The Government of Saint Lucia provides incentives to encourage investment by providing tax and non-tax concessions to businesses that can add value to the country’s economic development. Approval for incentives is granted by the Cabinet upon application, taking into consideration the type, size, scope, and employment potential of the business.
Saint Lucia’s Trade License Act, Aliens Licensing Act, International Business Companies Act, Development Incentives Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Fiscal Incentives Act, Tourism Incentives, and Tourism Stimulus and Investments Act together constitute a broad framework of incentives for foreign investors.
Except for pork and chicken, there are no requirements for an enterprise to purchase a fixed percentage of goods from local sources. Companies purchasing chicken must purchase a minimum of 28 percent locally produced chicken. Companies purchasing pork must purchase a minimum of 40 percent locally produced pork.
The Fiscal Incentives Act of 1974 provides for fiscal incentives to facilitate local and foreign investment in the productive sectors of Saint Lucia’s economy. The law gives export-oriented manufacturing enterprises special consideration. Investors may apply for incentives with the relevant ministry or ministries, providing a copy of the application to Invest Saint Lucia. The criteria for fiscal incentive qualification are that an enterprise must be incorporated and registered in Saint Lucia; contribute to the economic development of Saint Lucia; utilize domestic human and natural resources; form linkages with other economic sectors; contribute to foreign exchange earnings; train local personnel; and introduce plant upgrades via technological transfers.
The Fiscal Incentives Act provides a list of incentives, including a tax holiday of up to 15 years for approved projects, a waiver of import duty on imported machinery and plant equipment, a waiver of import duty on imported raw and packaging materials, and an export allowance on export earnings. Under the Fiscal Incentives Act, four types of enterprises qualify for tax holidays. The length of the tax holiday for the first three depends on the amount of value added in Saint Lucia. The fourth type, known as enclave industry, must produce goods exclusively for export outside the CARICOM region. The government amended the Fiscal Incentives Act in early 2020 to expand incentives offered to local businesses as a means of spurring development and investment. The Fiscal Incentives Act now includes four subsectors of the service industry: creative industry, professional services, spa and wellness, and information and communications technology.
||Maximum Tax Holiday
||50% or more
||25% to 50%
||10% to 25%
The standard corporate income tax rate is 30 percent. An International Business Company (IBC) may elect either to be exempted from paying income tax or to be liable for income tax on the chargeable income of the company at the rate of 1 percent. An IBC is not subject to stamp duties, withholding tax, or capital gains tax. Amendments to the act passed in 2017 sought to encourage IBCs to establish headquarters in Saint Lucia by offering various incentives, including a waiver of customs duty on materials, articles, or equipment used exclusively by the company’s head office, and exemption from income tax for employees.
Various special licensing requirements apply to the acquisition of land, development of buildings, expansion of existing construction, and certain aspects of the tourism industry. Individuals or corporate bodies who are not citizens and seek to acquire land may require a license prior to execution, depending upon the amount of land.
The Special Development Areas Act encourages investment in designated areas throughout the island. These areas include Vieux-Fort, Anse la Raye, Soufriere, Canaries, Choc Estate, and Dennery. Special concessions offered under this law include exemption on stamp duty and import duty on inputs for the construction of new buildings and the renovation or refurbishment of existing buildings; land and house tax; stamp duty payable by vendors and purchasers on the initial purchase of property; higher tax allowances; and accelerated depreciation. Types of businesses that may qualify for these concessions are residential complexes, commercial or industrial buildings, facilities directed towards the improvement or expansion of services to the tourism sector, water-based activities, tourism projects highlighting the heritage and natural environment of Saint Lucia, arts and cultural investments, agriculture-based activities, and fisheries-based activities.
The Tourism Incentives Act effectively provides for earnings exemption from income tax. This exemption would apply to a tourism project managed by or on behalf of a company entitled to distribute profits to shareholders or debenture holders as capital monies. The project would be free of tax during the two-year period following the end of the tax holiday. The act also allows for customs duty exemptions and permits the duty-free importation of materials and equipment used exclusively in connection with the construction and equipping of the tourism project. The Tourism Stimulus and Investment Act also allows for the waiver of VAT and property tax.
Foreign Trade Zones/Free Ports/Trade Facilitation
Saint Lucia maintains a Free Zone. It is an enclosed area treated for customs purposes as lying outside the customs territory of the island. Goods of foreign origin may be held pending eventual transshipment, re-exportation and, in some cases, importation into the local market without payment of customs duties. There are various types of companies operating in the Free Zone, including distributors of appliances, furniture, household and office supplies/items; manufacturers; duty-free suppliers of liquor, cigarettes, fragrances, wines, and pharmaceuticals.
The Free Zone Act aims to promote export development and foreign investment projects in a “bureaucracy-free, duty-free, and tax-free” environment for prescribed activities. Incentives include exemption from customs duties, taxes, and related charges on all classes of goods entering the Free Zone for commercial or operating purposes. There are no restrictions or taxes on foreign exchange transactions and no taxes on dividends for the first 20 years of operation. There are also no work permit fees for management personnel of Free Zone businesses, and no import or export licenses or price controls. Finally, there is no company income tax for the first five years, and thereafter a reduced corporate income tax. The Free Zone Act was last amended in 2018.
Performance and Data Localization Requirements
The Government of Saint Lucia does not mandate local employment. However, the government expects foreign investors to add value to the local economy, which can be achieved by providing local employment.
The 2006 Labor Code provides guidelines for employment, dismissal, and payment of severance and other benefits. It also defines permanent employment, fixed term employment, and contract for service.
The government requires all non-CARICOM citizens and companies intending to conduct business in Saint Lucia and who own more than 49 percent of the company’s shares to obtain a trade license. The Ministry of Commerce, Manufacturing, Business Development, Cooperatives and Consumer Affairs issues trade licenses. Under the Foreign National and Commonwealth Citizens (Employment) Regulation, anyone outside OECS seeking to conduct business or be employed in Saint Lucia must apply for a work permit. Applications are available from the Labor Department of the ministry with responsibility for labor. There are no excessively onerous visa, residency, or work permit requirements.
While there are no formal performance requirements, the government encourages investments that create jobs and increase exports and foreign exchange earnings. Local laws do not place any restrictions on foreign investment in Saint Lucia. Foreign investors are entitled to receive the same treatment as nationals of Saint Lucia. Foreign investors seeking to purchase property for residential or commercial purposes must obtain an Alien Landholding License. No sectors are officially closed to private enterprise, although some activities, such as telecommunications, utilities, broadcasting, banking, and insurance require government licenses. There is no restriction on foreign ownership of a local enterprise or participation in a joint venture. There are no requirements for foreign information technology providers to turn over source code and/or provide access to surveillance (e.g. back doors into hardware and software keys for encryption, etc.).