2018 Investment Climate Statements: Saint Kitts and Nevis

Policies Towards Foreign Direct Investment

The Government of St. Kitts and Nevis strongly encourages foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens. The country is home to the Eastern Caribbean Central Bank, the Eastern Caribbean Securities Exchange (ECSE), and the Eastern Caribbean Regulatory Commission (ECRC).

The government instituted a number of investment incentives for businesses that consider being based in St. Kitts and Nevis, encouraging both domestic and foreign private investment. Government policies provide liberal tax holidays, duty-free import of equipment and materials, and subsidies for training local personnel.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign control in St. Kitts and Nevis. Foreign investors may hold up to 100 percent of an investment. 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.

Foreign investment in St. Kitts and Nevis is generally not subject to any restrictions, and foreign investors receive national treatment. The only exception to this is the requirement to obtain an Alien Landholders License for foreign investors seeking to purchase property for residential or commercial purposes.

Other Investment Policy Reviews

The last trade policy review for the Organization of Eastern Caribbean States (OECS), of which St. Kitts and Nevis is a member, was conducted through the World Trade Organization (WTO) in 2014.

Business Facilitation

Established in 2007, the St. Kitts and Nevis Investment Promotion Agency (SKIPA) facilitates domestic and foreign direct investment in priority sectors and advises the government on the formation and implementation of policies and programs to attract investment to St. Kitts and Nevis. SKIPA provides crucial business support services and market intelligence to all investors.

According to the World Bank’s 2018 Doing Business Report, St. Kitts and Nevis is ranked 91st of 190 countries in starting a business, which takes seven procedures and 18.5 days to complete. The law does not mandate that an attorney be retained to prepare relevant incorporation documents. Anyone can file such documents on their own behalf. A business must register with the Financial Services Regulatory Commission, the Registrar of Companies, the Ministry of Finance, the Inland Revenue Department, and the Social Security Board.

Recently, there has been an increased focus on issues that directly impact on women. A number of regional development agencies have launched programs to assist Caribbean women entrepreneurs, notably Caribbean Export and the Women Innovators Network of the Caribbean. Local organizations have also hosted workshops in support of women entrepreneurs. The Government of the Federation of St. Kitts and Nevis continues to support the growth of women–led business as they have made immense contribution to the growth and development of the economy. The Government affirms equitable treatment and support of women in the private sector through non- discriminatory processes for business registration process, fiscal incentives, investment opportunities and quality assessments.

Outward Investment

There is no restriction on domestic investors seeking to do business abroad. Local companies in St. Kitts and Nevis 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 (CARICOM) Single Market and Economy, which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

St. Kitts and Nevis has not signed a bilateral investment treaty with the United States. It does have a Double Taxation Agreement with the United States. However, this agreement is limited solely to social security benefits. St. Kitts and Nevis’ Double Taxation Agreements meet Organization for Economic Cooperation and Development standards, as well as Tax Information Exchange Agreements (TIEAs) standards. St. Kitts and Nevis maintains these aforementioned Double Taxation Agreements with several countries including Denmark, Norway, Sweden and the United Kingdom. It has Double Taxation Conventions (DTCs) with Monaco, San Marino and some CARICOM countries.

Caribbean Community (CARICOM)

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. Kitts and Nevis are given preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas goes further, establishing the CARICOM Single Market and Economy (CSME), which permits the free movement of goods, capital, and labor, establishment of businesses, and provision of services 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: Antigua and Barbuda, Dominica, Grenada, Montserrat, 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 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 seven 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. Kitts and Nevis into the United States.

Caribbean/Canada Trade Agreement

The Caribbean / Canada Trade Agreement (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 originating in Commonwealth Caribbean countries.

Transparency of the Regulatory System

The government of St. Kitts and Nevis 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 Finance and SKIPA provide oversight of the system’s transparency as it relates to investment. While officially all sectors are open to attracting foreign investment, potential investors are cautioned that the Government of St. Kitts and Nevis has a history of expropriation practices that could put investments at risk.

