Grenada

Business Environment

Grenada is a member of the Caribbean Community and market (Caricom) and of the Organisation of Eastern Caribbean States (OECS). The regional Eastern Caribbean Central Bank is responsible for regulating the availability of money and credit, maintaining monetary stability, maintaining a common pool of foreign exchange reserves and issuing a single common currency for eight of the nine OECS members.

In September 2001 the Financial Action Task Force added Grenada to the blacklist of jurisdictions deemed to be non-cooperative in preventing money laundering. After making the necessary legislative reforms the FATF removed Grenada from the list in December 2002. Grenada was removed from the Organisation for Economic Cooperation and Development's tax haven blacklist in February 2002 after writing a formal letter committing the jurisdiction to exchanging information with overseas investigators in civil and criminal tax cases by 2005.

Grenada offers international business company registration and offshore banking and trust licenses. To obtain an offshore bank or trust license, applicants must first register an international business company (IBC) in Grenada through the Grenada International Financial Services Authority. The company must file a memorandum of articles and a memorandum of association listing the names of directors. A separate application must then be made for an offshore banking license under the Offshore Banking Act of 1996 or a trust license under the International Trusts Act, 1996. An offshore bank is defined as banking business conducted exclusively in currencies other than Eastern Caribbean dollars. Information on applications, license and license renewal fees is available here. There are no restrictions on remittances of capital, earnings on, and liquidation proceeds from direct non-resident investment. The ministry of finance must be notified of all outward transfers of funds.

Grenada’s economic citizenship program was temporarily suspended on 10 October 2001 due to concerns after the 11 September terrorism attacks. Economic citizenship was granted to 249 applicants in 2000 and 296 in 1999. Under the program, successful applicants have the right to hold Grenadian citizenship without having to live on the island. After six years of residence, economic citizens obtain full voting rights, as well as the right to hold public office. The overseas earnings and assets of an economic citizen are not taxed, whether or not he or she lives in Grenada.

Taxes

International business companies are not taxed. Grenada-resident trading companies gain double taxation relief when trading with Caribbean Community (Caricom) members and the United Kingdom. The Fiscal Incentives Act 1974 confers to 'approved enterprises' tax relief on income, plant, machinery, equipment, spare parts and raw material for the manufacturing of an 'approved product'. To qualify a company must have a product with 40% local value added, create a minimum of 10 jobs, and make a minimum investment in plant and equipment of EC$500,000. The product must also satisfy Caricom's rules of origin. Qualifying companies are exempt from the majority of the taxes described below:

Corporate tax: 30% on annual net profit (waived for approved enterprises).
Common external tariff (CET): 5% to 40% on the cost plus insurance plus freight (CIF) value of the landed price of goods purchased outside of Caricom. Duties where applicable are calculated on the CIF or on the cost and freight if the goods are not insured (waived for approved enterprises).
General consumption tax: All imported goods: 25% on the CIF value plus CET. The consumption tax is compounded except on qualifying Caricom imports (waived for approved enterprises).
Locally manufactured goods tax: 10%.
Customs service charge: 5% on the CIF value of imported goods.
Personal income tax: There is no personal income tax for those earning less than EC$60,000 annually. Personal income tax of 30% is payable on annual earnings in excess of EC$60,000.
Withholding tax: 15% payable on non-resident management fees and royalties (waived for approved enterprises).
Property transfer tax: Nationals pay 5% of the value of the land with or without improvement. Foreigners pay 15% of the value of the property and 10% on property other than land.
Landholding tax: Paid by non-nationals at a rate of 15% of the value of the land with or without improvement.
There is no capital gains tax.
Annual stamp tax: Tax on gross receipts levied in three stages.

Stock Exchange

Eastern Caribbean Securities Exchange
PO Box 94
Bird Rock
Basseterre, St. Kitts
Tel: (869) 466-7192
Fax: (869) 465-3798
E-mail: Info@ECSEonline.com

Contacts
Grenada International Financial Services Authority
Building #5, Financial Complex, Carenage
Phone (473) 440- 8717
Fax (473) 440- 4780
E-mail: grenoffshore@caribsurf.com
Grenada Industrial Development Corp.

Grenada Industrial Development Corporation
Frequente Industrial Park
True Blue, St. George's
Tel: (473) 444-1035/1040
Fax: (473) 444-4828
E-mail: gidc@caribsurf.com
Internet: www.grenadaworld.com

Latest available figures

Population
101,100 (1999 est.). Languages: English (official), French patois. Independence on 7 February 1974 from the UK.

Capital
Saint George's. Grenada consists of the islands of Grenada, Carriacou and Petit Martinique.

Currency
Eastern Caribbean dollar fixed at: US$1 = EC$2.70.

Legal System
Based on English common law. Grenada is responsible for its own magistrate's courts. The regional Eastern Caribbean Supreme Court is responsible for the high court and the court of appeals. The final court of appeal is to the Privy Council in London.

