ST. VINCENT & THE GRENADINES
OFFSHORE INCORPORATION SERVICES
COMPANY FORMATION IN
ST. VINCENT & THE GRENADINES
St. Vincent and the Grenadines is an independent English-speaking nation, located in the Eastern Caribbean.
St. Vincent and the Grenadines was a colony of Britain that became independent in 1979. Since then it has maintained many of the traditions of Britain, while developing its own unique Vincentian civilization. Its parliamentary system of democracy mirrors that of Westminster – as does the evolution of the two parties system in St. Vincent. The legal system is that of the common law, with a common Eastern Caribbean Court of Appeal and the final appeal in the Downing Street Privy Council.
While the financial services sector is a prominent part of the investment development strategy of the country, tourism is the prime income earner, and agriculture generally comes in second. In 2003 the revenue from the film industry surpassed that of agriculture, with the filming of Disney’s Pirates of the Caribbean, starring Johnny Depp.
The tourism industry thrives largely on the beauty and prime sailing destination of the Grenadine islands, as well as the hospitable and open populace. Islands like Mustique, the Tobago Cays, Bequia, Union Island, Mayreau and Canouan are musts stops for sailors.
The island of St. Vincent has a rich cultural heritage, with historic peoples of the Ciboney, the Arawaks, Caribs, and Garifuna to name a few.
Most commercial houses open Monday – Friday 8:00a.m. to 4:00p.m.; some do extended hours 4:30 p.m. – 5:00p.m. Others open on Saturdays as well from 8:00/9:00a.m. to 12 noon.
The official language of Saint Vincent and the Grenadines is English, and it is the language for doing business. However, French and Spanish are widely taught on the Island and there are many bi-lingual inhabitants.
The official currency of Saint Vincent and the Grenadines is the EC dollar – Eastern Caribbean currency. It is tied to the USD at EC $2.70 = US $1.00. Banks will change notes at US $2.67 to EC $ 1.00 and cheques at EC $2.68 to US $1.00. The rate for other currencies fluctuates daily, but in addition to the US dollar, the British pound sterling and the Canadian dollar are widely accepted. All major credit cards are accepted at restaurants and Hotels, and American Express, Visa, and MasterCard have representative agents in the State. The monetary matters are regulated by the Eastern Caribbean Central Bank with headquarters in St. Kitts.
DHL and Federal Express maintain fully staffed offices. They are open on weekdays for business.
The main post office is situated in the capital, Kingstown (not to be confused with Kingston which is in Jamaica).
Valid passport must be carried by all persons entering the multi – island State. However, UK, and USA and Canadian citizens who possess valid picture identification and valid return ticket may use them for entry.
The multi – island state is serviced by Leeward Island Air Transport (LIAT); Mustique Airways; Air Martinique, American Eagle, Caribbean Star, and St. Vincent and the Grenadines Air. The main gateways are San Juan, Barbados, Grenada, St. Lucia, Martinique and Trinidad and Tobago. Regularly scheduled, as well as charter flights, are always available.
Saint Vincent and the Grenadines is an independent nation that is well known for its democratic system of Government. Elections are held every five years. The multi – Island State became independent on the 27 October 1979.
It is a full member of the British Commonwealth, the United Nations, the Organization of American States, the International Labour Organization, CARICOM, and the Organization of Eastern Caribbean States.
Christopher Columbus did not visit St. Vincent and the Grenadines as “the Old tale” used to say. It is not widely known that this country was inhabited as far back 7000 years ago by the Ciboney. Around 200 A.D., they were displaced by the Arawaks from South America. One thousand years later the fierce Caribs arrived on these shores.
The English and French tried to settle in this country, but they were driven off by the Caribs. Paramount Carib Chief Chatoyer fell in 1795, and the native population was finally conquered by colonists.
Independence was granted on 27 October 1979, and in this State dwell a harmonious blend of people of Carib, African, Portuguese, Scottish, Irish, and East Indian descendants, with newer immigrants from the Middle East and Asia, France, Italy, England, Canada and the USA.
St. Vincent and the Grenadines is Located at 600 56’ West longitude and 130 15’ North latitude. It is approximately 1600 miles southeast of Miami and 100 miles form Barbados, and is part of the Windward Islands, which are part of the Island chain, called the Lesser Antilles.
ST. VINCENT & THE GRENADINES AS
AN INTERNATIONAL FINANCE CENTRE
Tracing the Development of St. Vincent and the Grenadines as an
International Finance Centre
The financial sector in Saint Vincent and the Grenadines as at September 2005 is made up of the following financial institutions.
The domestic sector comprises:
Six (6) banks
One (1) building society
Three (3) major credit unions
Fifteen (15) motor and general insurance companies (5 local and 10 CARICOM) and 9 long term and life insurance companies (all CARICOM).
The international finance sector comprises:
Six (6) banks
Eleven (11) international insurance companies
Twenty-five (25) mutual funds
Twenty-one (21) mutual fund managers
One hundred and thirty (130) trusts
Seven thousand, eight hundred and eleven (7,811) IBC’s
St. Vincent has a long tradition of banking and finance with Barclays Bank being the first international bank with operations here in 1837 and the first indigenous bank First St. Vincent Bank set up in 1909. Currently there are two indigenous commercial banks, as well as five other commercial domestic banks operating in St. Vincent and the Grenadines.
