As one of the most prominent islands within the Caribbean, Saint Lucia offers the ideal location for both onshore and offshore business. Through its cultural treasures, its warm and charming reputation a well as its natural beauty, various foreign investors have expressed interest in the island through economic contribution. Investing in Saint Lucia comes with numerous incentives, including fiscal ones, which have been introduced with the aim of promoting the island as the ideal jurisdiction for setting up businesses, or purchasing property.
Companies Investing in Saint Lucia
The law in St Lucia distinguishes between local companies and companies which will conduct international business in Saint Lucia. Local companies investing in the jurisdiction may subsequently be identified as Private Limited Companies or Public Limited Companies.
Private Limited Companies in Saint Lucia
Investing in Saint Lucia through private limited companies entails the formatting and ownership of a company by individuals other than the general public, and therefore cannot the public cannot buy shares or debentures within the company. Such a company must consist of a minimum of 2 directors or shareholders. Private companies may furthermore fall under the following categories:
- Private Company Limited by Shares;
This type of company is formed for the purpose of carrying on business to derive a profit. It must not have more than 50 shareholders, and can enter into any type of legal activity, provided it is not restricted by the Articles of Association of that company. If the company winds up and the assets are insufficient to cover the liabilities, the shareholders will be liable to the amount unpaid in relation to their shares.
- Private Company Limited by Guarantee;
This company does not have a share capital and is not incorporated to make a profit. Rather, it is formed to help the community benefit from a particular project. Most of the time, foundations and trusts are formed under this type of private company. At the time of formation, the members must sign a declaration of guarantee, which will specify the amount to be contributed if the company winds up. If the company winds up and the assets are insufficient, the members will be liable to cover the amount guaranteed.
- Unlimited Company
This private company has a share capital. Its members are liable in an unlimited manner for any debts arising from the company, therefore, all that is incurred by the company is considered incurred by its members.
Public Limited Companies in Saint Lucia
Investing in Saint Lucia through public limited companies on the other hand, involves inviting the public to buy the company’s shares by listing them within the Stock Exchange. The company’s activity is only restricted by what is upheld within the Article of Association regulating the company.
If it is the case that the company winds up, and its assets are insufficient to cover such liabilities, the shareholders will be liable to the amount left unpaid in relation to their shares. The name of the company must always end in the term ‘Public Limited Company’, or its abbreviation ‘PLC’.
International Business Companies in Saint Lucia
The aforementioned are all types of local companies incorporated in St Lucia, however, individuals may be interested in investing in Saint Lucia through an offshore company. This company will conduct international business outside of Saint Lucia, and will, therefore, be regulated by the International Business Companies Act of St Lucia.
There is no limitation for the maximum number of directors allowed to form this type of company, however, normally the standard allows a minimum of 1 director and a maximum of 7 directors. The type of directors involved, their appointment, and the shares they each hold are to be specified within the Articles of Association regulating the company. The law in Saint Lucia allows for the identity of the shareholders, directors and officers within an IBC to be kept strictly confidential. Only the identity of the registered office and the registered agent are required.
It is important that the IBC does not carry out business with persons who are resident in Saint Lucia. This includes persons who have an interest in real estate in Saint Lucia; or carry out activities relating to banking, trusts, insurance or re-insurance in St Lucia, without a specific licence to do so. Interestingly, Saint Lucia International Business Companies (IBCs) may be exempt from taxation and withholding tax in St Lucia, however they will be taxed on any local transactions.
Offshore companies have gained significant popularity in Saint Lucia as a result of the structural adaptability, asset protection, privacy and tax exemption being offered to such companies. When investing in Saint Lucia through such companies, there are no specific minimum or maximum capital requirements imposed, and the incorporation fee is not proportionate to the capital. This flexibility has proven to be quite advantageous with clients, preserving Saint Lucia’s growth within the foreign direct investment industry.
Required Permits or Licences for Investing in Saint Lucia
Foreign individuals who are investing in Saint Lucia by setting up a business and own more than 49% of the company’s shares, must have a trade licence issued by the Ministry of Commerce, Industry and Consumer Affairs. Once all the documentation has been successfully submitted, the application process typically takes 6-8 weeks. The licence will be issued on an annual basis and expires on the 31st of December of every year. Once the licence has been granted, the applicant may be subject to certain fiscal incentives.
Non-nationals may also be required to hold a work permit, which is issued by the Labour Department of the Minister of Legal Affairs, Home Affairs and Labour. This permit is also issued annually, even if the individual has resident status. The application should be filed at least two months before employment in Saint Lucia begins. Until the permit has been issued, the applicant should not engage in any employment.
Taxation for Businesses Investing in Saint Lucia
Companies resident in Saint Lucia are taxed on their worldwide income, whilst non-resident companies are taxed only on the income they derive or source from St Lucia. Both will be subject to Corporate Tax, which, currently, is set at the rate of 30%.