Additionally, the incorporation and registration of companies in country differs somewhat on its two constituent islands. In St. Kitts, the process is regulated by the Companies Act. The incorporation of companies in Nevis is regulated by the Nevis Island Business Corporation Ordinance. There are no nationality restrictions for directors in a company, and in general, national treatment is applied. All registered companies must have a registered office in St. Kitts and Nevis.

Rulemaking and regulatory authority lies with the Unicameral Parliament of St. Kitts and Nevis. The Parliament consists of 11 members elected in single-seat constituencies (8 from St. Kitts and 3 from Nevis) for a five-year term.

All regulations regarding foreign investment in St. Kitts and Nevis are governed by the relevant laws of St. Kitts and Nevis. These laws are developed within the respective ministries and drafted by the Ministry of Justice, Legal Affairs and Communications. These laws are enforced by the applicable ministry or ministries. The attraction of foreign investment is governed principally by the laws that oversee the SKIPA and the Citizenship by Investment Program.

Although St. Kitts and Nevis does not have legislation that guarantees access to information or freedom of expression, access to information is generally available in practice. The government maintains an information service and a website, where it posts information such as directories of officials and a summary of laws and press releases. The government budget is available on the website: https://www.gov.kn/  . 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. Kitts and Nevis.

The Office of the 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 is not subject to the direction or control of any other person or authority. The Ombudsman is responsible for investigating any complaint relating to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body.

Regulations are developed nationally and regionally. At the national level, the relevant ministry reviews and recommends the legal authority that would enable it to effectively perform at the desired levels to reach optimum development objectives. These reviews are then submitted to the Ministry of Justice, Legal Affairs and Communications for the preparation of the draft legislation. Subsequently, the Ministry of Justice, Legal Affairs and Communications reviews all agreements and legal commitments (national, regional and international) to be undertaken by St. Kitts and Nevis, to ensure consistency prior to finalization. SKIPA has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.

St. Kitts and Nevis’ 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 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.

The enforcement mechanisms of these regulations include penalties or legal sanctions.

International Regulatory Considerations

As a member of the OECS and the Eastern Caribbean Economic Union, St. Kitts and Nevis 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. Kitts and Nevis is obligated to implement regionally developed regulations unless specific concessions are sought.

The St. Kitts and Nevis Bureau of Standards is a statutory body established under the National Bureau of Standards Act No 7 of 1999. It develops, establishes, maintains and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, as well as protecting the environment, food and food products, the quality of life for the citizenry and the facilitation of trade. It also conducts national training and consultations in international standards practices. As a signatory to the WTO Agreement on the Technical Barriers to Trade, St. Kitts and Nevis, through the St. Kitts and Nevis Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

The Federation of St. Kitts and Nevis ratified the WTO Trade Facilitation Agreement (TFA) in June 2016. Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade. It will also improve the speed and efficiency of border procedures, facilitate trade costs reduction and enhance participation in the global value chain. St. Kitts and Nevis is ranked 66^th out of 190 countries in the World Bank’s 2018 Doing Business Report. The report highlighted the changes made by the government which made trading across borders easier by updating its website and implementing ASYCUDA, an automated customs data management system and by reducing documentary compliance time for exports and imports.

Legal System and Judicial Independence

The Federation of St. Kitts and Nevis bases its legal system on the British common law system. 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 based on 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 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. Kitts and Nevis is subject only to the original jurisdiction of the Caribbean Court of Justice.

The United States and St. Kitts and Nevis 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

St. Kitts and Nevis’ Foreign Direct Investment (FDI) policy is to attract FDI into the priority sectors as identified under the National Diversification Strategy. These include financial services, tourism, real estate, agriculture, information technology, education services, and limited light manufacturing. However, investment opportunities also exist in renewable energy and other services. The main laws concerning foreign investment include the Fiscal Incentive Act, the Hotels Aid Act and the Companies Act.

