Executive Summary

The Federation of St. Christopher and Nevis (St. Kitts and Nevis) is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU).  St. Kitts and Nevis had an estimated gross domestic product of USD 820.4 million in 2018, with forecast growth of 3.08 percent for 2019, according to the Eastern Caribbean Central Bank (ECCB).  During the last fiscal year, the economy of St. Kitts and Nevis remained buoyant, fueled by revenue from its citizenship by investment (CBI) program, a robust construction sector, and increased tourist arrivals.  The government remains committed to creating an enhanced business climate to attract more foreign investment.

St. Kitts and Nevis ranks 140th out of 190 countries in the World Bank’s 2019 Doing Business Report.  The report noted little change in key areas from the previous year.

St. Kitts and Nevis has identified priority sectors for investment.  These include financial services, tourism, real estate, agriculture, information technology, education services, renewable energy, and limited light manufacturing.

The government provides a number of investment incentives for businesses who are considering establishing operations in St. Kitts or Nevis, encouraging both domestic and foreign private investment.  Foreign investors can repatriate all profits, dividends, and import capital.

The country’s legal system is based on British common law.  It does not have a bilateral investment treaty with the United States.  It has a Double Taxation Agreement with the United States, although the agreement only addresses social security benefits.

In 2016, St. Kitts and Nevis 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.

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 N/A http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2019 140 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2018 N/A https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, stock positions) 2018 $612 http://www.bea.gov/international/factsheet/ 
World Bank GNI per capita 2018 $16,240 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

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

Through the St. Kitts Investment Promotion Agency (SKIPA), the government introduced a number of investment incentives for businesses that consider locating in St. Kitts and Nevis.  SKIPA provides “one-stop shop” facilitation services to investors, helping to guide them through the various stages of the investment process. Government policies provide liberal tax holidays, duty-free import of equipment and materials, and subsidies for training local personnel.

The St. Kitts and Nevis government encourages investment in all sectors, but targeted sectors include financial services, tourism, real estate, agriculture, information and communication technologies, international education services, renewable energy, ship registries, and limited light manufacturing.

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 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 OECS, of which St. Kitts and Nevis is a member, has not conducted a trade policy review in the last three years.

Business Facilitation

Established in 2007, 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 business support services and market intelligence to all investors.

St. Kitts and Nevis ranks 95th of 190 countries in starting a business, which takes seven procedures and about 18.5 days to complete, according to the World Bank’s 2019 Doing Business Report.  It is not mandatory that an attorney prepare relevant incorporation documents. 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.

The government of St. Kitts and Nevis supports the growth of women–led businesses.  The government encourages equitable treatment and support of women in the private sector through non-discriminatory processes for business registration, 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 Single Market and Economy (CSME), which enhance the competitiveness of the local and regional private sectors across traditional and emerging high-potential markets.

2. Bilateral Investment Agreements and Taxation Treaties

St. Kitts and Nevis does not have a bilateral investment treaty with the United States.  It has a Double Taxation Agreement with the United States, but 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 Double Taxation Agreements with several countries including Denmark, Norway, Sweden, and the UK. It has Double Taxation Conventions (DTCs) with Monaco, San Marino, and some CARICOM countries.

Caribbean Community

The Treaty of Chaguaramas established the Caribbean Community (CARICOM) in 1973 to promote economic integration among its fifteen member states.  Investors operating in Dominica have preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas goes further, establishing the CSME, which permits the free movement of goods, capital, and labor within CARICOM states.

Organization of Eastern Caribbean States

The Revised Treaty of Basseterre established the OECS.  The OECS consists of seven full members: Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines, and four associate members: Anguilla, Martinique, Guadeloupe and the British Virgin Islands. The purpose of the Treaty is to promote harmonization among member states 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 in 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 CARIFORUM states and the European Community signed an Economic Partnership Agreement (EPA) in 2008. The overarching objectives of the EPA are to alleviate poverty in CARIFORUM states, 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 initiatives in Central America and the Caribbean islands by expanding foreign and domestic investment in non-traditional sectors, diversifying CBI country economies, and expanding exports.  It permits duty-free entry of products manufactured or assembled in Dominica 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.

3. Legal Regime

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 should be aware that U.S. companies have reported 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 Companies Act regulates the process. On Nevis, the Nevis Island Business Corporation Ordinance regulates the incorporation of companies.  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 (eight from St. Kitts and three from Nevis) for a five-year term.

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 independent Office of the Ombudsman guards against excesses by government officers in the performance of their duties.  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.

At the national level, the relevant ministry reviews and recommends the legal authority that would enable it to perform at the desired levels to reach optimum development objectives.  Ministries then submit these reviews 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 ECCU, 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 Customs Union (ECCU), 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 common national policies aimed at the progressive harmonization of relevant policies and systems across the region. Thus, St. Kitts and Nevis is generally obligated to implement regionally developed regulations.

The St. Kitts and Nevis Bureau of Standards develops, establishes, maintains, and promotes standards for improving industrial development, industrial efficiency, the health and safety of consumers, the environment, food and food products, and the facilitation of trade.  It also conducts national training and consultations in international standards practices. As a signatory to the World Trade Organization (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.

