Taxation regimes in Grenada have developed into an attractive opportunity for high net worth individuals and their companies over the last decade. Both individuals and corporations are subject to rates which are considerably lower as compared to other countries. This has led to an influx of investors in their Citizenship by Investment Program, who seek financial freedom, coupled with a strong passport.
To be eligible for Grenadian Citizenship, applicants must either make a donation (in USD) of $150,000 to the government’s National Transformation Fund or invest a minimum amount of $220,000 in a government-approved real estate investment. Once the investment or donation is made, a passport is issued to the applicant(s) within three to six months.
The donation amount of $150,000 benefits only one applicant. However, any investment in a government-approved real estate property can avail passports for their spouse, dependent children up to 30, dependent parents & grandparents above 65, and even dependent siblings who are above 18 years of age. In the case of a real estate investment, the investment in a property must be held for a minimum period of five years from the date of purchase of the property.
Investing in property to become a citizen is a great way to recoup the majority of the initial investment, and it is a great option for larger families as the initial property investment remains the same.
CITIZENSHIP-BY-INVESTMENTS PRESENTATION
Before delving into the tax rates, it is important to be aware of the distinction between a Tax Resident and a Non-Tax Resident. Anyone who resides in Grenada for more than 183 days per year and earns local income is subject to income tax in Grenada.
In comparison to most other nations, this Eastern Caribbean Country has a personal tax structure that aims to benefit every citizen, regardless of their residency status. Personal income earned in Grenada up to XCD 24,000 has a tax rate of 10%. Any value in excess of this is taxed at 30%.
Non-residents, however, are charged a flat tax rate of 15% on income that is generated in Grenada.
Lastly, there is no tax on personal foreign income or capital gains.
Just like individuals, companies in the country must also establish whether tax residency needs to be applied. Corporate taxation comes into effect if a company is incorporated, or has a significant amount of business or financial transactions conducted in Grenada. Grenadian establishments are subject to a flat tax rate of 30% on the net profit before tax. Unlike the personal income tax system, the Grenadian government considers any product or service that is exported from the island as local income. Therefore, companies with global income are subject to the same tax rate of 30%.
However, corporations that are established under the International Companies Act are completely exempt from corporate tax for business that is conducted outside the Island’s jurisdiction.
Value Added Tax (VAT) on the island, works similarly to how it does in most parts of the world. The Caribbean nation levies this tax on goods and services, which is paid by consumers.
The standard VAT rate in Grenada is 15% on most goods and services.
For the tourism industry, VAT is charged at 10%. There are also some goods and services which are subject to 0% VAT.
Property tax is subject to the market value and the land use classification. According to the Inland Revenue Division, property or real estate is evaluated on factors such as type of land, location, prices in the area, development potential, size of the land, and condition of the building (where applicable). In the case of agricultural land, there is no tax. Property tax ranges from 0% to 0.5%, depending upon the real property owned, type of land, and valuation.
Taxes, which are worth noting:
The Inland Revenue Division is the administration in charge of all tax-related matters in the country. They also develop legal policies and are in charge of overseeing all the tax laws.
The system of filing and paying taxes is streamlined and straightforward on their website. While it is possible for individuals to file their own returns, there is a standard practice amongst most individuals who chose to hire a qualified accountant or accounting firm to act on a client’s behalf to manage the technical nuances of tax reporting in the country.
A Grenadian passport has several benefits, such as visa-free or visa-on-arrival access to over 140 countries, dual citizenship, and eligibility for the US E-2 investor visa. Grenada’s citizens gain access to its taxation-friendly policies and therefore it is no surprise that several wealthy individuals chose to look at Grenada citizenship for both, migration as well as taxation benefits over any other member country of the Caribbean Islands.
Grenada citizenship by investment is an easy process, which attracts investors looking to obtain a second passport. The first step is to choose an authorized marketing agent who will begin the application process and complete all necessary forms. Once this is submitted, the government will screen the application and conduct background checks. The background check entails scrutinizing the source of funds and ensuring that the client has no criminal record or any ongoing legal suits. This decision can take up to 6 months, and, if approved, the applicant may make the investment or donation and receive their passport thereafter. Once issued, the applicant gains visa-free access to over 143 countries and can choose to live and work in the country as a resident or non-resident.
With no inheritance, wealth, or capital gains tax, Grenada can be considered as a ‘Tax Haven’. The low taxation Grenada levies as per international standards make it even more appealing to high net worth individuals. Furthermore, international companies are free from tax on any foreign income.
Income is taxed only on local earnings. Personal income earned locally up to XCD 24,000 is taxed at 10%. Any value exceeding this is taxed at 30%. However, a non-tax resident is charged a flat tax rate of 15% on income that is generated in Grenada. Overseas income is tax-free.
Yes, there is a property tax and it ranges between 0-0.5% depending on the property type and the use of the property.
Land property tax in Grenada must be paid to the Inland Revenue Division. This can be done in person at their office in the Island’s Capital city of St George’s, or on their website at eservices.gov.gd. Payment methods accepted for land property taxes are cash, cheque, credit card, or wire transfers. This same system applies to property tax, as well as a transfer tax.
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