Saint Vincent and the Grenadines
St. Vincent and the Grenadines is a member of the Organization of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU). In the most recent available figures from the Eastern Caribbean Central Bank (ECCB), St. Vincent and the Grenadines’ 2020 estimated gross domestic product (GDP) was 783 million USD (2.12 billion Eastern Caribbean dollars) in 2020. St. Vincent and the Grenadines is still recovering from the explosive eruptions from La Soufriere volcano in April 2021. Volcanic ash blanketed most of the northern half of the St. Vincent, which includes much of the country’s agricultural districts. This, coupled with the ongoing challenges posed by the Covid-19 pandemic, has exacerbated the economic situation in St. Vincent and the Grenadines. The government is hoping that construction projects in the tourism sector and civil infrastructure will provide a much-needed economic boost this year. The economy might struggle to hit its forecasted growth of around 4.57 percent in 2022, as the agriculture and tourism sectors are impacted by the ongoing pandemic and volcanic reconstruction efforts.
The country seeks to diversify its economy across several niche markets, particularly tourism, international financial services, agricultural processing, scientific and medical research, light manufacturing, renewable energy, creative industries, and information and communication technologies.
The Government of St. Vincent and the Grenadines strongly encourages foreign direct investment (FDI), particularly in industries that create jobs and earn foreign exchange. Through the Invest St. Vincent and the Grenadines Authority (Invest SVG), the government facilitates FDI and maintains an open dialogue with current and potential investors.
The government does not impose limits on foreign control, nor are there requirements for local ownership or ownership in locally registered companies. The island’s legal system is based on the British common law system.
St. Vincent and the Grenadines does not have a bilateral investment treaty with the United States. It has double-taxation treaties with the United States, Canada, the UK, Denmark, Norway, Sweden, and Switzerland.
In 2016, St. Vincent and the Grenadines signed an intergovernmental agreement in observance of the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in St. Vincent and the Grenadines to report the banking information of U.S. citizens.
1. Openness To, and Restrictions Upon, Foreign Investment
2. Bilateral Investment Agreements and Taxation Treaties
St. Vincent and the Grenadines has not signed a bilateral investment treaty with the United States. The country, however, has bilateral tax treaties with the United States, Canada, the UK, Denmark, Norway, Sweden, and Switzerland. In 1989, Germany and St. Vincent and the Grenadines signed a treaty for the Encouragement and Reciprocal Protection of Investment. In 2018, St. Vincent and the Grenadines and the UAE concluded an Agreement on the Avoidance of Double Taxation on Income and an Agreement for the Promotion and Protection of Investments. St. Vincent and the Grenadines is also party to the following economic communities and organizations:
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. Vincent and the Grenadines have preferential access to the entire CARICOM market. The Revised Treaty of Chaguaramas (RTC) established the CSME, which permits the free movement of goods, capital, and labor among CARICOM states. CARICOM has bilateral agreements with Cuba, Colombia, Costa Rica, the Dominican Republic, and Venezuela. In 2013, CARICOM entered into a Trade and Investment Framework Agreement with the United 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, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines), and three associate members (Anguilla, Martinique, and the British Virgin Islands). Guadeloupe signed an accession agreement to the OECS in 2019. The purpose of the Treaty is to promote harmonization among member states in foreign policy, defense and security, and economic affairs. The six independent countries and Montserrat ratified the Revised Treaty of Basseterre establishing the OECS Economic Union, which entered into force in 2011. The Economic Union established a single financial and economic space within which goods, services, and people move without hindrance.
CARIFORUM-EU Economic Partnership Agreement
The Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) and the European Community signed an Economic Partnership Agreement (EPA) in 2008. The overarching objectives of the EPA are to alleviate poverty, promote regional integration and economic cooperation, and foster the gradual integration of the CARIFORUM states into the world economy by improving trade capacity and creating an investment-conducive environment. The EPA promotes trade-related developments in areas such as competition, intellectual property, public procurement, the environment, and the protection of personal data.
CARIFORUM-UK Economic Partnership Agreement
The UK and the CARIFORUM states signed an EPA in 2019, committing to trade continuity after Britain’s departure from the European Union. The CARIFORUM-UK EPA eliminates all tariffs on all goods imported from CARIFORUM states into the UK, while those Caribbean states will continue to gradually cut import tariffs on most of the region’s imports from the UK.
Caribbean Basin Initiative
The Caribbean Basin Initiative facilitates the economic development and export diversification of the Caribbean Basin economies. It promotes economic development through private sector initiatives in Central America and the Caribbean by expanding foreign and domestic investment in non-traditional sectors, diversifying country economies, and expanding their imports. The Caribbean Basin Initiative provides beneficiary countries with duty-free access to the U.S. market for most goods. It permits duty-free entry of products manufactured or assembled in St. Vincent and the Grenadines into the United States.
Caribbean/Canada Trade Agreement (CARIBCAN)
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 most products originating in Commonwealth Caribbean countries.
3. Legal Regime
4. Industrial Policies
5. Protection of Property Rights
6. Financial Sector
7. State-Owned Enterprises
There are several state-owned enterprises (SOEs) operating in the following sectors: water, transportation, housing, transportation (ports), electricity, tourism, information and communication, telecommunications, investment and investment services, financial services, fisheries, agriculture, sports and culture, civil engineering, and infrastructure.
