Asset protection in Grenada: a Caribbean Tax Haven

Grenada: a Caribbean Haven.
The three island state of Grenada is located in the Caribbean Sea, north of Trinidad and Tobago. The capital, St. George's is among the most beautiful in the Caribbean with its lovely harbour, busy commercial and government hub around the harbour and unique red-tiled roofs.

The population comprises approximately 98,000 persons. The United Stated dollar is accepted everywhere in Grenada and is approximately equivalent to EC$ 2.70, which is the local currency (Eastern Caribbean dollar) English is the official language. The legal system is based on the English common law and the Privy Council is the last appeal court. The communication system is state of the art and the major telecommunications provider is the English company Cable & Wireless. Grenada is easily accessible from Toronto, New York, Miami, Puerto Rico and London. There are also two direct weekly flights from Western Europe.

Offshore Legislation
In early 1997, Grenada was introduced to the offshore world as an up coming serious financial centre. In 1996, introduced a comprehensive package of legislation targeted at international investors. Exercising its advantage as an Inter-comer to modern offshore, Grenada took all what was best from legislation of competing jurisdictions and introduced:

  • The International Companies (Amendment Act).
  • The Offshore Banking Act.
  • The International Insurance Act.
  • The International Trusts Act and.
  • The Company Management Act.
  • The offshore Services (fees) Regulations.

However, Grenada has decided to move cautiously in the registration of Offshore financial entities in an attempt to keep its jurisdiction clean and respectable. To dare, (September 98'), there are 734 International business companies (IBC's), 23 Offshore banks, three trust companies and five bank and trust companies.

The International Betting Act
In August 1998, the International Betting Act was passed to provide for the licensing, regulation and conduct of international betting and for matters connected therewith. An application for a license to conduct international betting must be made to the Registrar of Offshore Services.

The legislation provides for offshore betting within a regulated environment. Application for a license under the Act may require an examination of the financial status and history of the Applicant Company and any of its directors, associates or affiliate and the character and experience of the directors thereof. The objective is to ensure that Grenada is maintained as a clean and transparent jurisdiction.

Permannent Deposit
No license shall be granted to a Company or allowed to be retained by a Company unless it has a principal office in Grenada for the conduct of its business and such business is conducted in a manner consistent with the interest of persons placing bets. A Deposit of at least EC$ 1,000,000.00 must be permanently maintained in a licensed bank in Grenada and such license may be revoked if this deposit is not maintained.

Taxation
Not withstanding anything contained in the international Companies Act, which regulated offshore companies (IBCs); a licensee under this Act shall pay a two percent tax on the gross receipts derived from betting each month to the Comptroller of Inland Revenue.

Examination by the appropriate authority may be done at any time without prior notification.

The effect of the above pieces of legislation has been to bring Grenada to the forefront of Offshore Financial jurisdictions as a preferred choice for persons of suitable background seeking not only an investment alternative, but also a new and better way of life. Grenada offers choices both for the offshore and domestic investor.

Future Legislation
Grenada has had a show start but as one colleague always says "this is not a race for the swift but rather the well regulated and industrious that capitalizes on its strengths. Grenada expects to introduce a comprehensive package of legislation that will enable it to compete favourably with other jurisdiction. New legislation will include that which will provide for the registration of mutual funds of various categories and a ship registry for the registration of vessels flying the flag of Grenada including registration under charter contracts.

Located 1500 miles from Miami and 200 miles form the tiger of the Caribbean, Trinidad and Tobago with easy access also to competing jurisdictions in the Caribbean, Latin America and Europe, Grenada is poised to become the one-stop-shop in offshore finance. One of travel without borders and the reign of Science and technology.

Facts on Grenada
Location: 12º 07' N 61º 40' W approximately 1,500 miles southeast of Miami and 200 miles from the south of the South American Mainland.
Area: 340sq. KM.
Capital: St. George's
Population: 95,000 (July 1995)
Language: English
Currency: Eastern Caribbean Dollar (EC$=100 cents). In 1976, the EC$ was pegged on the US$ at a rate of EC$1 to US$.37 (US$1=EC$ 2.70).
Climate: 22 C (67 F) to 30 C (87 F)
Tropical. Dry season Jan. – May, Rainy season , June – Dec.
Time: Atlantic Standard Time (GMT –4)
Legal System: Based on English Common Law.

General
The three island state of Grenada, Carriacou and Petite Martinique forms the southern-most of the Windward Islands in the Eastern Caribbean. Clear blue sea and sandy beaches rise to mangrove and lowland forest, then rise further to mountain rainforest and dwarf woodland forest on the slopes of Mount St. Catherine. Forming the spine of the island, Mount St. Catherine towers 2,757 feet above the sea. St. George's, the capital, is generally regarded as the most beautiful harbour in the Caribbean because of it's many varieties of flowering shrubs set against tropical green volcanic mountains.