Government
The head of state is the British monarch, represented by a governor general. Grenada has a bicameral parliament made up of a 13-member Senate (10 appointed by the government and three by the leader of the opposition) and a 15-seat House of Representatives, whose members are elected by popular vote for five-year terms. The head of government is the prime minister, who is chosen from among the members of the House of Assembly and appointed by the governor general.

Governor general: Daniel Williams
Prime minister minister for national security, information, human resource development, youth development, business and private sector development, information communication technology: Keith Mitchell

Cabinet
Agriculture, lands, forestry and fisheries, public utilities, energy and the Marketing and National Importing Board: Gregory Bowen
Carriacou and Petit Martinique affairs, legal affairs and foreign affairs and international trade: Elvin Nimrod.
Finance and planning: Anthony Boatswain
Communication, works and transport: Clarice Modeste-Curwen
Education and labour: Claris Charles
Sports, community development and cooperatives, with responsibility for community development and cooperatives: Roland Bhola
Social services, gender and family affairs and housing: Yolande Bain Joseph
Health, social security and the environment: Ann David Antoine
Tourism, civil aviation, culture and the performing arts: Brenda Hood

Politics
Political parties: People's Labour Movement: leader Francis Alexis. Grenada United Labour Party (GULP): leader Gloria Payne-Banfield. National Democratic Congress (NDC): leader Tillman Thomas. New National Party (NNP): leader Keith Mitchell. The National Party (TNP); Ben Jones. National elections were last held on 27 November 2003. Incumbent prime minister Keith Mitchell led the governing New National Party (NNP) to a narrow victory taking eight seats in the 15-seat legislature. The NDC took the remaining seven. The NNP won 47.7% of the votes in an election in which only 47,454 out of 82,270 registered voters cast their ballots. The NDC won 45.1% of the ballots cast. Link: Election Information.

Economy
Grenada is a small open economy vulnerable to external shocks and natural disasters. In 2001, imports and exports accounted for 49.3% and 14.9% respectively of GDP. Grenada local economy is linked to the performance of the agricultural sector, in particular, the production and export of nutmeg and mace, cocoa and bananas. Government services make up 16.4% of GDP, transport 15.1%, wholesale and retail trade 10.8%; banks and insurance 9.9%; construction 10.4%, tourism 9%, communication 8.2%, agriculture 7.7%, and manufacturing 7.6%. Visitor expenditures account for 25% of GDP. Grenada shares a common central bank (the Eastern Caribbean Central Bank) and a common currency with seven other members of the Organization of Eastern Caribbean States (OECS).

Gross Domestic Product (2001)
GDP fell 3.37% in real terms in 2001 compared to a gain of 6.57 in 2000. GDP amounted to US$398.19 million at market prices in 2001.

Balance of Payments (2000)
Exports of goods: US$84.3 million. Exports of services: US$165.3 million. Current account deficit: US$98.3 million.

Inflation Rate (CPI) (2001)
1%

Labour Force (2001)
Unemployment: 12% compared to 11% in 2000.

Government Accounts (2001)
Current revenue amounted to EC$299.1 million (US$110.78 million). Current expenditure amounted to EC$269.8 million (US$99.93 million). Total capital expenditure: EC$169.1 million (US$62.63 million). Government debt at 31 December 2001: EC$572.4 million (US$211 million). Budget for 2002 - Total expenditure: EC$535.9 million (US$198.3 million). Total Revenues: EC$344.9 million (US$127.7 million). Expenditures: recurrent expenditure of EC$292.8 million, capital expenditures of EC$199.7 million. The remaining EC$43.5 million is attributed to amortization. EC$115.2 million of the budget will be financed by EC$45.3 million in grants and EC$69.8 million in loans. The fiscal year is the calendar year.

Government debt
The general government deficit, including social security surpluses, is expected to rise to an estimated 5% of gross domestic product (GDP) in 2002, from 4% of GDP in 2001 and 0.5% in 2000. Over a two-year period, gross general government debt and leases, including guaranteed debt, has risen to 78% of GDP, from 67% of GDP. (from Standard & Poor's assessment in March 2002).

Public Holidays (2004)
1 January (New Year's); 2 January (public holiday; 7 February (Independence); 9 April (Good Friday); 12 April (Easter Monday); 1 May (Labour Day); 31 May (Whit Monday); 10 June (Corpus Christi); 2 August (Emancipation day); 2nd Monday and Tuesday in August (Carnival); 25 October (Thanksgiving); 25 December (Christmas); 26 December (Boxing day).

Time Zone
Time: GMT -4 hours. There is no summer time change.

Sources
International Monetary Fund
US State Department
Eastern Caribbean Central Bank
Elections Around the World
CIA Fact Book
Holiday Festival