2017 Investment Climate Statements: Saint Vincent and the Grenadines

Policies towards Foreign Direct Investment

The Government of St. Vincent and the Grenadines, through Invest St. Vincent and the Grenadines Authority (Invest SVG), strongly encourages FDI in the country, particularly in industries that create jobs and earn foreign currency. St. Vincent and the Grenadines is an emerging and developing investment player. The government is open to all investment, but is currently prioritizing investment in niche markets, particularly tourism, international financial services, agro-processing, light manufacturing, creative industries, and information and communication technologies.

Invest SVG’s FDI policy is to attract investment into the aforementioned priority sectors, and advise the government on the formation and implementation of policies and programs that attract and facilitate investment. The government offers special incentive packages for foreign investments in the hotel industry and light manufacturing. Other incentive packages are offered on an ad hoc basis.

The government’s principal goal in opening the new Argyle International Airport was to increase tourism. Tourism totals about 6 percent of GDP, which is expected to increase over the next ten years. St. Vincent and the Grenadines benefits from a low inflation rate and growing opportunities in the trade and export sectors.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign control in St. Vincent and the Grenadines, nor are there requirements for local involvement or ownership in locally registered companies, though non-nationals must apply for a license from the Prime Minister’s Office to acquire more than 50 percent% of a company. The application must be submitted by an attorney and must be approved by the Cabinet. Companies holding at least five acres of land may restrict or prohibit the issue or transfer of its shares or debentures to non-nationals.

Invest SVG evaluates all FDI proposals and offers intelligence, business facilitation and investment promotion to establish and expand profitable investment projects. Invest SVG advises the government on issues that are important to the private sector to ensure that the business climate continues to improve and attract further investment.

No industries are officially closed to private enterprise, although some activities, such as telecommunications, utilities, broadcasting, banking, and insurance, require a government license.

Other Investment Policy Reviews

In 2014, the Organization of the Eastern Caribbean States (OECS), of which St. Vincent and the Grenadines is a member, conducted an investment policy review through the World Trade Organization (WTO). This report which speaks to the country’s general investment climate can be found at: https://www.wto.org/english/tratop_e/tpr_e/s299-00_e.pdf .

Business Facilitation

Established in 2003 under the Companies Act, Invest SVG facilitates both domestic and foreign direct investment in priority sectors and advises the government on the formation and implementation of policies and programs to attract investment in the country. Invest SVG provides crucial business support services and market intelligence to all investors. It also reviews all investment projects applying for government incentives to ensure they conform to national interests and provide economic benefits to the country. Invest SVG 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.investsvg.org .

According to the World Bank’s 2017 Doing Business Report, St. Vincent and the Grenadines is ranked at 83^rd of 190 countries in ease of starting a business, which takes seven procedures and 10 days to complete. The general practice is to retain an attorney to prepare all incorporation documents. A business must register with the Commerce and Intellectual Property Office, the Ministry of Trade, the Inland Revenue Department and the National Insurance Services. The Commerce and Intellectual Property Office (CIPO) has an online information portal that describes the steps to register a business in St. Vincent and the Grenadines. There is no online registration process, but the required forms are available online. These must be printed and submitted to the Commerce and Intellectual Property Office. More information can be obtained at http://www.cipo.gov.vc .

Outward Investment

Although the Government of St. Vincent and the Grenadines 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 remains committed to the generation of more domestic savings, the government 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 the islands are actively encouraged to take advantage of export opportunities specifically related to the country’s membership in the OECS 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. Vincent and the Grenadines has not signed a bilateral investment treaty with the United States. However, the country does have bilateral tax treaties with the United States, Canada, the United Kingdom, Denmark, Norway, Sweden, and Switzerland. In 1989, Germany and St. Vincent and the Grenadines signed a treaty for the Encouragement and Reciprocal Protection of Investment. Its purpose is to promote favorable investment conditions between the two states. St. Vincent and the Grenadines is also party to the following economic communities and organizations:

Caribbean Community

The Treaty of Chaguaramas established the Caribbean Community (CARICOM) in 1973. Its purpose is to promote economic integration among its 15 Member States. Investors operating in St. Vincent and the Grenadines 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 (OECS). The OECS consists of seven full Member States of Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts & Nevis, St. Lucia and St. Vincent & the Grenadines, and the three associate members of 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 Caribbean Forum of the African, Caribbean and Pacific Group of States (CARIFORUM) 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. Vincent and the Grenadines into U.S. markets.

