St. Kitts and Nevis

Business Environment

St. Kitts and Nevis is in the process of changing its financial services legislation so as to avoid punitive measures against offshore jurisdictions by the G-7 and OECD member countries. The G-7's Financial Stability Forum listed St. Kitts and Nevis among group three jurisdictions those regarded as having the lowest quality financial supervision. The OECD listed St. Kitts as a tax haven and as unco-operative in fighting money laundering. Government has passed the Money Laundering (Prevention) Bill 2000, the Financial Services Intelligence Unit Bill 2000, and the Financial Services Commission Bill 2000. The latter piece of legislation establishes the Financial Services Commission as the main regulatory body for the offshore sector.

Offshore companies can be established under the Companies Act 1996. Banks, trusts, and other investment services are regulated by the Financial Services (Regulations) Order 1997. Foreigners can obtain citizenship under the Citizenship Act 1984. The minimum investment requirement is US$200,000 in 10-year Treasury Bonds issued and guaranteed by the Federation, a minimum US$250,000 investment in a project, or a minimum of US$150,000 investment in a real estate development. Treasury bonds are issued at their nominal or par value and no interest is paid on them. Nevis has its own financial services legislation including: The Nevis Business Corporation Ordinance, 1984; the Nevis International Exempt Trust Ordinance, 1994; the Nevis Limited Liability Company Ordinance, 1995; and the Nevis Offshore Banking Ordinance, 1996. St. Kitts and Nevis is a member of the Eastern Caribbean Central Bank.

Taxes

Exempt companies, limited partnerships, and trusts that conduct business exclusively with those who are not residents are exempt from all taxes. Other companies are exempt from taxes on dividends, interest, and royalties. Ordinary companies are liable to a 37% tax on profits. Individuals and ordinary companies remitting payments to people overseas must deduct 10% withholding tax from profits, administration, management or head office expenses, technical service fees, accounting and audit expenses, royalties, non-life insurance premiums, and rent. There is a capital gains tax of 20% on profits or gains derived from a transaction relating to local assets that are disposed of within one year of the date of their acquisition. This tax does not apply to trusts, limited partnerships, exempt companies, or to enterprises that have been granted a tax concession. There is no personal income tax in St. Kitts or Nevis. There is no net worth tax, gift tax, sales tax, turnover tax, or estate duty.

Government contact:

Financial Services Department
P.O. Box 186
Basseterre
St. Kitts and Nevis
Phone: (869) 466 5048
Fax: (869) 466 5317
http://www.fsd.gov.kn/

Latest available figures

Status
The federation of St Kitts and Nevis is an independent parliamentary democracy formerly known as St. Christopher and Nevis.

Population
39,529 (1999 est.)

Capital
Basseterre

Currency
Eastern Caribbean dollar. The currency is pegged at US$1 = EC$2.70.

Legal system
The legal system is based upon English common law. Appeals go to the Eastern Caribbean Supreme Court based on Saint Lucia. The final court of appeal is the Privy Council in the UK.

Government
The Head of State is the British monarch who is represented by a governor-general. Government consists of a 14-seat unicameral National Assembly made up of 11 members elected from single-seat constituencies, and three appointed senators. Members serve for a maximum of five years.

Governor General (St. Kitts & Nevis): Cuthbert Sebastian
Deputy Governor-general assigned to Nevis: Eustace John
Prime Minister, finance, development, planning and national security: Denzil Douglas

Cabinet
Deputy prime minister, international trade, labour, social security, Caricom affairs, and telecommunications and technology: Sam Condor
Tourism, commerce and consumer affairs: Dwyer Astaphan
Health and environment: Earl Asim Martin
Agriculture, fisheries, co-operatives, lands and housing: Cedric Liburd
Information, youth, sports and culture: Jacinth Henry-Martin
Social development, community and gender affairs: Rupert Herbert
Foreign affairs and education: Timothy Harris
Public works, utilities, transport and posts: Halva Hendrickson
Attorney general and minister of justice and legal affairs: Delano Bart

Politics
In the 6 March 2000 general elections, the St. Kitts and Nevis Labor Party led by Denzil Douglas retained power by winning eight of the 11 seats. The Concerned Citizens Movement (leader Vance Amory) won two seats. The Nevis Reformation Party (leader Joseph Parry) won one seat. The People's Action Movement (leader Dr. Kennedy Simmonds) failed to win any seats. The next election must be held by March 2005.

Economic overview
Sugar production, tourism, light manufacturing and the offshore financial sector make up the key components of GDP. Half the labor force is involved in sugar production.

Gross domestic product
US$300.5 million at market prices, a 2.8% real increase. (1999)

Net foreign assets
US$37.3 million (31 March 2000)

Trade
Goods and services exports US$142.9 million. Imports US$219.2 million. Deficit on current account US$81.4 million. Overall balance of payments surplus US$2.7 million. (1999)

Inflation rate (CPI)
3.4% (1999)

Labour force
About 18,000. Unemployment rate: 4.5%

Government accounts
Recurrent revenue US$93.4 million; recurrent expenditure US$97.7 million. Capital deficit US$7 million. Total deficit US$11.3 million (1999). The financial year is the calendar year.

Public holidays (2004)
1 January (New Year's Day), 2 January (Carnival day), 9 April (Good Friday), 12 April (Easter Monday), 3 May (Labour Day), 31 May (Whit Monday), 4 August (Emancipation Day), 3 August (Culturama), 16 September (National Heroes Day), 19 September (Independence Day), 25 December (Christmas), 26 December (Boxing Day).

Time zone
GMT minus 4 hours. There is no summer time clock change.

Sources
Government of St. Kitts and Nevis
Financial Services Department
Caribbean Development Bank
International Monetary Fund
US State Department
Eastern Caribbean Central Bank
Elections Around the World
Holiday Festival