What You Have to Know about Taxes in the Caribbean Countries

If you are planning to launch a business venture in a foreign country, it is important to find out what taxes you are going to have to pay there. If you have some additional goals in mind such as acquiring second citizenship, for example, learning about the taxation system in the country that you are considering is not less important. Often you have to make certain sacrifices as far as taxes are concerned when moving to a foreign country that is more comfortable for living in comparison to your home country.

However, no compromises are going to be required in some jurisdictions. If you start a business in any country in the Caribbean, you will find that the tax conditions are extremely beneficial there.

Examples of our services: a corporate bank account in Antigua and Barbuda; a personal bank account in Antigua and Barbuda.

Main advantages that Caribbean countries boast:

• An ideal geographical location;
• Fantastic climate conditions;
• No transportation or logistic problems (an advanced network of air and sea ports);
• Openness to trade with all countries;
• Good infrastructure;
• Economic, political and financial stability;
• A high level of personal security;
• Perfect conditions for engaging in domestic and international business;
• Wide investment opportunities;
• Everything for a comfortable and carefree life;
• An advanced system of investment incentives;
• Relatively inexpensive legal residence/ citizenship schemes;
• Favorable tax systems (most Caribbean countries are offshore jurisdictions and tax residents often do not pay any taxes at all);
• Well-thought-out corporate legislation.

Caribbean countries/ territories (some of them charge low or zero taxes):

Country / Territory	Political status (independent/ overseas territory of)
Anguilla	UK
Antigua and Barbuda	Independent
Aruba	Netherlands
Bahamas	Independent
Barbados	Independent
Bonaire	Netherlands
Virgin Islands	United Kingdom
U.S. Virgin Islands	USA
Haiti	Independent
Guadeloupe	France
Grenada	Independent
Dominica	Independent
Dominican Republic	Independent
Cayman Islands	UK
Cuba	Independent
Curaçao	Netherlands
Martinique	France
Montserrat	United Kingdom
New Sparta	Venezuela
Navassa Island	USA
Puerto Rico	USA
Saba	Netherlands
San Andrés and Providence	Department of Colombia
St. Eustatius	Netherlands
St. Barthélemy	France
St. Martin	France
Saint Vincent and the Grenadines	Independent
Saint Kitts and Nevis	Independent
Saint Lucia	Independent
Turks and Caicos	United Kingdom
Trinidad and Tobago	Independent
The Federated States of Venezuela	Federal Dependency of Venezuela
Jamaica	Independent

Please note that some of the Caribbean jurisdictions are not very attractive for relocating there and starting a business. Some others, however, are famous throughout the world for their highly enticing conditions in terms of taxes and living standards.  

An example of our services: IBC registration in Dominica.

Taxes in Caribbean countries

It would be a mistake to think that citizens/ tax residents of Caribbean countries do not have to pay any taxes. Under pressure from the global financial regulators, many Caribbean states are raising taxes or introducing new taxes that they did not charge before. For this reason, choosing the Caribbean jurisdiction to move to requires a lot of preparatory work.

If you take the Cayman Islands of Anguilla, for example, almost no taxes are payable there (with the exception of the stamp duty of 0.01%-5% / 7.5% that you have to pay when transferring property rights). In the Dominican Republic, on the contrary, the tax burden is comparable to that in a large European country.

Who is considered a tax resident in St Lucia (the requirements in other Caribbean countries are analogous):

• Natural person. Permanently lives in St Lucia or spends more than 183 days a year there.
• Deceased natural person (for inheritance purposes). The deceased person has to be a resident of St Lucia before death.
• Trust, an association of people. Has to be created and registered in St Lucia.
• Company, legal entity. Registered in St Lucia and managed from there.

The tax resident status in the Caribbean defines the taxation conditions. The amounts of tax payments can be different depending on whether you are a tax resident or not. What also matters is where you make an income.