Transparency of the Regulatory System

St. Vincent and the Grenadines uses transparent policies and effective laws to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety. 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 profession in St. Vincent and the Grenadines

Rulemaking and regulatory authority rests in the unicameral House of Assembly, which has fifteen elected members and six appointed senators who sit for a five-year term. These representatives and senators serve together in a single body. The Public Accounts Committee & Director of Audit ensure the government follows administrative processes.

All regulations relating to foreign investment in the country are governed by the nation’s laws. These laws are developed in the respective ministries and drafted by the Ministry of Legal Affairs. These laws are enforced by the applicable ministry or ministries. The attraction of FDI is governed principally through the laws pertaining to Invest SVG. The laws of St. Vincent and the Grenadines are not available online through any government website.

Most draft bills are published in local newspapers of weekly circulation for public comment. In addition, bills at the consultation stage are circulated in stakeholder meetings. A select committee may also be established to suggest amendments to specified draft bills. In some instances, these mechanisms may also apply to investment laws and regulations. There is no obligation for proposed amendments to be considered prior to implementation.

Regulations are developed nationally and regionally. At the national level, the respective ministries advise the Ministry of Legal Affairs regarding necessary elements and parameters of the proposed legislation. The Ministry of Legal Affairs subsequently drafts the legislation, ensuring compatibility with the nation’s domestic and international legal commitments. Invest SVG has the main responsibility for investment supervision, while the Ministry of Economic Planning, Sustainable Development, Industry, Information and Labor tracks investments to collect information for national statistics and reporting purposes.

The country’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to implement all appropriate measures to ensure the fulfillment of its various treaty obligations. For example, the new 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.

An external company must be registered in St. Vincent and the Grenadines if it wishes to operate in-country. The Commercial Registry performs such registrations. Companies using or manufacturing chemicals must first obtain approval of their environmental and health practices from the St. Vincent and the Grenadines National Standards Institution and the Environmental Division of the Ministry of Health.

International Regulatory Considerations

As a member of the OECS and the Eastern Caribbean Economic Union, St. Vincent and the Grenadines 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, the country is obligated to implement regionally developed regulations, such as legislation passed under Organization of Eastern Caribbean States Authority, unless specific concessions are sought.

The country’s Bureau of Standards is a statutory body established under the Standards Act of 1992 to prepare and promulgate standards in relation to goods, services, processes and practices. As a signatory to the WTO’s Agreement on the Technical Barriers to Trade, St. Vincent and the Grenadines is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Legal System and Judicial Independence

The country’s legal system is based on the British common law system. The Constitution guarantees the independence of the judiciary. The judicial system consists of lower courts, called Magistrates’ Courts, as well as a Family Court. The Eastern Caribbean Supreme Court (St. Vincent and the Grenadines) 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 OECS members. Final appeal is to the Judicial Committee of the Privy Council of the United Kingdom.

The country has a strong judicial system that upholds the sanctity of contracts and prevents unwarranted discrimination towards foreign investors. The government treats foreign investors and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory. The police and court systems are efficient and unbiased in commercial matters, and the government operates in a generally transparent manner.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001 by the Agreement Establishing the Caribbean Court of Justice. The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. St. Vincent and the Grenadines is subject to the original jurisdiction of the CCJ.