Swiss lawyers introduced St. Vincent and the Grenadines to the international financial services sector in 1976. Three years later the country gained independence from Britain and embarked on the process of nation building – setting up the foundations of an independent nation state. When the country was more mature it was able to take a second look at the international finance industry in 1996 and take the policy decision to move this sector into the forefront of the national economy. The international finance legislation was overhauled and a package of financial laws was introduced.
FORMS OF ENTITIES
In 1996 there were comprehensive legislative changes to its IBC Act, bringing St. Vincent to the forefront of the world's offshore financial centres as one of the safest and most private jurisdictions. IBC's incorporated in St. Vincent are completely free of all taxes for a period of 25 years. There is no requirement to disclose the beneficial owner of the IBC and bearer shares are allowed. There are no exchange controls. There are no tax information exchange treaties with any country.
The laws provide the basis for the formation of the following entities:
International Business Companies
International Insurance Companies
The international entities registered in St. Vincent and the Grenadines are not subject to taxation. Favourable tax laws are common also in the domestic economy, where there is no capital gains tax, no inheritance tax, no tax on dividends and corporate tax ranges from 10 – 35%. There is freedom to repatriate capital and profits up to USD 100,000. Amounts exceeding that sum require approval before repatriation, which is usually given. Also there are no exchange controls on current transactions under USD 100,000.
Regulated and licensed agents and trustees, known in St. Vincent and the Grenadines as Registered Agents, provide international financial services. The International Financial Services Authority supervises these agents.
St. Vincent and the Grenadines has a small, carefully vetted and properly regulated international private banking sector. At present there are only six banks licensed to conduct international banking business. The regulatory body, the International Financial Services Authority, has concentrated its efforts on ensuring that only banks with a real presence, and sound business operations and policies, operate in St. Vincent and the Grenadines. There are no shell banks licensed in St. Vincent and the Grenadines. All banks have been and will be subject to further on-site examinations by the authorities every 12-18 months.
The ECCB promotes and maintains the monetary stability of the single common currency (the Eastern Caribbean dollar) of the group of eight small island economies, including Anguilla, Antigua and Barbuda, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.
The ECCB is an organ of the Member governments and it has its headquarters in St. Kitts and Nevis. The highest decision making body of the Bank is the Monetary Council comprising ministers of government from the participating states.
The role and function of the ECCB includes:
To issue currency notes and coins in the territories of participating governments
To supervise and regulate (mainly) domestic banks of the member states.
All domestic commercial banks in St. Vincent and the Grenadines are regulated by the ECCB. St. Vincent and the Grenadines, as a result of substantive legislative and administrative review over the past two years, has an anti money-laundering regime that is on a par with the highest of international standards. The FATF have recognized the substantial progress made by St. Vincent and the Grenadines in this regard. The following is a list of the legislation introduced to combat money laundering and terrorist financing:
Proceeds of Crime Money Laundering (Prevention) Act 2001 (Act No. 39 of 2001)
Proceeds of Crime Money Laundering (Prevention) Amendment Act (No. 25 of 2002)
Proceeds of Crime Money Laundering Regulations 2002 (S R & O No. 39 of 2002)
Amendment to the Proceeds of Crime Money Laundering Regulations (S R & O No. 29 of 2002)
Financial Intelligence Unit Act 2001 (No. 38 of 2001)
The Financial Intelligence Unit (Amendment) Act 2001 (No. 24 of 2002)
The International Business Companies (Amendment) Act 1996 (No. 26 of 2002)
The International Business Companies (Amendment) Act 1996 (No 44 of 2002)
International Trust (Amendment) Act (No. 27 of 2002)
Exchange of Information Act 2002 (No. 29 of 2001 - Repealing the ‘Confidentiality’ Act)
Exchange of Information Order S R & O 2002 No. 48
International Banks Act 2004 (No 40 of 2004)
International Banks (Amendment) Regulations 2002 (S R & O No. 31 of 2002)
United Nations Anti Terrorism Measures Act 2002 (No. 34 of 2002)
The Proceeds of Crime and Money Laundering (Prevention) Act (PCMLP) 2001 came into force on December 26, 2001. The PCMLP criminalizes the laundering of the proceeds of serious crime. It creates an obligation to report suspicious transactions to the Financial Intelligence Unit. It imposes a record keeping and recording requirement for a wide range of financial institutions and relevant businesses. The PCMLP (section 48) also provides for the National Anti Money Laundering Committee (NAMLC).
Another significant area of progress that St. Vincent boasts is in the establishment of a National Anti Money Laundering Committee (NAMLC). The NAMLC has been very active in organizing educational seminars both for financial institutions and for the judiciary, the magistracy and crown prosecutors. The NAMLC has hosted most of these seminars in conjunction with the Caribbean Anti Money Laundering Program (CALP). As a result of the work of the NAMLC there is a very high level of awareness, in particular among the financial sector in St. Vincent and the Grenadines, of the obligations of the AML regime and the importance of giving effect to it.
THE REGULATORY AUTHORITY
STRUCTURE AND FUNCTION
The International Financial Services Authority was created by Parliament to institute a new system to manage, direct control and supervise the international financial services industry in this country.
Its role is clearly defined by the governing statute – The Saint Vincent and the Grenadines Offshore Finance Authority Act, 1996. The business of The Authority is under the direction of a board of directors.
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