St. Kitts and Nevis ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  The TFA aims to improve the speed and efficiency of border procedures, facilitate reductions in trade costs, and enhance participation in the global value chain.  St. Kitts and Nevis has already implemented a number of TFA requirements. A full list is available at: https://www.tfadatabase.org/members/saint-kitts-and-nevis/measure-breakdown . St. Kitts and Nevis ranks 68th out of 190 countries in trading across borders in the World Bank’s 2019 Doing Business Report.

Legal System and Judicial Independence

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 (ECSC), 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 constitutional matters. Parties may appeal first to the ECSC, an itinerant court that hears appeals from all OECS members.  Final appeal is to the Judicial Committee of the Privy Council of the UK.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001.  The CCJ 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’ 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.

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’ CBI program, foreign individuals can obtain citizenship without voting rights by investment. Applicants are required to undergo a due diligence process before citizenship can be granted.  A minimum investment for a single 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 CBI status for real estate projects should be submitted to the SKIPA 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 CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  St. Kitts and Nevis does not have domestic legislation regulating competition. 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.  The government is required to compensate owners. There are also laws that permit the acquisition of private businesses, 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, many businesses note that the procedure for compensation of owners favors the government valuation.

The U.S. 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. According to certain companies, the current government defaulted on two installments.  Although a court in St. Kitts and Nevis ordered 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.

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 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 for 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 country ranks 51st out of 190 countries in enforcing contracts in the 2019 World Bank 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 by foreign investors as main hindrances to timely resolution of commercial disputes. Through the Arbitration Act, the local courts recognize and enforce foreign arbitral awards issued against the government.

International Commercial Arbitration and Foreign Courts

The ECSC is the domestic arbitration body.  Local courts recognize and enforce foreign commercial arbitral awards.  International commercial arbitration in St. Kitts and Nevis is applied under the Arbitration Act.  The Eastern Caribbean Court of Appeal also provides mediation.

Bankruptcy Regulations

St. Kitts and Nevis has a bankruptcy framework that grants certain rights to debtor and creditor.  The 2019 Doing Business Report ranks St. Kitts and Nevis 168th of 190 countries in this area.

4. Industrial Policies

Investment Incentives

In an effort to increase investment in the country, the government of St. Kitts and Nevis implemented a series of investment incentives codified in the Fiscal Incentives Act.   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, and no personal income tax.  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.

Enterprise Value Added Maximum Tax Holiday
Group I 50 percent or more 15 years
Group II 25 percent to 50 percent 12 years
Group III 10 percent to 25 percent 10 years
Enclave Enclave 15 years

 

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.  This total tax rate is 10 percent.

Investors 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 parties outside 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 specifications and leased at nominal rates.  The Development Bank of St. Kitts and Nevis manages and services the sites on behalf of the government.

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 that when St. Kitts and Nevis grants work permits to senior management because no qualified nationals are available for the post, the government may recommend a counterparty trainee who is a citizens.  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.)

5. Protection of Property Rights

Real Property

Civil law protects physical property and mortgage claims.  Foreign investors are required to obtain an Alien Landholders License to purchase property for residential or commercial purposes. The cost of these licenses is USD 371.  The Alien Landholders License Tax is 10 percent of the value of the land. Cabinet grants these licenses. 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.  Please contact SKIPA for further details. St. Kitts and Nevis ranks 185th of 190 countries in registering property in the World Bank’s 2019 Doing Business Report.

Intellectual Property Rights

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

St. Kitts and Nevis is a signatory to the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Berne Convention for the Protection of Literary and Artistic Works.  St. Kitts and Nevis is also a member of the UN World Intellectual Property Organization (WIPO).

Article 66 of the Revised Treaty of Chaguaramas (2001) establishing the Caribbean Single Market and Economy (CSME) commits all 15 members to implement stronger IPR protection and enforcement.  The Economic Partnership Agreement (EPA) between the CARIFORUM States and the European Community contains the most detailed obligations regarding IPR in any trade agreement to which St. Kitts and Nevis is a party.  The EPA gives recognition to the protection and enforcement of IPR. 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 [World Trade Organization (WTO)] Agreement on Trade-Related Aspects of Intellectual Property Rights (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 its existing laws in relation to the importation of counterfeit and prohibited goods.

St. Kitts and Nevis is not included in the United States Trade Representative (USTR) Special 301 Report or Notorious Markets List.

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

6. Financial Sector

Capital Markets and Portfolio Investment

St. Kitts and Nevis is a member of the ECCU, and as such, it is also a member of the ECSE and the Regional Government Securities Market.  The ECSE is a regional securities market established by the ECCB and licensed under the Securities Act of 2001, a uniform regional body of legislation governing the buying and selling of financial products for the eight member territories. In 2018, the ECSE listed 135 securities, comprising 112 sovereign debt instruments, 14 equities, and nine corporate bonds.  Market capitalization stood at USD 3.07 billion. St. Kitts and Nevis is open to portfolio investment.