While officially all sectors are open to attracting FDI, potential investors are cautioned that the Government of St. Kitts and Nevis has a history of expropriation practices that could put investments at risk. All potential investors applying for government incentives are reviewed by the SKIPA to ensure the project is consistent with the national interests and provides economic benefits to the country.

The SKIPA provides “one-stop shop facilitation” services to investors to guide them through the various stages of the investment process. SKIPA has a website that is useful in navigating the laws, rules, procedures and registration requirements for foreign investors: www.investstkitts.kn .

Under St. Kitts and Nevis’ Citizenship by Investment Program, foreign individuals can obtain citizenship in accordance with subsection (5) of Section 3 of the Citizenship Act of 1984, which grants citizenship (without voting rights) by investment. Program applicants are required to undergo a due diligence process before citizenship can be granted. The government announced changes to the investment options under the Citizenship by Investment program in March 2018. The minimum that would now entitle an investor to qualify is USD 200,000 in real estate or a USD 150,000 contribution to the Sustainable Growth Fund. Applicants must also provide a full medical certificate, and evidence of the source of funds. Applications for Citizenship by Investment status for real estate projects should be submitted to the St. Kitts Investment Promotion Agency for review and processing. Further information is available at: http://www.ciu.gov.kn/ .

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 St. Kitts and Nevis. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill is with the Ministry of Ministry of Justice, Legal Affairs and Communications for review.

Expropriation and Compensation

St. Kitts and Nevis uses eminent domain laws allowing the government to expropriate private property for the betterment of the public. The government is required to compensate owners. There are also laws that permit the acquisition of private business, and the government claims such laws are constitutional. The concept of eminent domain and the expropriation of private property is typically governed by laws that require governments to adequately compensate owners of the expropriated property at the time of its expropriation or soon thereafter. In some cases, the procedure for compensation of owners favors the government valuation at the expense of the owner.

Currently the United States Embassy in Bridgetown is aware of one outstanding case involving the seizure of private land by the government. The previous government agreed to pay the U.S. citizen claimant in installments, and completed the first two installments. The current government defaulted on two installments, and despite a court in St. Kitts and Nevis ordering the government to complete the 2015 and 2016 installments, the government has yet to do so. The government claims another individual made a claim on the property, and that it must wait until a court determines the outcome of the other claim before completing payments to the U.S. citizen owner. The United States Embassy in Bridgetown continues to recommend caution when conducting business in St. Kitts and Nevis.

Dispute Settlement

ICSID Convention and New York Convention

St. Kitts and Nevis is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, however it is 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 1950 is the main legislation that governs arbitration in St. Kitts and Nevis. St. Kitts and Nevis adheres to the New York Arbitration Convention.

Investor-State Dispute Settlement

Investors are permitted to use national or international arbitration with regards to contracts entered into with the state. St. Kitts and Nevis does not have a Bilateral Investment Treaty or a Free Trade Agreement with an investment chapter with the United States.

The U.S. Embassy Bridgetown is not aware of any current investment disputes in St. Kitts and Nevis.

St. Kitts and Nevis is ranked at 50^th out of 190 countries in resolving contracts in the World Bank’s 2018 Doing Business Report. According to the report, dispute resolution in St. Kitts and Nevis generally took an average of 578 days with a cost of claim of 26.6 percent. The slow court system and bureaucracy are widely seen as main hindrances to timely resolutions to commercial disputes. Through the Arbitration Act of 1950, the local courts recognize and enforce foreign arbitral awards issued against the government.

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 commercial arbitral awards. The Arbitration Act 1950 applies in St. Kitts and Nevis by virtue of Cap 3:01. The Eastern Caribbean Supreme Court’s Court of Appeal also provides meditation.

