investigations of customs offences, and administers fines and penalties.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

St. Lucia is a member of the Eastern Caribbean Currency Union. As such, it is a member of the Eastern Caribbean Securities Exchange and the Regional Government Securities Market. The Eastern Caribbean Security Exchange 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. The number of equities listed is 13, while the number of debt securities listed is 90. Market capitalization stood at USD 3.07 billion as of December 2016. St. Lucia is a member of this stock exchange, and is open to portfolio investment.

St. Lucia has accepted the obligations of Article VIII of the International Monetary Fund Agreement, Sections 2, 3 and 4 and maintains an exchange system free of restrictions on making payments and transfers for current international transactions. Foreign tax credit is allowed for the lesser of the tax payable in the foreign country or the tax charged under St. Lucia tax law. The private sector has access to credit on the local market through loans, purchases of non-equity securities, and trade credits and other accounts receivable that establish a claim for repayment.

Money and Banking System

The Eastern Caribbean Central Bank Agreement Act was passed into law by the eight Participating Governments. The Schedule to the Act contains an agreement made on July 5, 1983 by seven member governments and acceded to by the Government of Anguilla on April 1, 1987. This Agreement provides for the establishment of the Eastern Caribbean Central Bank, its management and administration, its currency, relations with financial institutions, relations with the participating governments, foreign exchange operations, external reserves and other related matters. St. Lucia is a signatory to this agreement and as such the Eastern Caribbean Central Bank controls St. Lucia’s currency and regulates its domestic banks.

In its latest annual report, the Eastern Caribbean Central Bank listed the commercial banking sector as stable. Assets of commercial banks totaled USD $2.19 billion at the end of January 2017 and remained relatively consistent during the previous year. The reserve requirement for commercial banks was 6 percent of deposit liabilities.

International banks domiciled in the U.S., Canada and Europe are reviewing their correspondent banking relationships in regions that they deem as high-risk for financial services. The Caribbean witnessed a withdrawal of these services by U.S. and European banks in the last three years. In 2015, the Caribbean Community declared the loss of correspondent banking to be a grave issue facing the region. The Caribbean Community is committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to collate a collective response to this issue.

Foreign Exchange and Remittances

Foreign Exchange

St. Lucia is a member of the Eastern Caribbean Currency Union and the Eastern Caribbean Central Bank. The currency of exchange is the Eastern Caribbean dollar (XCD). As a member of the Organization of Eastern Caribbean States, St. Lucia has a foreign exchange system that is fully liberalized. The Eastern Caribbean Dollar has been pegged to the United States dollar at a rate of XCD 2.70 to USD 1.00 since 1976. As a result, the Eastern Caribbean Dollar does not fluctuate, creating a stable currency environment for trade and investment in St. Lucia.

Remittance Policies

Companies registered in St. Lucia have the right to repatriate all capital, royalties, dividends and profits. There are no restrictions on the repatriation of dividends for totally foreign-owned firms.

As a member of the Organization of Eastern Caribbean States, 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. St. Lucia is a member of the Caribbean Financial Action Task Force (CFATF).

In 2015, St. Lucia signed an intergovernmental agreement with the United States to facilitate compliance with the Foreign Account Tax Compliance Act (FATCA), which makes it mandatory for St. Lucia’s banks to report the banking information of U.S. citizens.

Sovereign Wealth Funds

Neither the Government of St. Lucia, nor the Eastern Caribbean Central Bank, of which St. Lucia is a member, maintains a Sovereign Wealth Fund.

State-owned enterprises in St. Lucia work in partnership with ministries, or under their remit — carrying out certain specific ministerial responsibilities. There are currently 39 state-owned enterprises in St. Lucia, operating in areas such as tourism, investment services, broadcasting and media, solid waste management and agriculture.

State-owned enterprises in St. Lucia are governed by their respective legislation and do not generally pose a threat to investors, as they are not designed for competition. However many are established in the context of creating economic activity in areas where the private sector is perceived to have very little interest. They are all wholly-owned government entities and are headed by boards of directors to which senior management reports. A list of state-owned enterprises in St. Lucia can be found at http://www.govt.lc/statutory-bodies .

Privatization Program

St. Lucia currently does not have a targeted privatization program.

Responsible business conduct among both producers and consumers is positively regarded in St. Lucia. The private sector is involved in projects that benefit society, including in support of environmental, social, and cultural causes. Individuals benefit from business-sponsored initiatives when local and foreign owned enterprises pursue volunteer opportunities and make monetary or in-kind donations to local causes.

The Non-Governmental Organization community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental and community projects. The government at times partners with NGOs in activities. The government encourages philanthropy.