SOEs in St. Vincent and the Grenadines are wholly owned government entities. They are headed by boards of directors to which senior managers report. They are governed by their respective legislation and do not generally pose a threat to investors, as they do not have a mandate to compete with private-sector companies. There is no single published list of SOEs, though information about individual SOEs is available.
8. Responsible Business Conduct
The government and the public view responsible business conduct positively. 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 employees of local and foreign-owned enterprises volunteer and when companies make monetary or in-kind donations to local causes.
The NGO community, while comparatively small, is involved in fundraising and volunteerism in gender, health, environmental, and community projects. The government sometimes partners with NGOs and generally encourages philanthropy.
There are no alleged or reported human or labor rights concerns relating to responsible business conduct of which foreign businesses should be aware.
St. Vincent and the Grenadines is not a signatory of the Montreux Document on Private Military and Security Companies or a participant in the International Code of Conduct for Private Security Service Providers’ Association.
The law provides criminal penalties for official corruption, and the government generally implements these laws. St. Vincent and the Grenadines is a signatory to the Inter-American Convention Against Corruption, but not to the UN Anti-Corruption Convention.
The Director of Public Prosecutions has the authority to prosecute a number of corruption-related offenses. Corruption allegations are investigated by the Royal St. Vincent and the Grenadines Police Force. There is generally no statutory standard obligation for public officers to disclose financial information to a specific authority. If confiscation proceedings are initiated or contemplated against a corrupt official, the courts can order disclosure of financial information. The Financial Intelligence Unit has the authority to conduct financial investigations with a court order.
The law also provides for public access to information. Only a narrow list of exceptions outlining the grounds for nondisclosure exists, but there is no specific timeline for relevant authorities to make the requested response or disclosure. There are no criminal or administrative sanctions for not providing a response and there is no appeal mechanism for review of a disclosure denial.
10. Political and Security Environment
St. Vincent and the Grenadines does not have a recent history of politically motivated violence or civil disturbance. Elections are peaceful and regarded as being free and fair. The next general elections are constitutionally due in 2025.
11. Labor Policies and Practices
According to the World Bank, St. Vincent and the Grenadines had an active labor force of approximately 54,945 persons in 2020. The government generally enforces labor laws, and penalties are sufficient to deter violations. The law, including related regulations and statutory instruments, provides for the rights of workers to form and join unions of their choice, bargain collectively, and conduct legal strikes. The law also provides that it is lawful to conduct peaceful picketing in contemplation of a trade dispute. Trade unions and leaders of the trade union movement enjoy a strong voice in the labor and economic affairs of the country.
The law prohibits antiunion discrimination and dismissal for engagement in union activities. Although the law does not require reinstatement of workers fired for union activity, a court may order reinstatement.
The International Labor Organization has noted with concern the discretionary authority of the government over trade union registration, and the government’s unfettered authority to investigate the financial accounts of trade unions.
The Trade Disputes (Arbitration and Inquiry) Act Chapter 215 provides for establishment of an arbitration tribunal and a board of inquiry in connection with trade disputes and allows provision for the settlement of such disputes. Labor unions and businesses are generally satisfied with the arbitration panels, which have tripartite representation. One of the mandates of the Department of Labor is to serve as a dispute resolution mechanism.
The Wages Council Act establishes the Wages Council, which addresses minimum wages, hours of work, overtime, vacation, sick leave, and maternity leave for specified categories of workers. Employers who fail to pay minimum wages are subject to orders for the payment of the wages. The statutory minimum wages are set out in regulations under the Wages Council Act. The hours of work for specified categories of workers are usually eight hours per day with overtime generally calculated at a rate of time and a half and double time for work done on Sundays and public holidays.
The Equal Pay Act makes provision for the removal and prevention of discrimination, based on the sex of the employee, in the rates or remuneration for males and females in paid employment. Teachers, police officers, public servants, the Medical Association, industrial workers, and some members of the private sector, especially in financial services, operate under collective bargaining agreements.
The Protection of Employment Act No. 20 of 2003 allows for severance. Article 27 (1) allows employees to ask that their services be deemed as severed after six weeks of being laid off from work. There is typically no unemployment insurance or other social security safety net programs for workers laid off for economic reasons. The government, however, offered limited cash grants to some workers whose employment was impacted by the layoffs related to the COVID-19 pandemic.
The law provides for a minimum working age of 16. This provision is generally observed in practice. Compulsory primary and secondary education policies reinforce minimum age requirements. The Labor Department has a small cadre of labor inspectors who conduct spot investigations of enterprises and checked records to verify compliance with the labor laws. These inspectors may refer cases to the police and the public prosecutor’s office for legal action against an employer who employs underage workers.
Investors in the country are responsible for maintaining workers’ rights and safeguarding the natural environment. Workers have the right to report and/or leave unsafe work environments without risking their continued employment.
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.
14. Contact for More Information
U.S. Embassy to Barbados, the Eastern Caribbean and the Organization of Eastern Caribbean States
Telephone Number: +1 246 –227 4000
Email Address: BridgetownPolEcon@state.gov