Saint Lucia citizenship by investment program was launched on January 1, 2016. During 2016, 38 applications were approved by the government and 65 passports were issued to foreign investors and their family members. Why Saint Lucia? Because here you can apply for citizenship for the whole family within 3-5 months, being confident in the complete discretion of the process. Saint Lucia has signed visa-free travel agreements with 120+ countries and offers favorable tax conditions. The tax system of Saint Lucia will be in the focus of our today’s article.
Residents of Saint Lucia pay a tax on global income and profits derived from domestic activities. Individuals who are not residents of Saint Lucia pay taxes only on income received from local sources.
There is a progressive PIT scale:
The minimum non-taxable PIT for individuals is 18,000 XCD.
Income derived from work and business, interest payments, royalties, and proceeds from the lease of property are subject to taxation. There is no inheritance, capital, dividends, wealth tax.
The current law on international companies provides for a preferential tax treatment. Companies registered in Saint Lucia pay only corporate income tax at a minimum rate of 1% (in some cases, a zero rate applies) or an annual license fee, the amount of which depends on the size of the company’s charter capital. If the company pays the license fee, it is not obliged to submit annual reports to the relevant state authorities and conduct an audit.
On June 6, 2017, Prime Minister Allen Chastanet stated that the Government of Saint Lucia plans to implement a program for simplified tax residency application. Individuals who obtain a residence by investment will be taxed at very low rates. This scheme will give the right to apply for citizenship in five years.
Taxes are imposed on the transactions related to sale of goods and rendering services in the territory of the state and importation of goods to Saint Lucia. The accepted VAT rate is 15%. For a hotel business, a reduced rate of 8% applies.
Registration for VAT payment is required if the total annual cost of supplies exceeds the threshold of 180,000 XCD. There is also an option of voluntary registration with tax authorities. The payments must be made, and the reporting documentation must be prepared by the 21st day of the month following the reporting month.
Wage earners shall pay a 5% tax on their salary to the social security fund, but this amount should not exceed 5,000 XCD.
Property tax is 0.25% of the market value of housing. Buyers of real estate who are non-residents of Saint Lucia should additionally obtain a license for land ownership, paying 7.5% of the property value. The seller, who is a resident of the jurisdiction, pays a tax in the amount of 2.5-5% of the actual value of the object offered for sale. A seller who is not a resident pays 10%.
An annual declaration must be filed with the state authorities by March 31, otherwise, a fine of 5% of the tax will be imposed. By the time of filing the documents all arrears must be paid, otherwise, a 10% fine will be imposed. There is also a late payment interest fee payable on the arrears.
According to the terms of the passport program, foreign investors are offered four options for investing:
An investor is eligible for the program if he:
Along with the main applicant, his spouse, children under the age of 26 and parents above 65 years of age may be included in the application. The status is issued for life and may be inherited. The duration of application process is 3-5 months.
St. Lucia is most often referred to as the “tax paradise.” Due to the loyal taxation system many businessmen choose Saint Lucia as a place for establishment of foreign controlled companies. It is worth mentioning that since 2016 the country runs citizenship by investment program. Obtaining citizenship gives an opportunity to travel freely around the world and have a “quiet harbor” outside of the home country.