Cariacou, Grenada's sister island is known around the world for its unsurpassed yachting and as a paradise for divers. Low hills encourage walking to view the fine sandy beaches, natural harbours and the magnificent views of the northern Grenadine Islands. Carriacou actively maintains its culture with a number of festivals such as the Big Drum Dance.

Petite Martinique, the third island in the group, is being developed for tourism.

Brief History
Christopher Columbus was the first European to sight Grenada on his third voyage in 1548. The Amerindian Arawaks lived on these islands and latter the Caribs. During the dynastic of the late 17thand early 18th centuries, Grenada changed hands several times between the English and French until it was finally ceded by the British in 1783. In 1877, Grenada became a Crown Colony and in 1967, an associate state within the British Commonwealth. The country gained Independence in 1974. In 1979, an attempt was made to set up a socialist state. At the request of the Governor General in 1983, the USA, Barbados, Jamaica and the Eastern Caribbean States intervened militarily to restore order and democracy.

Government

The Grenadian Government is based on the Westminster model and consists of a Prime minister supported by cabinets of Ministers. There is a 13 member Senate of whom 10 are appointed by the Government and 3 by the leader of the Opposition. The House of Representatives has a speaker and 15 members who each represent a constituency. Her Majesty, the Queen, an advice of the prime minister appoints the Governor General, who is head of state.

Economy
Grenada's economy is primarily agricultural with a focus on the production of spices and tropical plants. Agriculture accounts for 15% of GDP and 80% of exports and employs 24% of the labour force. Bananas, Cocoa, Nutmeg and Mace account for two-thirds of the total crop population. In fact, Grenada is the World's second largest producer and the fourth largest exporter of nutmeg and mace. Grenada is also a major producer of spices such as cloves, gingers, and cinnamon. Small farms grow a variety of citrus fruits, avocados, roots crops, sugarcane, corn and vegetables.

Other industries include food and beverage, textiles, light assembly operations and construction.

Tourism is rapidly overtaking agriculture as the main source of revenue in Grenada. As more and more cruise ships and including Grenada on their itineraries, yachting and the hospitality sector are also gaining major importance because of the increasing emphasis of their development.

Education
Education in Grenada based on the British system of 'O' and 'A' Levels. In addition to an excellent local schools system, there is also a private international elementary school.

Banking
Grenada is a tax haven with strict confidentiality laws and its international banking trust legislation are considered to be among the best in exercise. International Banks include Barclays Bank, Royal Bank (GBC) and Scotia Bank.

Communications
Fibber optic cable and satellite access provides first class world-wide services, including full Internet and E-Mail access.

St. George's University
Founded as a school of medicine in 1976. It now boasts strong multinational 500 member faculty-serving students from 55 countries. A 25 million-dollar renovation/additions are now underway to all-residential, administrative and academic buildings. The school offers a broad range of programs starting with its speciality of medicine and including other areas such as liberal arts, business administration and a graduate program that confers a combined MD/MSc. Degree upon its medical students who pursue research. Since 1977 over 2000 students have been awarded MD degrees and have gone to work in over 900 countries. Additionally over 1100 students have continued their studies by transferring into 84 medical school in the United States. By the year 2000, St. George's University is planning to have a population of approximately 4000 students and faculty members with all buildings being consolidated into one distinctive architectural centre making this University the pride and joy of the Caribbean.

Airports
Grenada has two airports, a 2700 foot airstrip in Carriacou and a 9000 foot International Airport at Point Salines, just 15 minutes from the capital of St. George's. Point Salines international Airport is capable of servicing the largest aircraft and presently has flights from American Airlines, British Airways, Canadian, British Caledonian, BWIA and a multitude of local companies and charters. There is potential for further air transportation by reopening Grenada's former airstrip at Pearls.

Seaport
The country's major port is in St. George's the capital, where the sheltered natural harbour features an 800 foot pier with berth space 2-3 vessels, a container park and a 27,500 square feet to transit shed space , a supporting warehouse and a bond storage facility. New port construction will expand and modernize these facilities.

Yachting
Grenada "Where the sailing is world class". Visitors interested in sailing in the Caribbean can charter a crewed yacht or a bare-boat for a day or longer, on one of the world's leading charter companies has opened a modern, full service marina where their fleet is anchored. The Grenada yacht Club offers sheltered moorings and provides access to shops and food stores. Scenic anchorage can be found throughout the island.