Bankruptcy Regulations

Under the Bankruptcy and Insolvency Act (2013), St. Kitts and Nevis has a bankruptcy framework that grants certain rights to debtor and creditor. The World Bank’s 2018 Doing Business Report addressed the strength of the framework and its limitations in resolving insolvency in St. Kitts and Nevis. St. Kitts and Nevis is ranked 168th of 190 countries in this area.

Investment Incentives

St. Kitts and Nevis implemented a series of incentives aimed at increasing investment. The Fiscal Incentives Act provides incentives that include a tax holiday of up to 15 years, additional tax rebates of up to five years, exemption from customs duties on material and equipment deemed necessary to establish or update an enterprise, repatriation of profits, dividends, royalties, and imported capital by arrangement with the Ministry of Finance, protection of investment through government agreement between St. Kitts and Nevis and the United States and no personal income tax. 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. Kitts and Nevis. The fourth type, known as enclave industry, must produce goods exclusively for export outside the CARICOM region.

Companies that qualify for tax holidays are allowed to import into St. Kitts and Nevis duty-free all equipment, machinery, spare parts and raw materials used in production.

The Hotels Aid Act provides relief from customs duties on items brought into the country for use in the construction, extension and equipping of a hotel of not less than ten bedrooms. In addition, the Income Tax Act provides special tax relief benefits for hotels of more than 30 bedrooms. These hotels are exempt from income tax for ten years. If the hotel contains fewer than 30 bedrooms, gains or profits would be exempt from income tax for five years.

Value Added Tax is levied on the total accommodation charges of a hotel or guest house and on the cost of food and beverages sold by a restaurant. The total tax rate is 12 percent (with 2 percent contributed to the Island Enhancement Fund). This tax is levied on the total accommodation.

Additionally, those who invest in St. Kitts and Nevis do not pay a capital gains tax. Qualified companies enjoy full exemption from taxes on corporate profits for a period not exceeding 15 years. Corporate tax does not apply to exempt companies or to enterprises that were granted tax concessions. There is no personal income tax. Additional tax concessions are available at the end of the tax holiday period.

Normally, individuals and ordinary companies remitting payments to persons outside of St. Kitts and Nevis must deduct 10 percent withholding tax from profits, administration, management or head office expenses, technical services fees, accounting and audit expenses, royalties, non-life insurance premiums, and rent. However, this tax does not apply to profits of an approved enterprise, such as exempt trusts, limited partnerships, companies or foundations.

The Unincorporated Business Tax Act mandates a levy on the gross revenue of services provided by professionals such as doctors, lawyers, dentists, and other specified persons listed in the schedule, at a rate of 4 percent.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are no foreign trade zones or free ports in St. Kitts and Nevis. However, there are four fully developed industrial sites where production facilities can be constructed to specification and leased at nominal rates. The sites are managed and serviced on behalf of the Federal Government by the Development Bank of St. Kitts and Nevis.

Performance and Data Localization Requirements

St. Kitts and Nevis does not mandate local employment. The provisions of the Labor Code outline the requirements for acquiring a work permit and prohibit anyone who is not a citizen of St. Kitts and Nevis or the OECS from engaging in employment without a work permit. There is a practice, when work permits are granted to senior management because no qualified nationals are available for the post, to recommend from among citizens of the country, a counterparty trainee. There are no excessively onerous visa, residency or work permit requirements.

