Taxes in Grenada: Ultimale Guide for Residents

Grenada citizenship does not oblige the investor to pay taxes in the country. Such an obligation arises only if they buy property in Grenada, register a yacht or a car, open a company or earn income in the country.

The rates and tax base depend on whether the investor or their company is a tax resident of Grenada.

A tax resident is a person who spends more than 183 days a year in Grenada. A company can become a tax resident of Grenada if it is registered in the country or its head office is located there.

A non-resident is a person who does not live in Grenada, or a foreign company. Higher tax rates apply to non-residents. But they only apply if the investor or company receives income from sources in Grenada.

Grenada has no taxes on capital gains, inheritance or global income. The main tax for individuals is the income tax. The withholding tax is also levied on dividends and some other payments to non-residents.

The currency in Grenada is the Eastern Caribbean dollar (EC$). Its exchange rate is pegged to the US dollar. One Eastern Caribbean dollar is equal to 37 US cents.

The income tax is levied only on income received in Grenada, e.g. salaries and business income. Residents of the country also pay income tax on interest, royalties, rents and other income, which for non-residents are taxed in the source country.

How to optimize taxes with a second citizenship

The same tax rates apply to residents and non-residents:

• 10% on the first EC$24,000;

• 28% on the amount above EC$24,000.

Social contributions are 5% of the salary for both residents and non-residents.

The withholding tax is levied when income, such as dividends, is paid by a resident of Grenada to a non-resident. The tax rate is 15%.

No withholding tax is levied on interest, dividends and royalties paid to Grenada tax residents.

LLC and IBC are the most common forms of companies in Grenada. LLC stands for a limited liability company, while IBC is an international company that can only provide services to foreign partners.

Companies in Grenada pay tax on net income, VAT, social security contributions from salaries and a withholding tax.

The corporate tax is levied at a rate of 28%. The tax base is the resident company’s profit from all transactions. Non-residents pay the tax only on profit from sources in Grenada.

The Value Added Tax (VAT) is levied at the standard rate of 15%. But there are some exemptions:

• 20% — for mobile operators;

• 10% — for hotels and diving companies;

• 0% — for companies engaged in some certain activities, e.g. supplying staple food or water.

VAT is paid by companies with an annual taxable income of at least EC$300,000.

Social contributions are 4% of an employee’s salary.

The withholding tax is paid at the rate of 15% on dividends, interest and royalties to a non-resident company.

Individual cost calculation for Grenada citizenship

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The transfer tax is paid when real estate is sold. If a country’s citizen sells the object, they pay 5%. If a foreigner sells property in Grenada, they pay 15%.

Citizens of the country do not pay additional taxes when buying property in Grenada. If a foreigner buys a property, he pays 10% of the object’s value for a license to own land. This does not apply to investors who purchase real estate under the Grenada citizenship program, as they do not need to pay for a license.

Companies pay the transfer tax at a rate of 5 to 15% and 10% for a land license when purchasing a property. They are also subject to stamp duty at a rate of 1%.

The annual property tax is up to 0,8% of the property’s market value. It is divided into a land tax and a building tax.

Grenada has Double Taxation Treaties (DTTs) with the UK and the countries of the Caribbean Community (CARICOM). If a tax resident of Grenada earns income in one of these countries, taxes will not have to be paid in both countries in full.

Grenada doesn’t have DTTs with most countries. This means that income earned in Grenada can be taxed in full in two countries at once, e.g. in Grenada and in the country of investor’s tax residence.

Grenada shares tax information with other countries under CRS and FATCA.

CRS is a standard for the international exchange of account information between tax authorities. It was developed by the Organization for Economic Cooperation and Development. More than a hundred countries use CRS to prevent tax evasion and money laundering. Among them are the UK, Australia, Canada, and EU countries.

Under CRS, Grenada shares the following information:

• a taxpayer’s name, TIN, date and place of birth;

• an account number;

• account balance;

• data on capital gains;

• a name and identification number of the financial institution.

FATCA stands for the Foreign Account Tax Compliance Act, passed in the United States in 2010. Its purpose is to prevent American citizens and residents from avoiding paying taxes.

Under FATCA, Grenada submits information on accounts and other assets excessing $50,000 to the US Internal Revenue Service. Data is shared only about assets of:

• US citizens;

• US residents — holders of the Green Card;

• US tax residents;

• US companies;

• organizations with owners in the USA.

Investors get a Grenada passport to travel the world without visas, obtain a US business visa, and secure a “safe haven” overseas.

Interesting facts about Grenada

Visa-free travel to 146 countries, including the Schengen area, the UK, Singapore and Hong Kong. The passport of Grenada also allows one to visit China without a visa and spend up to 30 days there.

A US tourist visa for 10 years is available to citizens of Grenada. Its holders can spend up to 180 days in the country to travel, be treated, study, and hold business meetings.

The US E‑2 business visa is only available to citizens of countries with a Trade and Navigation Agreement with the USA. The list includes citizens of Grenada: they can get visas for five years.

Entrepreneurs who invest in a business in the United States can qualify for a business visa. The amount of investment is not fixed by the law, but usually, it ranges from $ 200,000. The E‑2 visa allows one to live, do business and work in the USA.

Registering a company in Grenada helps to protect the business owner as data about them is not entered into the commercial register. If a company is registered in Grenada, it simplifies cooperation with foreign counterparties and optimizes taxes.

The Grenada citizenship program offers two investment options: a contribution to a state fund and a real estate purchase. Investor’s family members can also participate: spouses, children under 30 years old, parents, and adult siblings can be included in the application.

A non-refundable contribution to the National Transformation Fund amounts to $150,000 per single investor and $200,000 per family of up to four people. If the application includes more family members, an additional fee is paid:

• $25,000 per parent over 55 years old or per child;

• $50,000 per parent under 55;

• $75,000 per sibling of the investor or their spouse.

How to get Grenada citizenship

Investments in real estate. Applicants can invest only in real estate projects which are approved by the Government of Grenada. The approved projects typically are big hotel complexes.

The investor can buy a share in a hotel, an apartment or a villa. The minimum investment amount is $220,000. Besides, the investor pays an administrative fee of $50,000.

The period of mandatory ownership of real estate is 5 years.

The term for obtaining a passport is from 4 to 6 months. The whole process is remote: the investor doesn’t need to visit Grenada before or after receiving a passport.

Due Diligence is the main stage of the program. Depending on its results, the application is approved or rejected.

To prepare for Due Diligence, investors undergo a preliminary check conducted by a licensed agent. Immigrant Invest has its own Compliance Department. Our clients’ documents are checked by certified Anti Money Laundering Officers who know the nuances of Due Diligence procedures in different countries.

If there is any risk of rejection, we offer a solution to the problem, e.g. additional documents or another program. Preliminary Due Diligence reduces the risk of being denied citizenship to 1%.