While corruption related to foreign business and investment is not generally believed to be a major problem in St. Lucia, there were some widely publicized allegations against government officials. Access to information is legally guaranteed, and government officials are required by law to present their financial assets annually to the Integrity Commission. The Parliamentary Commissioner, Auditor General, and Public Services Commission are responsible for combating corruption. Parliament can also appoint a special committee to investigate specific allegations of corruption. The country is a party to the Inter-American Convention against Corruption and acceded to the United Nations Convention against Corruption in 2011. Saint Lucia is ranked 60^th out of 175 countries in the 2016 Transparency International Corruption Index.

St. Lucia has laws, regulations, and penalties to combat corruption; notably the Integrity in Public Life Act of 2004. However, while the law provides criminal penalties for official corruption, enforcement is not always effective. The 2015 public procurement and asset disposal bill is designed to strengthen anti-corruption laws. Government agencies involved in enforcement of anti-corruption laws include the Royal St. Lucia Police Force, the Director of Public Prosecutions, the Integrity Commission and the Financial Intelligence Unit.

In June 2015, twelve Commonwealth Caribbean countries including St. Lucia established a new regional body to enhance transparency and to help fight corruption. The formation of the Association of Integrity Commissions and Anti-Corruption Bodies in the Commonwealth Caribbean was presented as a potentially important step forward in regional efforts to support integrity and address corruption. It is hoped that the new body will help to further strengthen public confidence in cross-border initiatives to enhance accountability, knowledge sharing and coordination.

Resources to Report Corruption

Contact at government agency responsible for combating corruption:
Integrity Commission Secretariat

2nd Floor Greaham Louisy Administrative Building, Waterfront Castries Saint Lucia

Tel: 1 758 468 2207
Email: icstlucia@gmail.com

St. Lucia does not have a recent history of political violence. Elections are peaceful and considered free and transparent. The next elections are constitutionally due on in June 2021.

There is no formal national minimum wage in St. Lucia, though a government-appointed minimum wage commission did submit a recommendation on establishing a minimum wage and the wage structure that should be established.

The legislated workweek is 40 hours, with a maximum of eight hours per day. Overtime hours are at the discretion of the employer and the agreement of the employee. Pay is time-and-a-half for work over eight hours and double for work on Sundays and public holidays. Workers paid monthly are entitled to a minimum of 14 paid vacation days after one year. Workers paid on a daily or biweekly schedule have a minimum of 14 vacation days after 200 working days.

Special legislation covers work hours for shop assistants, agricultural workers, domestic workers, and workers in industrial establishments. Labor laws, including occupational health and safety standards, apply to all workers whether they are in the formal or informal sectors.

St. Lucia has a labor force of about 104,625 persons (2016 estimate), with a literacy rate of 72.8 percent (2010 census). The country’s technical and training needs are met largely by the local state college, which offers courses in technical and vocational 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 United States, Canada, the United Kingdom or the wider Caribbean, where many of them gained work experience before returning to the country.

The law, including applicable statutes and regulations, specifies the right of most workers to form and join independent unions, strike, and bargain collectively. The law also prohibits anti-union discrimination, and workers fired for union activity have the right to reinstatement.

The law places restrictions on the right to strike by members of the police and fire departments, health services, and utilities (electricity, water, and telecommunications) on the grounds that these organizations provide “essential services.” They must give 30 days’ notice before striking. Once workers give notice, authorities usually refer the matter to an ad hoc tribunal set up under the Essential Services Act. The government selects tribunal members, following rules to ensure tripartite representation. The ad hoc labor tribunals try to resolve disputes through mandatory arbitration. The ministry’s labor commissioner is charged with monitoring violations of labor law.

The government effectively enforced these laws, including with effective remedies and penalties, but there were insufficient resources for investigation and enforcement of labor standards. The Ministry of Education, Innovation, Gender Relations and Sustainable Development employed eight labor officers (inspectors) who, due to financial constraints, focused mainly on occupational health and safety concerns. The government sets occupational safety and health (OSH) standards that are current and appropriate.

Violations of the labor code can result in fines of up to USD 3,704 and two years in prison. Penalties were sufficient to deter violations. The St. Lucia Labor ‘Code’ Act (2006) was passed in August 2012, which further defines worker rights, employers’ rights and increases penalties for violations.

Investors in St. Lucia are 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.

The Overseas Private Investment Corporation (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. St. Lucia is a qualifying country for OPIC projects. There are currently no active OPIC projects in St. Lucia.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source: Eastern Caribbean Central Bank Statistics: http://www.eccb-centralbank.org/Statistics/index.asp#GDP  (updated January 23 2017). ECCB GDP figures for 2016 are currently estimates.

Table 3: Sources and Destination of FDI

St. Lucia does not appear in the IMF’s Coordinated Direct Investment.
Table 4: Sources of Portfolio Investment

St. Lucia does not appear in the IMF’s Coordinated Portfolio Investment Survey for Sources of Portfolio Investment.

Commercial and Economic Affairs, Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
Tel: 246-227-4052
Email: WatsonJM@state.gov