Companies investing in Saint Lucia will also be subject to other forms of tax within the State, including Value Added Tax. VAT is charged on the sale of goods and services from St Lucia or the importation of goods into St Lucia. The standard rate is 12.5%, however particular goods or services may be subject to reduced VAT rates, zero-rates or complete VAT exemption. This depends on the service or goods which are being offered or imported.
Corporations are also responsible for paying social security contributions on behalf of the employee, where the rate is 5% of the employee’s earning, however this must be capped at XCD (East Caribbean Dollars) 5000 per month.
Tax Incentives for Companies Investing in St Lucia
The Caribbean Island has introduced various tax credits and incentives for local companies and International Business Companies who are interested in investing in St Lucia. The following are merely a few of those currently being offered in relation to the setting up of businesses investing in St Lucia:
- Manufacturing companies, who intend on improving the manufacturing base of Saint Lucia, its level of exports, and use of local materials and labour are given special attention. These companies will be able to benefit from a tax holiday of maximum 15 years if approved. The length of the tax holiday is determined on the basis of the amount of local value added.
- As a way of promoting investment within Saint Lucia, various investment incentives have been introduced. The applicable incentives will take into consideration the business’ impact on local employment, exports and the foreign exchange earnings generated.
- IBCs can specify whether they would like to be exempt from income tax completely, or be liable to income tax on their profits or gains at a rate of 1%. This type of company will be not be liable for stamp duty on the transfer of any property, assets, shares, debt obligation and other securities. It will also benefit from no withholding taxes on the remittance of dividends, distributions, royalties, interest, management fees, fees, and other income paid to persons outside of St Lucia. The supplies which are provided by IBCs will be subject to a rate of 0% VAT.
Real Estate investment in Saint Lucia
Saint Lucia is the perfect location for individual who would like to live within a laid-back tropical paradise. Being able to enjoy views of calm beaches, rainforests and mountains, the island is much less densely developed and less expensive in comparison with the other Caribbean Islands. Development and investment within the real-estate industry is highly encouraged through various tax incentives and exemptions.
Once the individual has decided which property to purchase, the process of transferring ownership of the property will begin, which is relatively simple and quick. Saint Lucia allows property to be purchased by natural persons, or legal persons, including local companies or international companies. A contract will be drawn up between the vendor and the buyer stating the conditions of purchase and the price negotiated. The buyer is then expected to put down a deposit of 10% of the purchase price upon signing the contract.
Non-nationals purchasing property may be required to acquire an Alien Landholding Licence from the Ministry of Planning, Development, Environment and Housing. The licence is permanent and property-specific. Once the licence has been granted, the transfer may take place. The remaining balance must be settled and paid, including any government duties.
The Saint Lucia Citizenship by Investment Programme
As a politically and economically stable country, Saint Lucia has been experiencing significant success in attracting foreign investment through its Citizenship by Investment Programme. As one of the latest Caribbean countries to introduce a CBI Programme, investors have the opportunity of becoming citizens of Saint Lucia through various investment or contribution options.
The main applicant must satisfy the following characteristics to be eligible for the programme:
- Must be at least 18 years of age;
- Has committed himself to a particular contribution or investment, providing the necessary evidence as may be required;
- Meets the application requirements;
- Has disclosed all pertinent matters within the application;
- Has a clean police conduct;
- Has an excellent health record;
- Satisfies the fit and proper test, ensuring the applicant is of good standing;
- Has provided evidence of his high personal net worth and
- Has satisfied the nationality requirements, which specifically upholds that individuals from Iran, Afghanistan, Yemen and Nigeria cannot apply.
Dependents of the main applicant are also eligible to benefit from this programme, where the following persons are recognised: dependent children under the age of 25; dependent parents above the age of 65 currently residing with the applicant; and mentally/physically challenged children or parents.
There are four main investment/contribution options available for investors:
- A contribution of US$ 100,000 to St Lucia’s National Economic Fund, which will be directed towards national projects aimed at strengthening of the economy of the country. The contribution will increase if other dependents are also included with the application of the main applicant.
- An investment of US$300,000 in real estate, in which the property must be kept for a minimum of 5 years;
- An investment of US$500,000 in government bonds, which must be kept for a minimum of 5 years, or an investment of US$3.5 million within an approved enterprise project;
- A joint-investment option, where 6 individuals may contribute US$1 million each through a joint-investment.
The programme has proven to be quite beneficial to investors- besides offering a wide variety of investment options, the Saint Lucia Citizenship by Investment programme does not require applicants to physically reside or travel to the state during the application process. With a processing time of merely 3 months, applicants are not expected to have any educational or managerial experience, nor are they required to attend an interview. Once they have become citizens of Saint Lucia, such individuals will not be taxed on their worldwide income.
Acquiring Saint Lucia citizenship has proven to be truly beneficial to applicants and their families, who are able to benefit from visa-free travel to over 142 countries all over the world. As a member of the Commonwealth of Nations, the Caribbean Community, the Organisation of Eastern Caribbean States and the International Organisation of La Francophonie, the state holds excellent relations with various countries around the globe. The political stability, numerous fiscal incentives, and welcoming atmosphere have rendered Saint Lucia the ideal location for investors from