Business and taxes

Taxes in Grenada

Grenada citizenship helps investors optimize taxes. There are no taxes on inheritance and capital gains in the country. Income tax is payable only if the income is derived from a source in Grenada. In addition, there are two income tax rates: 10 and 28%, depending on the income amount.

Grenadian companies pay corporate tax at 28% and the VAT at the standard rate of 15%.

The annual property tax is up to 0.8% of the market property value.

Learn what other taxes individuals and companies pay in Grenada.

Taxes in Grenada

Who pays taxes in Grenada

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.

More than 183 days a year
A person spends in Grenada to become a tax resident

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.

Taxes for individuals 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.

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.

Taxes for legal entities in Grenada

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.
15%
The standard VAT rate in Grenada

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 of the Grenada citizenship

Property taxes in Grenada

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.

Property tax rates in Grenada

Property typeLand tax rateBuilding tax rate
Residential properties0.2%0.3%
Hotels0.3%0.02%
Commercial properties0.5%0.3%
Industrial properties0.3%0.2%
Agricultural lands0%0%

When assessing the market value of the real estate,  the object's location, the price of land in the area, the type and size of the plot, and the condition of the building are taken into account.

$100,000 is deducted from the property value when calculating the tax. The deduction only applies to one property per property owner.

Taxes on real estate in Grenada

A share in this spa resort costs $220,000. Investors who buy shares to obtain Grenada citizenship by investment do not pay 10% for a land license

Taxes on real estate in Grenada

A share in this spa resort costs $220,000. Investors who buy shares to obtain Grenada citizenship by investment do not pay 10% for a land license

Taxes on real estate in Grenada

A share in this spa resort costs $220,000. Investors who buy shares to obtain Grenada citizenship by investment do not pay 10% for a land license

Taxes on real estate in Grenada

A share in this spa resort costs $220,000. Investors who buy shares to obtain Grenada citizenship by investment do not pay 10% for a land license

Taxes on real estate in Grenada

A share in this spa resort costs $220,000. Investors who buy shares to obtain Grenada citizenship by investment do not pay 10% for a land license

Tax treaties that Grenada has with other countries

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.

Exchanging of tax information between Grenada and other countries

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.

Other benefits of Grenada citizenship

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

Visa-free travel to 144 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.

Investment options and terms of obtaining Grenada citizenship

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.

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%.

Frequently asked questions

Who is to pay taxes in Grenada?

Individuals and companies that receive income in the country, buy real estate, register vehicles. All companies registered in Grenada pay taxes on profits received from any source, including foreign ones.

Does Grenada have an income tax?

Yes, there is an income tax in Grenada. The rate depends on the income amount. The first EC$24,000 is taxed at 10%; the rest of the income is taxed at 28%.

What taxes do individuals pay in Grenada?

Individuals pay the income tax at a rate of 10% on the first EC$24,000 and 28% on income exceeding this amount. Social contributions are levied as 5% of the salary.

If a non-resident of the country earns income from a source in Grenada, the withholding tax is paid at a rate of 15%.

Grenada has no tax on capital gains, global income, and inheritance.

What taxes do legal entities pay in Grenada?

Legal entities pay the corporate tax at a rate of 28%: residents pay from profits from all operations, non-residents — only from profits received in Grenada.

The standard VAT rate is 15%. 20% is charged on the services of mobile operators, 10% on the hotel business and services of diving companies. Some companies may not pay VAT.

Social contributions from employees’ salaries are 4%.

The withholding tax is payable if a non-resident company receives dividends, interest or royalties from a source in Grenada.

What taxes are paid when buying or selling real estate in Grenada?

The buyer pays 10% for the license to own the land.

This does not apply to citizenship by investment program participants as they don’t need to obtain a license.

The seller pays the transfer tax. It is levied at the rate of 15% for foreigners and 5% for citizens of Grenada.

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

How much is property tax in Grenada?

The property tax is up to 0.8% of the market property value. The property owner pays it annually.

When a property is sold, a Grenada citizen pays 5% of the property value, and a foreigner pays 15%. International buyers are also subject to a 10% fee for a license to own land in Grenada.

 

Is there a double taxation agreement between the USA and Grenada?

No, there isn’t. Grenada has Double Taxation Treaties only with the UK and the countries of the Caribbean Community (CARICOM). This means that income earned in Grenada can be taxed in full in Grenada and the USA.

Is Grenada a tax haven country?

Yes, Grenada might be considered a tax haven. There are no taxes on capital gains, inheritance or global income for individuals.

Which Caribbean island is tax-free?

Grenada is tax-free in terms of capital gains, inheritance and global income for individuals. We discover benefits for companies in the article “Business and taxes in Caribbean countries”.

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Taxes in Grenada