The United States and St. Vincent and the Grenadines are both parties to the 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 SVG provides guidance on the relevant laws, rules, procedures, and reporting requirements for investors. Invest SVG has the authority to screen and review FDI projects. The review process is transparent and is contingent on the size of capital investment and the project’s projected economic impact. The investor must complete a series of steps to obtain a business license. These can be viewed at http://www.investsvg.org . Potential investors may review this site for important information prior to doing business in St. Vincent and the Grenadines. All potential investors seeking an incentive package must submit their proposals for review by Invest SVG to ensure the project is consistent with the nation’s laws and interests and would provide economic benefits to the country.

Local enterprises generally welcome joint ventures with foreign investors in order to access technology, expertise, markets, and capital.

Competition and Anti-Trust Laws

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to 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. Vincent and the Grenadines. The OECS 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 Legal Affairs 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. All issues relating to payment of compensation can be submitted to a Board of Assessment, whose award must be filed in the High Court. The value of the land is based on the amount for which the land would have been sold on the open market by a willing seller. Under the Alien’s (Land-Holding Regulation) Act, the government can hold properties forfeit without compensation if the terms of the investment are not met. U.S. Embassy Bridgetown is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in St. Vincent and the Grenadines.

Dispute Settlement

ICSID Convention and New York Convention

St. Vincent and the Grenadines is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of October 14, 1966, and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards; also known as the New York Arbitration Convention.

According to the World Bank’s 2017 Doing Business Report, dispute resolution generally took 595 days, though this may vary. The slow court system and bureaucracy are widely seen as main hindrances to timely resolution to commercial disputes. St. Vincent and the Grenadines is ranked 53^rd of 190 countries in enforcing contracts. Through the Arbitration Act (1952), the local courts recognize and enforce foreign arbitral awards issued against the government.

Investor-State Dispute Settlement

Investors are permitted to use national or international arbitration with regards to contracts entered into with the state. St. Vincent and the Grenadines 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 the country.

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 Trade Disputes (Arbitration and Inquiry) Act provides that trade disputes that exist or are pending may be reported to the Governor General by or on behalf of either party to a trade dispute. The Governor General may, if both parties consent, refer the dispute to an arbitration panel for settlement. The arbitration panel must issue an award that is consistent with national employment laws. The arbitration panel may permit interested persons to be represented by legal counsel. These bodies may conduct proceedings in public or private. The Trade Disputes Act provides that alternative dispute mechanisms are available as a means for settling disputes between two private parties. Voluntary mediation or conciliation is also recognized as an avenue to dispute resolution. The Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.

Bankruptcy Regulations

The country’s bankruptcy framework 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. Vincent and the Grenadines 169^th of 190 countries in resolving insolvency.

Investment Incentives

St. Vincent and the Grenadines offers many incentives for investors and provides the necessary information on the laws, criteria and application procedures to qualify for these incentives. The list of incentives includes exemption from or reduction of duty payments on the importation or purchase of raw materials, building materials, furniture, fixtures, fittings, appliances, machinery, and equipment for use in the construction and operation of the business; exemption from or reduction of duty on the importation or purchase of vehicles for use in the operation of the business; reduction of property tax under the Property Tax Act (2000) of up to 10 percent for land and buildings used in the operation of the business and tax holidays. The definition of local value added is the amount realized from product sales over a 12 month period, with the exception of a number of items that include, but are not limited to, wages and salaries paid to foreign nationals, profits and dividends distributed to foreign nationals, interest, management charges and other income payments to non-residents. Corporation taxes are levied at the rate of 25 percent. Tax holidays are provided as an investment incentive. Group I enterprises (50 percent or more local value added) enjoy a 15 year tax holiday period, Group II enterprises (25 to 49 percent local value added) are granted 12 years, Group III enterprises (10 to 24 percent local value added) receive 10 years. Enclave enterprises (producing wholly for extra-CARICOM Markets) enjoy a 15 year tax holiday.

In the tourism sector, the Hotels Aid Act provides incentives for the renovation, refurbishment and expansion of existing hotels and for the construction of new hotels. Concessions for expansions of not less than five guest rooms are also available. The Ministry of Tourism administers the Act.

