Transparency of the Regulatory System
St. Vincent and the Grenadines uses transparent policies and 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. The Public Accounts Committee and Director of Audits ensure the government follows administrative processes.
National laws govern all regulations relating to foreign investment. Ministries develop these laws and the Ministry of Legal Affairs drafts them. Laws pertaining to Invest SVG also govern FDI. 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 laws of St. Vincent and the Grenadines are not available online.
The government publishes most draft bills in local newspapers for public comment. In addition, the government circulates bills at stakeholder meetings. The government sometimes establishes a select committee 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 the government to consider proposed amendments prior to implementation.
The country’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to implement all appropriate measures to fulfill 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 most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found St. Vincent and the Grenadines to be largely compliant. The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.
An external company must be registered with the Commercial Registry in St. Vincent and the Grenadines if it wishes to operate in the country. 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 ECCU, 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 must implement regionally developed regulations, such as legislation passed under the OECS Authority, unless it seeks specific concessions not to do so.
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 World Trade Organization’s (WTO) Agreement on the Technical Barriers to Trade, St. Vincent and the Grenadines must harmonize all national standards to international norms to avoid creating technical barriers to trade.
St. Vincent and the Grenadines ratified the WTO Trade Facilitation Agreement (TFA) in January 2017 and subsequently notified its Category A measures. Included in the Trade Facilitation Agreement are measures to improve risk management techniques and a post-clearance audit system to eliminate delays and congestion at the port. Implementation of these measures would feed into a single window system that will contribute to the elimination of duplication and quicker clearance times by establishing a single interface for traders to submit and receive documentation of all agencies involved in the goods clearance process. A full list of measures undertaken pursuant to the TFA is available at: https://www.tfadatabase.org/members/saint-vincent-and-the-grenadines/measure-breakdown .
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, and 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 (commercial) matters and makes determinations on the constitutional matters. Parties may appeal first to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members. The final court of appeal is 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 generally unbiased in commercial matters.
The Caribbean Court of Justice (CCJ) is the regional judicial tribunal. 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 only.
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 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 steps are listed at http://www.investsvg.org . 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.
Expropriation and Compensation
Under the Land Acquisition Act, the government may acquire land for a public purpose. The government must serve a notice of acquisition on the person from whom the land is acquired. A Board of Assessment determines compensation and files its award 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.
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 2019 Doing Business Report, dispute resolution generally took 595 days, though this may vary. Foreign investors deem the court system and bureaucracy as slow, and thus, as main hindrances to timely resolution to commercial disputes. St. Vincent and the Grenadines ranks 56th 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 regarding 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.
The 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 recognize and enforce foreign arbitral awards. The Trade Disputes (Arbitration and Inquiry) Act provides that either party to an existing trade dispute ca report it to the Governor General. 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. Parties can be represented by legal counsel before the arbitration panel. 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. The government recognizes voluntary mediation or conciliation as dispute resolution mechanisms. The Eastern Caribbean Supreme Court’s Court of Appeal also provides mediation.
The Bankruptcy and Insolvency Act governs the country’s bankruptcy framework and grants certain rights to debtors and creditors. The 2019 World Bank Doing Business Report ranks St. Vincent and the Grenadines 168th of 190 countries in resolving insolvency.