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 eight participating governments of the ECCU have passed the Eastern Caribbean Central Bank Agreement Act.  The Act provides for the establishment of the ECCB, 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 the ECCB controls St. Kitts and Nevis’s currency and regulates its domestic banks.

Domestic and foreign banks can establish operations in St. Kitts and Nevis.  The Banking Act requires all commercial banks and other institutions to be licensed in order to conduct any banking business.   The ECCB regulates financial institutions. As part of ongoing supervision, licensed financial institutions are required to submit monthly, quarterly, and annual performance reports to the ECCB.  In its latest annual report, the Eastern Caribbean Central Bank listed the commercial banking sector as stable. Assets of commercial banks totaled USD 2.8 billion at the end of December 2018 and remained relatively consistent during the previous year.  The reserve requirement for commercial banks was 6 percent of deposit liabilities.

St. Kitts and Nevis is well served by bank and non-bank financial institutions.  There are minimal alternative financial services. Some citizens still participate in informal community group lending.

The Caribbean region has witnessed a withdrawal of correspondent banking services by U.S. and European banks.  CARICOM remains committed to engaging with key stakeholders on the issue and appointed a Committee of Ministers of Finance on Correspondent Banking to monitor the issue.

In March 2019, the ECCB launched an 18-month financial technology pilot to launch a Digital Eastern Caribbean dollar (DXCD) with its partner, Barbados-based Bitt Inc.  The ECCB will work closely with Bitt to develop, deploy, and test technology focusing on data management, compliance, and transaction monitoring systems for know your customer, anti-money laundering, and combating the financing of terrorism.  The goal of the pilot is to improve the risk profile of the ECCU and mitigate against the trend of de-risking by the region’s correspondent banking partners. The pilot will also focus on developing a secure, resilient digital payment and settlement platform with embedded regional and global compliance.  The digital Eastern Caribbean currency will operate alongside physical Eastern Caribbean currency. The ECCB will issue the DXCD to licensed bank and non-bank financial institutions on a private blockchain platform.

Foreign Exchange and Remittances

Foreign Exchange

St. Kitts and Nevis is a member of the ECCU and the ECCB.  The currency of exchange is the Eastern Caribbean Dollar (XCD).  As a member of the OECS, St. Kitts and Nevis has a fully liberalized foreign exchange system.  The XCD was pegged to the United States dollar at a rate of XCD 2.70 to USD 1.00 in 1976. As a result, the XCD 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.

There are no exchange controls in St. Kitts and Nevis and the invoicing of foreign trade transactions are allowed 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.

In 2016, the government signed an Intergovernmental Agreement in observance of FATCA, making it mandatory for banks in St. Kitts and Nevis to report the banking information of U.S. citizens.

Sovereign Wealth Funds

Neither the government of St. Kitts and Nevis, nor the ECCB, of which St. Kitts and Nevis is a member, maintains a sovereign wealth fund.

7. State-Owned Enterprises

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 about10 SOEs in St. Kitts and Nevis in areas such as tourism, investment services, broadcasting and media, solid waste management, and agriculture.

They are all wholly owned government entities.  Each is headed by a board of directors which the senior management reports.  A list of SOEs can be found at http://www.gov.kn.

Privatization Program

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

8. Responsible Business Conduct

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. The government encourages philanthropy.

9. Corruption

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.  The Financial Intelligence Unit investigates financial crimes, but no independent body was established to handle allegations of government corruption.

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

10. Political and Security Environment

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

11. Labor Policies and Practices

St. Kitts and Nevis has a labor force of about 25,000 with a literacy rate of 98 percent.  Local colleges largely meet the country’s technical and training needs. There is also a large pool of professionals to draw from in fields such as law, medicine, information technology, and accounting.  Many of the professionals in St. Kitts and Nevis trained in the United States, Canada, the wider Caribbean, and the UK, 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 speaks to the freedom of association and the right to organize and collective bargaining.  St. Kitts and Nevis ratified the International Labor Organization (ILO) Conventions C87, Freedom of Association and C98, 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 rather than on an industry-wide basis.

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, an 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 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, and workers may leave such locations without jeopardy to their continued employment.

12. OPIC and Other Investment Insurance Programs

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.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2018 $820.4 2017 $992.0 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A 2017 $612 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A N/A N/A BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data
Total inbound stock of FDI as % host GDP N/A N/A 2017 176.7 UNCTAD

* Source for Host Country Data: Eastern Caribbean Central Bank https://www.eccb-centralbank.org/statistics/dashboard-datas/. All ECCB GDP figures for 2018 are currently estimates.


Table 3: Sources and Destination of FDI

St. Kitts and Nevis does not appear in the IMF’s Coordinated Direct Investment Survey (CDIS).


Table 4: Sources of Portfolio Investment

St. Kitts and Nevis does not appear the IMF Coordinated Portfolio Investment Survey (CPIS).

14. Contact for More Information

Political/Economic Section
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
Telephone: 246-227-4000
Email: BridgetownPolEcon@state.gov

2019 Investment Climate Statements: Saint Kitts and Nevis
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