The corporate tax rate ranges from 15 to 32.5 percent, except for companies granted tax holidays under the Fiscal Incentives Act. Companies manufacturing goods for local or export markets and which maintain a special account conforming to Comptroller of Inland Revenue requirements have access to reduced tax rates ranging from 15 to 30 percent. Offshore businesses are also subject to Value Added Tax on taxable goods imported into St. Vincent and the Grenadines. Value Added Tax will increase from 15 to 16 percent in May 2017. An international business company may import machinery and equipment free from certain taxes and customs duties if they are capital goods to be used for the company’s business.

A valid international trust can be established if it is in writing and follows the formal requirements for a deed or settlement under the International Trust Act. The Act recognizes several types of international trusts – protective or spendthrift trusts, charitable trusts and purpose trusts. A Registrar of Trusts has direct regulatory responsibilities relating to registration, certificate issuance and review of trust documentation. An international trust may only be registered if at least one of its trustees is registered and licensed. Upon registration, the trust and its settler are given certain benefits, including exemptions from various taxes and duties, provided the settler was not insolvent at the time the trust was created or became insolvent because of the creation of the trust. The exemptions include income tax, excise tax, customs duties and stamp duty exemptions, and applicable if certain conditions are met, one of which being that the trust must not be domiciled in the country. The Comptroller of Inland Revenue is empowered to assess a trust’s eligibility for tax exemptions and may require the registered trustee to provide financial information. In the absence or insufficiency of such information, tax exemptions may not be granted.

If at least one beneficiary of a registered trust becomes resident after the trust is registered, and if the trust is in good standing, the fact of the residency of the beneficiary will not invalidate the trust. However, neither the trust nor its beneficiaries will be entitled to tax exemptions for any year during which the trust had one or more resident beneficiaries. An international trust, except one that is an international company, will not become void or voidable as a result of a settler’s bankruptcy, insolvency or liquidation, the law of the settler’s domicile or ordinary residence notwithstanding.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are no foreign trade zones or free trade zones in St. Vincent and the Grenadines.

Performance and Data Localization Requirements

Companies must meet export performance requirements to take advantage of certain tax incentives. For example, “enclave enterprises” must produce goods exclusively for export outside the CARICOM region. Foreign investors may finance investments using domestic or foreign capital sources. The Fiscal Incentives Act confers income tax credits in the form of an export allowance to qualifying enterprises for the export of approved products.

The government does not mandate local employment. The Employment of Foreign Nationals and Commonwealth Citizens Act provides that foreign nationals or Commonwealth citizens must obtain a valid work permit in order to be employed in St. Vincent and the Grenadines. Work permit applications must be addressed to the ministry responsible for National Security. Work permits may be modified or cancelled after a seven-day notice if the holder fails to comply with conditions under which the permit is granted.

While there are no formal performance requirements, government officials strongly encourage investments they believe will create jobs and increase exports and foreign exchange earnings. In an effort to increase investment in the country, the Government of St. Vincent and the Grenadines introduced a series of investment incentives that have been codified in the Fiscal Incentives Act. These include tax holidays, import duty exemption, duty free concessions on the purchase of machinery and equipment and various tax exemptions. Some investments involving real estate may be granted incentives if minimum investment requirements prescribed by the Alien’s (Land-Holding Regulation) Act are met. There is no requirement that enterprises purchase a fixed percentage of goods from local sources. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software turn over keys for encryption, etc.).

Real Property

The Aliens’ Land Holding Act regulates the holding of land and mortgages related to land by individuals who are non-nationals and companies controlled by non-nationals. In order to hold land, non-nationals must apply for and be granted a license. The breach of any condition of the license authorizes the forfeiture to the government of the interest held by the non-national. License conditions may require that land be developed within a specific timeframe. An application for a license to hold land must be made to the office of the Prime Minister through an attorney licensed to practice in St. Vincent and the Grenadines. If approved, the license must be filed at the Registry of the High Court. All applicable registration fees and stamp duties must be paid to the Registry. The World Bank’s 2017 Doing Business Report ranks St. Vincent and the Grenadines 165^th of 190 countries in ease of registering property. It takes about 47 days to complete the seven necessary procedures, at a cost of about 11.8 percent of the property value. The report describes the procedure to purchase and register property.