Let’s consider Barbados as an example. If a person is a legal resident of Barbados and he/ she permanently lives there (if both of these conditions are satisfied), taxes are payable on the person’s global income. If only the first condition holds, only the locally made income is taxable as well as the income that directly depends on Barbados.  

The situation with the corporate tax is similar. A Caribbean company (registered in Barbados or any other country in the region) that is tax resident in the Caribbean is taxed on all income – domestic and foreign. Non-resident companies pay taxes only on the income derived from business operations on the territory of the respective country.

Taxes in some popular Caribbean jurisdictions:

An example of our services: a gambling license in Curacao.

Forms of company ownership in the Caribbean

Most often, foreigners register IBCs (International Business Companies) in the Caribbean. However, there are other company ownership types that you can choose from (see below). Let us consider the main advantages of setting up an IBC in St Lucia. If you opt for another Caribbean jurisdiction, you are likely to find the same benefits there too.  

Main advantages of registering an IBC in St Lucia (or some other Caribbean country):

• Low corporate taxes;
• No capital gains tax, nor wealth tax, nor inheritance tax, nor property transfer tax;
• No currency control;
• No information about the company director, secretary, shareholders, and other beneficial company owners is available to the public;
• No reporting requirements;
• Simple company registration procedure;
• Nominee services are available.

Main purposes that a Caribbean IBC can be used for:

• Asset protection;
• Asset diversification;
• Service provision;
• Transboundary trade;
• Tax planning;
• Insurance services;
• Holding-related services;
• Financial services.

Examples of our services: a personal bank account in Puerto Rico; a corporate bank account in Puerto Rico.

Requirements to IBCs registered in the Caribbean:

• Company directors and shareholders: not less than 1 person, resident of any country; a natural person or a legal entity; shareholders/ board of directors’ meetings can be held anywhere;
• Company secretary: not required;
• Beneficial company owners: the information is secret.

Shares and registered capital of a Caribbean IBC:

• Minimum 1 share;
• No requirements to registered capital;
• Issue of shares with no par value is allowed;
• Bearer shares are prohibited.

Alternative forms of company ownership available in St Lucia (and elsewhere in the Caribbean):

• Sole proprietorship;
• Partnership;
• Private company;
• Subsidiary/ affiliation;
• International partnership;
• International investment fund;
• International trust.

An example of our services: Register an IBC in St Vincent and Grenadines.

IBC registration in the Caribbean

If you would like to set up a business company in the Caribbean, you should request professional advice. When choosing the consulting company, you should take several factors into consideration in addition to the cost of services. These include the following ones:

• An individual approach to every customer;
• A complex approach to company formation;
• Reasonable timeframes of company registration;
• Risk calculation.

Our standard service package includes the following items:

• Payment of the company registration fee;
• Legal address (+ any other economic substance that you require);
• Registered agent;
• Secretary services (if applicable);
• Corporate document package;
• Making entries in the registers;
• Technical support (at least for 1 year);
• Additional services (visa acquisition, bank account, accounting service, and so on);
• All the company maintenance services can be extended beyond 1 year.

Personal documents required for registering a company in the Caribbean:

• Passport;
• A document to serve as proof of address (has to be notarized);
• Bank statement;
• Police clearance.

Examples of our services: register an IBC in St Lucia; acquire economic citizenship of St Lucia.

A corporate account with a Caribbean bank

The corporate sector is well-developed in the Caribbean region. You can easily set up a company there and do business while paying little in taxes. Not less developed is the banking sector in the Caribbean. There you can find a large number of banks that can successfully cater to the needs of the following groups of people:

• Entrepreneurs;
• Investors;
• Wealthy persons;
• Highly qualified specialists.

Opening a bank account in the Caribbean is relatively easy. You do not even have to be a legal resident in the region to be able to set up a bank account there. Corporate banking services are readily available as well. At the same time, you must realize that Caribbean banks follow all the international AML and counter-terrorism financing regulations. 