As a member of the WTO, St. Kitts and Nevis is party to the Agreement to the Trade Related Investment Measures. While there are no formal performance requirements, government officials encourage 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. There is no requirement that enterprises must purchase a fixed percentage of goods from local sources, but the government encourages local sourcing. Foreign investors may hold up to 100 percent of an investment. Except for the requirement to obtain an Alien Landholders License, foreign investment in St. Kitts and Nevis is not subject to any restrictions, and foreign investors receive national treatment. 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

Civil law protects physical property and mortgage claims. The only restriction is the requirement to obtain an Alien Landholders License for foreign investors seeking to purchase property for residential or commercial purposes. The cost of these licenses is USD 371.00. The Alien Landholders License Tax is 10 percent of the value of the land. Licenses are granted upon proper submission to Cabinet for consideration and payment of license fees. Foreign investors are not required to pay the Alien Landholders License Tax in certain parts of the island, such as Frigate Bay or certain parts of the South East Peninsula. In the 2018 World Bank’s Doing Business Report, St. Kitts and Nevis is ranked 184^th of 190 countries in registering property.

Intellectual Property Rights

St. Kitts and Nevis has a legislative framework supporting its commitment to the protection of intellectual property rights. While the legal structures governing intellectual property are considered strong, enforcement generally could be strengthened. The administration of intellectual property laws in St. Kitts and Nevis is under the responsibility of the Ministry of Justice, Legal Affairs and Communications. The registration of patents, trademarks, and service marks is administered by the Intellectual Property Office.

St. Kitts and Nevis is a signatory to the Paris Convention for the Protection of Industrial Property (1883), the Patent Cooperation Treaty (PCT) (1970), and the Berne Convention for the Protection of Literary and Artistic Works (1886). St. Kitts and Nevis is also 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 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. Kitts and Nevis 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 Customs Department of St. Kitts and Nevis can seize prohibited or counterfeit goods, however, the courts rule on the forfeiture and disposal of such goods. Complainants make arrangements with Customs to secure the goods until a judgment is rendered. St. Kitts and Nevis is in the process of reviewing the existing laws in relation to the importation of counterfeit and prohibited goods.

St. Kitts and Nevis is not listed on the USTR’s 2017 Out-Of-Cycle Review of Notorious Markets, or in the 2018 Special 301 Report. 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. Kitts and Nevis is a member of the Eastern Caribbean Currency Union, and 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. St. Kitts and Nevis is a member of this stock exchange. As at 31 March 2017, the number of securities listed on the ECSE totaled 129, comprising 109 sovereign debt instruments, 13 equities and seven corporate bonds. Market capitalization as at 31 March 2017 was USD 3.07 billion.

St. Kitts and Nevis 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, 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. Kitts and Nevis is a signatory to this agreement and as such, the Eastern Caribbean Central Bank controls St. Kitts and Nevis’ 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 2.7 billion at the end of December 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, CARICOM declared the loss of correspondent banking to be a grave issue facing the region. CARICOM 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.

St. Kitts and Nevis remains well served by Bank and Non-Bank Financial Institutions. As a consequence there are minimal alternative financial services being offered. Informal community group lending is still practiced in some sections of the population, albeit not as significantly as in previous years.

Foreign Exchange and Remittances

Foreign Exchange

St. Kitts and Nevis 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, St. Kitts and Nevis has a foreign exchange system that is fully liberalized. The Eastern Caribbean Dollar was pegged to the United States dollar at a rate of XCD 2.70 to USD 1.00 in 1976. As a result, the Eastern Caribbean Dollar does not fluctuate, creating a stable currency environment for trade and investment in St. Kitts and Nevis.

Remittance Policies

Companies registered in St. Kitts and Nevis 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, however a mixed foreign-domestic company may repatriate profits to the extent of its foreign participation.

As a member of the OECS, there are no exchange controls in St. Kitts and Nevis 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. Kitts and Nevis is a member of the Caribbean Financial Action Task Force (CFATF).

In 2016, the government signed an Intergovernmental Agreement in observance of the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in St. Kitts and Nevis to report the banking information of U.S. citizens.

Sovereign Wealth Funds

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

State-Owned Enterprises (SOEs) in St. Kitts and Nevis work in partnership with ministries, or under their remit, carrying out certain specific ministerial responsibilities. There are currently about 10 SOEs St. Kitts and Nevis in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.