Intellectual Property Rights

St. Vincent and the Grenadines has a legislative framework regarding its commitment to the protection of intellectual property rights (IPR). While the legal structures governing intellectual property could be considered strong, enforcement measures could be strengthened. The administration of intellectual property laws is the responsibility of the Office of the Attorney General. The registration of patents, trademarks, and service marks is administered by the Companies and Intellectual Property Office. St. Vincent and the Grenadines is signatory to the Paris Convention on IPR and the Berne Convention. It is a member of the United Nations World Intellectual Property Organization (WIPO).

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 EPA that was signed between the CARIFORUM States and the European Community in 2008 contains the most detailed obligations in respect to intellectual property in any trade agreement to which St. Vincent and the Grenadines is a party. The EPA recognizes 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 Enforcement Division of the Customs & Excise Department spearheads the preventative and enforcement aspects of IPR protection, which includes the detention, seizure and forfeiture of goods. The Enforcement Division also 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. Vincent and the Grenadines is a member of the Eastern Caribbean Currency Union. As such, it is also 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. Vincent and the Grenadines is a member of this stock exchange, and is open to portfolio investment.

St. Vincent and the Grenadines 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. 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. Vincent and the Grenadines is a signatory to this agreement and as such, the Eastern Caribbean Central Bank controls St. Vincent and the Grenadines’ 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. Vincent and the Grenadines 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 OECS, the country’s foreign exchange system is fully liberalized. The Eastern Caribbean Dollar has been pegged to the USD 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.

Remittance Policies

Companies registered in St. Vincent and the Grenadines have the right to repatriate all capital, royalties, dividends and profits free of all taxes or any other charges on foreign exchange transactions. International business companies are exempted from taxation. Under present regulations, there are no personal income taxes, estate taxes, corporate income taxes or withholding taxes for international business companies operating in St. Vincent and the Grenadines. International business companies are also exempt from competitive tax for 25 years. Only banks may make currency conversions. St. Vincent and the Grenadines is a member of the Caribbean Financial Action Task Force (CFATF).

In 2014, The Government of St. Vincent and the Grenadines 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. Vincent and the Grenadines’ banks to report the banking information of U.S. citizens.

Sovereign Wealth Funds

The Eastern Caribbean Central Bank, of which St. Vincent and the Grenadines is a member, does not maintain a Sovereign Wealth Fund.

There are currently 28 state-owned enterprises (SOEs) operating in the following sectors: water, housing, transportation (ports), electricity, tourism, information & communication, telecommunications, investment and investment services, financial services, fisheries, agriculture, sports and culture, civil engineering and infrastructure.

SOEs in St. Vincent and the Grenadines 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. They are headed by boards of directors to which senior management reports.

Privatization Program

There are currently no targeted privatization programs.

Responsible business conduct among both producers and consumers is positively regarded in St. Vincent and the Grenadines. 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 (NGO) 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 and will generally encourage philanthropy.

The law provides criminal penalties for official corruption, and the government generally implements these laws effectively, as such, corruption is not viewed as a major issue for investors. St. Vincent and the Grenadines is a signatory to the Inter-American Convention against Corruption, but is not a signatory to the United Nations Anti-Corruption Convention.

The law gives the Director of Public Prosecutions the authority to prosecute the following corruption-related offenses: extortion by public officers, public officers receiving property to show favor, false claims by officials, abuse of office, and false certification by public officers. There are no financial disclosure laws for public officials.

The law also provides for public access to information. Human rights organizations assisted individuals in obtaining information, but considered the mechanism for gaining access deficient. Only a narrow list of exceptions outlining the grounds for nondisclosure exists, yet there is no specific timeline for the relevant authority to make the requested response or disclosure. There are no criminal or administrative sanctions for not providing a response and no appeal mechanism for review of a disclosure denial. Public outreach activities via radio call-in shows encouraged citizens to access public information. In 2007, Parliament approved a Freedom of Information Act. However, regulations necessary to implement the Act were never adopted.

