Structuring using St Vincent entities
Among the up and coming offshore jurisdictions is St. Vincent and the Grenadines (SVG). At this point in time, the SVG IBC is not required to make public filings or disclosures of its directors, shareholders/members or beneficial owners. The SVG IBC is useful for asset protection, tax planning, or succession planning. SVG also offers international trusts, hybrid companies (limited by guarantee but also having a share capital), and mutual companies (limited solely by guarantee without a share capital).
In the international tax space, it is not unusual to hear buzzwords such as transparency and information exchange. Buzz words aside, the days of “hidden” or “secret” accounts are now over. Having said that, tax planning is still, and always will be, a useful exercise.
Below is an extract from SVG legislation -
EXEMPTIONS FROM TAXES AND DUTIES – International Business Companies Act 2007
(1) Notwithstanding any provisions of the Income Tax Act an international business company which complies with the provisions of section 7(1) shall not be subject to any corporate tax, income tax, withholding tax, capital gains tax or other like taxes based upon or measured by assets or income originating outside the State or in connection with matters of company administration which may occur in the State.
(2) Notwithstanding subsection (1) an international business company which complies with the provisions of section 7(1) may irrevocably elect in its articles filed with the Registrar upon its incorporation or continuation, to be liable to income tax at a rate of 1% on its annual gains and profits.
(3) An international business company which exercises the election under subsection (2) shall also be subject to sections 149 and 154 of the Companies Act and to the Income Tax Act.
For those considering structures involving other Caribbean jurisdictions, it is noteworthy that there are DTAs in place –
AGREEMENT AMONG THE GOVERNMENTS OF THE MEMBER STATES OF THE CARIBBEAN COMMUNITY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME, PROFITS OR GAINS AND CAPITAL GAINS AND FOR THE ENCOURAGEMENT OF REGIONAL TRADE AND INVESTMENT (1994)
The Governments of the Member States of the Caribbean Community desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, profits or gains and capital gains and for the encouragement of Regional Trade and Investment:
The intra-regional Double Taxation Agreement protects self-employed CARICOM Nationals from paying taxes twice on the same earnings. This Agreement is currently enacted in Antigua and Barbuda, Barbados, Belize, Dominica, Guyana, Jamaica, Saint Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.