Below we discuss the advantages of banking in Curacao as well as the requirements that you have to meet in order to open a bank account in the jurisdiction. We take Curacao as a typical example of a Caribbean country where you can bank. Other countries in the region offer similar benefits and put forward similar requirements to prospective clients. You will need professional advice on choosing the Caribbean bank that fits your purposes best of all.

Advantages of offshore banking in the Caribbean:

• Tax resident status is not obligatory;
• Caribbean banks will work with high-risk businesses;
• Tax optimization opportunities are available;
• Bank accounts can be opened remotely;
• Banks are in good standing;
• No economic substance nor any business activities are required in the country where the bank is stationed;
• Loyal personnel;
• Simple procedures of bank account opening (simple in comparison to similar procedures in Europe or Asia).

Target audience of Curacao banks:

• Tax resident companies;
• Commercial organizations;
• Offshore companies;
• Offshore capital management organizations;
• Companies non-resident in Curacao for tax purposes;
• Companies working in high-risk sectors.

Minimum application document package for opening a corporate bank account in Curacao (additional documents may be required depending on the residence/ tax status of the company):

• Board of Directors’ resolution;
• Document confirming account manager appointment;
• Certificate of Incorporation;
• Company By-laws;
• Agreement with the bank;
• Company registration certificate;
• Detailed description of business activities;
• Personal documents for company director and account manager;
• Professional recommendations;
• Confirmation of legality of sources of income.

Caribbean countries: citizenship by investment

Acquiring tax residence in the Caribbean is enough in many cases. The status allows launching a company in the region and living in comfort there. However, you can also become a full-fledged citizen of a Caribbean country. Five countries in the region offer opportunities to acquire their citizenship by investment. This is the fastest way of obtaining a second passport.

Caribbean passport, Antigua and Barbuda, investment options, minimum investment amount:

• 100,000 USD – donation to the state fund;
• 200,000 USD – investment in real estate;
• 400,000 USD – investment in business;
• 150,000 USD – donation to the university.

Caribbean passport, Dominica, investment options, minimum investment amount:

• 100,000 USD – donation to the state fund;
• 200,000 USD – investment in real estate.

Caribbean passport, Grenada, investment options, minimum investment amount:

• 200,000 USD – donation to the state fund;
• 220,000 USD – investment in real estate (joint investment);
• 350,000 USD – investment in real estate (individual investment).

Caribbean passport, St Kitts and Nevis, investment options, minimum investment amount:

• 150,000 USD – donation to the state fund;
• 200,000 USD – investment in real estate.

Caribbean passport, St Lucia, investment options, minimum investment amount:

• 100,000 USD – donation to the state fund;
• 300,000 USD – investment in real estate.

What advantages can you gain if you acquire Caribbean citizenship? Some people believe that the status can only help you save on taxes and register an offshore company. In reality, however, Caribbean citizenship will bring many more benefits of various kinds. The status of a Caribbean citizen is much more advantageous than the status of a tax resident in the region.

An example of our services: a company in the BVI with a bank account in Hong Kong.

Main advantages that a Caribbean passport can bring:

• Freedom of travel (visa-free access to over 140 countries of the world);
• Simplified USA visa acquisition;
• Legal tax optimization;
• A ‘plan B’ in case of force majeure;
• Elite education opportunities;
• A business company created in the Caribbean by a citizen of the region has a wider range of opportunities;
• Perfect conditions for recreation and comfortable life;
• Membership in the British Commonwealth of Nations;
• A Caribbean passport makes its holder qualified for an E-2 business visa to the USA. Which means that you can register a company in America;
• Good opportunities to let your Caribbean property on a lease thus acquiring a stable passive income.

The Caribbean region is a place ripe with all sorts of possibilities. Many countries there are perfect for living and working. Low taxes, wise corporate legislation, superb climatic conditions, and wonderful natural landscape are the main factors that justify referring to the Caribbean as ‘paradise on earth’.

Example of our services: citizenship of Grenada by investment.

If you are interested in acquiring Caribbean citizenship or launching a company in the region, please request our assistance in these matters by writing to info@offshore-pro.info or contact us in any other way. We always respond quickly!