Resources to Report Corruption

Contact at government agency responsible for combating corruption:

Colin Williams
Director of the Public Prosecutions
Frenches Gate, Kingstown
784-457-1344
dppsvg@vincysurf.com

St. Vincent and the Grenadines does not have a recent history of politically motivated violence or civil disturbance. In the months following December 2015 general elections, a group of protesters established themselves in front of the electoral office to dispute the election outcome. Though protestors complained of police harassment, the protests subsided peacefully. The next presidential elections are planned for December 2020.

According to 2015 data, the most recent data available from the government, the country’s labor force was approximately 56,604 persons. The law, including related regulations and statutory instruments, provides for the rights of workers to form and join unions of their choice, bargain collectively, and conduct legal strikes. The law prohibits anti-union discrimination and dismissal for engaging in union activities.

The law provides for establishment of an arbitration tribunal and a board of inquiry in connection with trade disputes and allows provision for the settlement of such disputes. Authorities formed arbitration panels on an ad hoc basis when labor disputes occurred. Labor unions and businesses were generally satisfied with the working of the arbitration panels, which have tripartite representation. One of the mandates of the Department of Labor is to work as a dispute mechanism. A complaint must be filed with the Department and investigated by an assigned Labor Officer before a conciliation meeting can be convened. If there is no resolution, the complaint would be sent to a Hearing Officer who would call a meeting of the parties and make a ruling on the matter. If either party is unhappy with this ruling, there is a 21 day window to appeal to the Tribunal before the ruling becomes final.

The Wages Council Act establishes, through the Wages Council, minimum wages, hours of work, overtime, vacation, sick leave, and maternity leave for specified categories of workers. Employers who fail to pay minimum wages are subject to fines and orders for payment of the wages. The statutory minimum wages are set out in the regulations made under the Wages Council Act. The hours of work for specified categories of workers are usually eight hours per day with overtime generally calculated at a rate of time and a half and double for work done on Sundays and public holidays.

The Equal Pay Act makes provision for the removal and prevention of discrimination, based on the sex of the employee, in the rates or remuneration for males and females in paid employment. Teachers, police officers, public servants, the Medical Association, industrial workers and some members of the private sector especially the financial services, operate under a collective bargaining agreement.

The Protection of Employment Act No. 20 of 2003 allows for severance. Article 27 (1) allows employees to ask that their services be deemed as severed after six (6) weeks of being laid off from work. There is no unemployment insurance or other social security safety net programs for workers laid off for economic reasons.

Trade unions, and the leaders of the trade union movement, enjoy a strong voice in the labor and economic affairs of the country. Trade unions are granted legal recognition by the Trade Unions Act; therefore, the act of joining a trade union is not subject to criminal or civil sanctions. Trade unions must be registered with the Registrar of Trade Unions. The law also provides that it is lawful to conduct peaceful picketing in contemplation of a trade dispute.

The law provides for a minimum working age of 16, and this provision generally was observed in practice. Compulsory primary and secondary education policies reinforced minimum age requirements. The Labor Department had a small cadre of labor inspectors who conducted spot investigations of enterprises and checked records to verify compliance with the law. These inspectors may take legal action against an employer who is found to employ underage workers.

Investors in the country are responsible for maintaining workers’ rights and safeguarding the natural environment. The Factories Act provides general health and safety guidance to Labor Ministry inspectors. A new Occupational Safety and Health Bill was introduced in 2016. The Labor Commissioner settles disputes between employer and employees 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. Vincent and the Grenadines is a qualifying country for OPIC projects, however there are currently no active OPIC projects in the country.

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

IMF Coordinated Portfolio Investment Survey data are not available for St. Vincent and the Grenadines.

Table 4: Sources of Portfolio Investment

IMF Coordinated Portfolio Investment Survey data are not available for St. Vincent and the Grenadines.

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