Saint Vincent and the Grenadines
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The government of St. Vincent and the Grenadines, through Invest SVG, strongly encourages FDI, particularly in industries that create jobs and earn foreign currency. St. Vincent and the Grenadines is an emerging and developing investment destination. The government is open to all investment, but is currently prioritizing investment in niche markets, particularly tourism, international financial services, agroprocessing, light manufacturing, creative industries, and information and communication technologies. St. Vincent and the Grenadines benefits from a low inflation rate and growing opportunities in the trade and export sectors.
Invest SVG’s FDI policy is to attract investment into the aforementioned priority sectors. It advises the government on the formation and implementation of policies and programs that attract and facilitate investment. The government offers special incentive packages for foreign investments in the hotel industry and light manufacturing. The government offers other incentive packages on an ad hoc basis.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are no limits on foreign control in St. Vincent and the Grenadines, nor are there requirements for local involvement or ownership in locally registered companies, although non-nationals must apply for a license from the Prime Minister’s Office to acquire more than 50 percent of a company. An attorney must submit the application and Cabinet must approve it. Companies holding at least five acres of land may restrict or prohibit the issue or transfer of their shares or debentures to non-nationals.
The government has not officially closed any industries to private enterprise, although some activities such as telecommunications, utilities, broadcasting, banking, and insurance require a government license.
Other Investment Policy Reviews
The OECS, of which St. Vincent and the Grenadines is a member, has not conducted a trade policy review in the last three years.
Established in 2003 under the Companies Act, Invest SVG 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. Invest SVG provides business support services and market intelligence to all investors. It also reviews all investment projects applying for government incentives to ensure they conform to national interests and provide economic benefits to the country. Invest SVG offers an online resource that is useful for navigating the laws, rules, procedures, and registration requirements for foreign investors. It is available at .
According to the World Bank’s 2020 Doing Business Report, St. Vincent and the Grenadines ranks 93rd of 190 countries in the ease of starting a business, which takes seven procedures and 10 days to complete. The general practice is to retain an attorney to prepare all incorporation documents. A business must register with the Commerce and Intellectual Property Office (CIPO), the Ministry of Trade, the Inland Revenue Department, and the National Insurance Service. The CIPO has an online information portal that describes the steps to register a business in St. Vincent and the Grenadines. There is no online registration process, but the required forms are available online. These must be printed and submitted to the CIPO. More information is available at .
There is no restriction on domestic investors seeking to do business abroad. Local companies 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.
6. Financial Sector
Capital Markets and Portfolio Investment
St. Vincent and the Grenadines is a member of the ECCU. As such, it is also a participant on the Eastern Caribbean Securities Exchange (ECSE) and the Regional Government Securities Market. The ECSE is a regional securities market established by the ECCB and regulated by the Eastern Caribbean Securities Regulatory Commission. The Securities Act of 2001 regulates activities on the ECSM.
The Eastern Caribbean Securities Exchange and its subsidiaries, the Eastern Caribbean Central Securities Depository and the Eastern Caribbean Central Securities Registry, facilitate activities on the ECSE. The main activities are the primary issuance and secondary trading of corporate and sovereign securities, the clearance and settlement of issues and trades, maintaining securities holders’ records, and providing custodial, registration, transfer agency, and paying agency services in respect of listed and non-listed securities. As of March 31, 2019, there were 149 securities listed on the ECSE, comprising 128 sovereign debt instruments, 13 equities, and eight corporate bonds. Market capitalization stood at USD 1.8 billion. This represents a significant decrease compared to the previous year and is attributed mainly to the delisting of CIBC First Caribbean International Bank Ltd, whose market capitalization previously accounted for 79.2 percent of total capitalization. St. Vincent and the Grenadines is open to portfolio investment.
St. Vincent and the Grenadines 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 international payments and transfers. St. Vincent and the Grenadines does not have a credit bureau. Lending by public and private financial institutions to the private sector remained relatively flat.
Money and Banking System
Eight participating governments 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. Vincent and the Grenadines is a signatory to this agreement and as such, the ECCB controls St. Vincent and the Grenadines’ currency and regulates its domestic banks.
The Banking Act 2015 is a harmonized piece of legislation across the ECCU member states. The ECCB and the Ministers of Finance of member states jointly carry out banking supervision under the Act. The Ministers of Finance usually act in consultation with the ECCB with respect to those areas of responsibility within the Minister of Finance’s portfolio.
Both domestic and foreign banks can establish operations in St. Vincent and the Grenadines. The Banking Act requires all commercial banks and other institutions to be licensed. The ECCB regulates financial institutions. As part of supervision, licensed financial institutions are required to submit monthly, quarterly, and annual performance reports to the ECCB. In its latest annual report, the ECCB listed the commercial banking sector in St. Vincent and the Grenadines as stable. Assets of commercial banks totaled USD 833 million at the end of December 2019 and remained relatively consistent during the previous year. The reserve requirement for commercial banks was 6 percent of deposit liabilities.
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 continue to monitor the issue.
Foreign Exchange and Remittances
St. Vincent and the Grenadines 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, its foreign exchange system is fully liberalized. The Eastern Caribbean dollar has been pegged to the U.S. dollar at a rate of XCD 2.70 to USD 1.00 since 1976. As a result, the Eastern Caribbean dollar does not fluctuate, creating a stable currency environment for trade and investment.
Companies registered in St. Vincent and the Grenadines have the right to repatriate all capital, royalties, dividends, and profits free of all taxes or any other charges on foreign exchange transactions. International business companies are exempt from taxation. Under present regulations, there are no personal income taxes, estate taxes, corporate income taxes, or withholding taxes for international business companies operating in St. Vincent and the Grenadines. International business companies are also exempt from competitive tax for 25 years. Only banks may make currency conversions. St. Vincent and the Grenadines is a member of the CFATF.
In 2014, the government of St. Vincent and the Grenadines signed an intergovernmental agreement with the United States to facilitate compliance with FATCA, which makes it mandatory for St. Vincent and the Grenadines’ banks to report the banking information of U.S. citizens.
Sovereign Wealth Funds
Neither the government of St. Vincent and the Grenadines, nor the ECCB, of which St. Vincent and the Grenadines is a member, maintain a sovereign wealth fund.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 3: Sources and Destination of FDI
Data not available.
Table 4: Sources of Portfolio Investment
Data not available.