SOEs in St. Kitts and Nevis 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 the senior management reports. A list of SOEs can be found at www.gov.kn  .

Privatization Program

St. Kitts and Nevis currently does not have a targeted privatization program.

Responsible business conduct among both producers and consumers is positively regarded in St. Kitts and Nevis. 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 occasionally partners with NGOs in activities. The government encourages philanthropy.

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively.

Government agencies involved in enforcement of anti-corruption laws include the Royal St. Kitts and Nevis Police Force, the Director of Public Prosecutions, and the Financial Intelligence Unit. Parliament reviewed the Integrity in Public Life Bill in September 2013, but the law never passed. The government amended the Bill and reviewed the revised Bill in 2017. The Government has since announced that the Bill will bought into force in 2018. The Financial Intelligence Unit investigates financial crimes, but no independent body was established to handle allegations of government corruption.

In June 2015, twelve Commonwealth Caribbean countries, including St. Kitts and Nevis, 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 announced as a major 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:

Simone Bullen-Thompson
Solicitor-General
Legal Department
Church Street, Basseterre, St. Kitts and Nevis
Email: simone_bullen@hotmail.com

St. Kitts and Nevis does not have a recent history of politically motivated violence or civil disturbance.

St. Kitts and Nevis has a labor force of about 25,000 persons, with a literacy rate of 98 percent. The country’s technical and training needs are met largely by local colleges, which offer courses in technical and vocational studies. There is also a large pool of professionals to draw from in fields such as law, medicine, business information technology and accounting. Many of the professionals in St. Kitts and Nevis trained in the United States, Canada, the wider Caribbean, and the United Kingdom, where many gained work experience before returning to St. Kitts and Nevis.

The government set the minimum wage at USD 3.31 an hour. The law provides for a 40-hour workweek and for premium pay for work above the standard workweek. There is no legal prohibition on excessive or compulsory overtime. The law also calls for paid holidays and work on rest days to be paid at double the rate, as well as equal pay for equal work.

Although there is no legislation governing the organization and representation of workers, The Constitution of St. Kitts and Nevis speaks to the freedom of association and the right to organize and collective bargaining. Moreover, St. Kitts and Nevis ratified the International Labor Organization (ILO) Conventions C87, Freedom of Association and C98, The Right to Organize and Collective Bargaining. The Tripartite Constituents, representing labor, business and government, are presently consulting on a Draft Labor Code, which includes legislation on the freedom of association and the right to organize and collective bargaining.

Labor unions are free to organize and to negotiate for better wages and benefits for union members. The law prohibits anti-union discrimination, but does not require employers found guilty of such action to rehire employees who were fired for union activities. However, the employer must pay lost wages and severance pay. Collective bargaining takes place on a workplace-by-workplace basis, not industry wide.

The Labor Commissioner mediates all types of disputes between labor and management. By law, the system of industrial relations in St. Kitts and Nevis allows for labor grievances through a process of conciliation and mediation by the Department of Labor and the Commissioner, independent hearing, arbitration and finally a court of law. However, in practice few disputes actually go to the Commissioner for resolution. If neither the Commissioner nor the Ministry of Labor is able to resolve the dispute, the law allows for a case to be brought before a civil court.

Investors in St. Kitts and Nevis are responsible for maintaining workers’ rights and safeguarding the environment. While there are no specific health and safety regulations, the Factories Act provides general health and safety guidance to Labor Ministry inspectors. The Labor Commission 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 Draft Labor Code makes provision for occupational safety and health.

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. Kitts and Nevis is a qualifying country for OPIC projects. There are currently no active OPIC projects in St. Kitts and Nevis.

Table 3: Sources and Destination of FDI

Data not available. St. Kitts and Nevis does not appear in the IMF’s Coordinated Direct Investment Survey.

Table 4: Sources of Portfolio Investment

Data not available. St. Kitts and Nevis 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
246-227-4052
WatsonJM@state.gov