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Incentives

FISCAL INCENTIVES, ST. VINCENT AND THE GRENADINES
Fiscal incentives are granted in accordance with the Fiscal Incentive Act No.5 of 1982. The purpose of the incentives is to encourage potential local and foreign investors to invest in St. Vincent and the Grenadines, particularly for export. 

St. Vincent & the Grenadines provides investment incentives in the following areas:
Light Manufacturing
Agro-processing
Information and communication Technology
Tourism and other services
Incentives include the following:
Import Duty Exemption
Enterprises, which benefit from a tax exemption, are allowed to import duty free raw materials, machinery, equipment and spare parts.
Repatriation of Profits
Foreign enterprises are generally authorized to repatriate all of their earnings, as well as imported capital and gains from the sale of plant and equipment or business liquidation. (SVG CIC, 2004)
Double Taxation Relief
There are many tax treaties signed with other countries to avoid a double taxation of income earned in St. Vincent and the Grenadines. Those are Canada, United States, UK, Denmark, Norway, Sweden, Switzerland and several Caribbean states.

Protection of Foreign Investments
All foreign investors in St. Vincent and the Grenadines have the same rights and privileges stipulated in the Constitution of St. Vincent and the Grenadines as a Vincentian. Therefore, the right to own private property is guaranteed.
Consumption Tax Exemptions
Small manufacturers with annual sales up to $2,500,000 are exempted from the payment of consumption tax. However, consumption tax becomes payable on products where sales exceeds the $2,500,000 threshold. www.gov.vc
 

Tax Holidays

  Tax holidays vary between 10 years and 15 years. The nominal corporation tax rate in St. Vincent and the Grenadines is 40%.
  The length of the tax holiday depends on:
The amount of the value added to a product in SVG
The level of employment, inter-industry and sectoral linkages
The opportunity to earn foreign exchange, and the level of investment.

Five groups of enterprises specified by the Fiscal Incentive Act are eligible for tax holidays:

Group 1 Enterprise
  The local value added on commercialized products is at least of 50 % of the sale price.
Group 2 Enterprise
  The local value added on commercialized products must be between 25 % and 49 % of the sale price.
Group 3 Enterprise
  The local value added on commercialized products must be between 10 % and 24 % of the sale price.
Group 4 Enterprise
  This group is also named Enclave Enterprise. The production of this enterprise is exclusively for export to countries outside the Caribbean Common Market (CARICOM). There is no reference to the amount of the local value added because they make a large employment contribution.
Group 5 Enterprise
  This group is also named Capital Intensive Industry. This is an industry which invests a capital with a minimum of $US 9.25 million.

Tax Exempt Regime
 

Enterprise  Value added Tax exemption
Group 1 50 % or more 15 years
Group 2 25 - 49 % 12 years
Group 3 10 - 24 % 10 years
Group 4 NA 15 years
Group 5 NA 15 years

Enterprises which qualify for Fiscal Incentives, may be granted complete or partial

Industrial Investment Incentives
In accordance with the Fiscal Incentives Act, five (5) types of manufacturing and processing enterprises can qualify for a tax holiday.
The length of the tax holiday for the first three (3) types depends on, among other things, the amount of local value added to the finished product(s).
The Industrial Incentive Credit program as it is called targets three particular industries in its initial stage:-

Furniture
Ice Cream
Agro-processed products

To qualify, applications must be made to the Ministry of Trade accompanied by audited financial statements for the past two years.
Import Tax
Import tax concessions on raw materials, machinery, equipment and spare parts www.gov.vc

Ministry of Tourism and Culture
Hotel Incentives
Incentives in the lodging industry, including hotels, guesthouses, and apartments are currently being offered.
These incentives consist of:

A waiver of corporate taxes and import duties on building materials and articles of hotel equipment in order either to renovate, refurbish or to expand existing hotels or construction of new ones.
A casino can be built if there are more than 100 rooms in the hotel.
   
For expansion  Tax exemption
5 to 9 additional guest rooms and/or apartments 9 years
10 to 35 additional guest rooms and/or apartments 10 years
36 + additional guest rooms and/or apartments 12 years
   
For construction Tax exemption
10 to 20 guest rooms and/or apartments 10 years
21 to 34 guest rooms and/or apartments 12 years
35 + guest rooms and/or apartments 15 years

Source: Chamber of Commerce, St. Vincent and the Grenadines, 2004.
These tax waivers begin from the date of the opening of the hotel. In addition, it is possible to import duty-free advertising and promotional material. (SVG CIC, 2004)

Applications for incentives are submitted through INVEST SVG to the Industry Division of the Ministry of Telecommunications, Science, Technology and Industry which then makes recommendations to the Cabinet.

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